From warner at lothar.com Thu Dec 4 20:09:34 2025 From: warner at lothar.com (Brian Warner) Date: Thu, 4 Dec 2025 12:09:34 -0800 Subject: BTC update: Tahoe-LAFS DAF Message-ID: Hey folks, I wanted to give a quick update on the Tahoe-LAFS "foundation" and some upcoming activity. As you know, we received a modest donation of BTC back in the early days, and since then we've been slowly using it to fund development of Tahoe and Tahoe-adjacent projects. Most of this work has been through a fiscal sponsor, most recently Open Collective, which is a nonprofit that accepts our BTC, sells it, and then pays approved invoices to fund development work. For tax reasons, we cannot sell our BTC directly: we can only give it away as tokens, and we can only give it to non-profit organizations. I've decided, in consultation with others, to transfer a small portion of our BTC (about 6%) to a new "Donor-Advised Fund", named the Tahoe-LAFS DAF. The BTC will be sold on the way into the DAF, and the resulting USD will be kept in a normal brokerage account, where it then appreciates tax-free. The advisors I've retained tell me that, with a conservative investment strategy, after expected returns, fees, and inflation, we should be able to spend 4% of the initial value per year, *in perpetuity*. We can draw it down faster if we're willing to spend principal. This is a small baby step towards creating a real non-profit/foundation of our own, but with a lot less overhead (no board or charter, or staff, just occasional instructions to the DAF about where we want them to send money). The benefits are that we get to diversify away from BTC and get a fairly consistent return, improving predictability. The return is better than you'd get on a personal portfolio, because it's tax-free. We also get to send USD (i.e. actual money) to recipients, which is a lot easier for most to accept than tokens. The drawback is that the DAF can only send funds to 501c3 non-profits, so the recipients must either already be one, or must fall under the umbrella of one. A lot of projects that align with Tahoe's values (our "extended family") have 501c3 foundations: Tor, Signal, Filecoin, the Internet Archive, etc. But it does preclude using this portion of our funds for e.g. the Open Collective-sponsored work that we've been doing the last several years, since OC is a 501c6, not a c3. I'm hoping to complete the transfer within the next few weeks. The USD will be available for disbursal in early 2026. If this goes well, and we are happy with the projects the DAF winds up supporting, we might consider transferring more funds into the DAF in the future. cheers, -Brian