3 Accounting Flows
Current accounting flows are a mix of manual and automated actions. Old Abe is not directly connected to any financial systems, so its primary role is to run the accounting logic, keep track of any project investors, and tell the maintainer how much to pay project contributors. It is up to the maintainer to record incoming payments (abe/payments/) and outgoing payouts (abe/payouts/).
Recording a Payment - triggers a GitHub Action that runs the accounting logic (details below) and produces a report of all Outstanding Balances as a GitHub Issue. The maintainer can refer to the Issue to find out how much to pay.
Recording a Payout - triggers a GitHub Action that simply updates the Outstanding Balances issue to reflect the updated amounts owed.
3.1 Payment
When someone makes a payment to a project, Old Abe allocates portions of that payment to project contributors and creates a report that tells maintainers how much money the project owes to each individual contributor. We’ll get deep into the weeds of how it does that in a moment. If the incoming payment represents an investment (that is, it brings the payer’s total amount paid above the project price), the payer is considered a project contributor. The system adds them to the attributions file with a share equal to their investment (or increases their pre-existing attributive share). The project valuation is increased by the investment amount and all existing attributive shares are diluted so that percentage shares still add up 100%.
Now, let’s talk about how Old Abe allocates an incoming payment.
First, we pay off any processing fees (found in instruments.txt). These fees have fixed percentages that apply to every incoming payment and do not get diluted by investments. They are somewhat analogous to credit card fees. They go towards the Old Abe system itself and to those who have contributed to the DIA process for this project.
Next, we divide the remainder among the contributors in the attributions file. Ideally, this is as simple as dividing the amount according to each contributor’s attributive share. However, sometimes certain contributors are temporarily unpayable (e.g. they might not have provided their payment information yet, etc.). In that case, we record the amount owed to that contributor as a "debt" so that the project can pay them later. To avoid having money sitting around in maintainers’ accounts, we divide any amount left over among payable contributors, according to attributive share. Any amount we pay someone in excess of what we owed them originally, we record as an "advance." The idea here is that when someone eventually becomes payable, we can prioritize paying off the debt we owe them by allocating money to them first whenever a new payment comes in. Anyone who has been accumulating advances will receive a little less than their attributive share until their total advance amount has been "drawn down" and the scales have been balanced between debts and advances.