Elven (Elven.com) is an automated Web3 financial reporting platform that provides transparent, compliant, and auditable financial reporting services for Crypto projects and institutions. At present, Elven has covered 7163 tokens and 5534 NFT projects and identified 107 accounting entities. The number of daily transactions has exceeded 5 million.
Elven’s vision is to become a one-stop financial and compliance platform to realize automated accounting, financial auditing, tax monitoring, and compliance management processes of the crypto industry, making crypto more transparent and achieving a wider range of trust.
ABCDE has led the investment in Elven in the Seed round, followed by Eastern Bell Capital.
1. Crypto financial transparency and compliance has become the general trend
During the storms of FTX, Alameda, and Terra in the past year, the Crypto industry has exposed several serious financial problems:
- The crypto finance are in a black box, and there are a large amount of misappropriation of user funds.
FTX has 16 billion USD in client assets, but the misappropriated client assets has exceeded 10 billion USD;
- The Web3 financial reporting is chaotic, and a large number of Crypto projects do not have any financial reports.
John Ray, the new CEO and liquidator of FTX who took over from SBF, even though he had overseen the Enron liquidation, he had to admit after looking at the financial situation of FTX: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,”
- There is a huge gap between traditional audit and Crypto audit
Crypto does not have sound financial auditing standards. Although the chairman of the FASB stated that a Crypto accounting proposal will be issued in the first half of 2023, traditional audit companies, including the Big Four accounting firms, are not motivated to conduct Crypto audits.
The whole Crypto industry is in urgent need of more transparent and compliant financial disclosure and reporting services to dispel the public’s doubts and misunderstandings, and rebuild the transparency and trust of Crypto. Elven is a very innovative project in this field.
2. Generate Web3 financial reports with one click
Elven has realized the function of generating financial statements with one click. All you need is to enter an contract address, supplement the project initialization configuration, and Elven can output day-level balance sheets, income statements, cash flow statement and auditable books based on the recognized GAAP/IFRS accounting standards. At present, Elven has covered 7163 tokens and 5534 NFT projects, and identified 107 accounting entities.
For the first time, Elven has realized the accounting “three tables” for the Crypto industry, and based on the three tables, we can tack back the impact of events on blockchain and quantitatively analyze the financial results:
- Balance sheet
Based on generally accepted accounting principles (GAAP/IFRS), Elven can generate the balance sheet of the current assets and distribution of a crytpo project, and you can choose any period to generate financial reports from the first day to the latest day.
- Income statement
Elven helps crypto projects track gains and losses with mark-to-market updates, generate an income statement and optimize taxes by tracking the cost basis (LIFO, FIFO, etc.) and exchange rates.
- Cash flow statement
Elven also help crypto projects analyze entity’s ability to generate future cash flows by tracking inflows and outflows in on-chain events and Monitor the ability to pay debts and meet obligations
3. We need Crypto-Native financial system
Extending from the financial statements, Elven will cut into both centralized and decentralized institutions in the future and become a one-stop crypto-native financial system:
- To help Crypto projects, DAOs, platforms, etc. to improve financial transparency
- To help asset management companies calculate portfolio return and reports on a mark-to-market basis
- To help financial institutions output tax planning and compliance declaration with one click
- To help policy-making institutions better understand Crypto and formulate reasonable regulatory policies
We believe that under the trend of financial transparency and compliance, there will be a new Native financial auditing company in Crypto.
The difference and barrier between Crypto auditing and traditional auditing is that everything in the Crypto is digital and contracted. Auditing companies not only need to have a deep understanding of the audit itself, but also the analysis of Crypto contracts, token economy and Crypto business model.
Second, the world of Crypto is 7*24 hours, which means that financial audits need to be automated and real-time. This is the reason why traditional audit companies are prevented from Crypto, and it is also an opportunity for the rise of new Crypto-native financial services.
From today’s Web3 to the future Metaverse, financial statements and auditing will be new paradigms and patterns. ABCDE expects new financial systems to emerge in it and will continue to invest in this process.
ABCDE is a VC focused on lead-investing in top Crypto Builders. It is co-founded by entrepreneurs, CEOs of listed companies, and top researchers who have been in the Crypto industry for more than 10 years. The co-founders of ABCDE have built multi-billion dollar companies in the Crypto from the ground up. Because we are builders, we understand builders better. Moreover, we have built an end-to-end ecosystem for our builders, including listed companies(1611.HK), exchanges(Huobi), SAAS companies(ChainUP.com), media(CoinTime.com), and developers platforms(BeWater.xyz). If you are a builder with the dream of changing the world, join us to build the next generation crypto network.