The purpose of Dash is to be currency used in everyday life. Our primary goals center around achieving mass scale of use as payment network that caters to both traditional financial institutions as well as previously un-banked groups.
Within different projects associated with Dash different metrics are used to evaluate how we are progressing towards our goal. Some indicators that have been used are active addresses, active wallets, median transaction amount, wallet downloads, number of merchants who accept Dash as payment, and number of transactions.
Dash aims to be the fastest, easiest to use, most secure and at the same time cheapest/inexpensive form of digital cash that can be used by anyone anywhere anytime for anything at a mass scale. A direct metric for success is Dash’s active wallets which roughly reflects its userbase. An indirect metric would be, like for most other cryptocurrencies, its market capitalization.
Dash is a decentralized network which controls its development company called “Dash Core Group Inc.” Its website is dash.org. The network is also legally represented by a trust known as The Dash DAO Irrevocable Trust and the Dash Investment Foundation which is able to hold equity in place of the network. Both institutions represent a world’s first for cryptocurrency. The Dash network itself is one of the oldest DAOs (likely the first) in existence and is able to hire and pay people to improve its protocol and network.
Dash is structured as a DAO. The aforementioned masternodes are servers that have been set up that have proved they are in possession of 1000 units of Dash. These servers then get the right to vote on the allocation of up to 10% of the block reward to any people/groups that request that money. Payouts happen 12 times per year, approximately once per month.
This group of people serve as the governing board of the Dash DAO, making funding decisions on a monthly basis, and when required, voting on governance decisions that need to be made (for example, whether Dash would increase its block size from 1mb to 2mb was decided on in one voting cycle). It is worth noting that governance decisions are non-binding (at the protocol level), in that the only risk to a DAO funded organization if they do not follow the instructions of the DAO members is that they might not receive funding on further asks.
Funding decisions are decided by satisfying that
(Yes votes – No votes)> (Total Masternodes/10)
Within the groups that the DAO funds there are different levels of cooperation. The group we provide funding for to develop the software protocol is called Dash Core Group (DCG). They have so far taken a leading role in many business development and community initiatives. However, others can step up to take over / also perform that role, as there is nothing in the protocol requiring DCG to serve as the coordinating entity.
Dash is a censorship resistant permissionless network that can be used by anyone without restrictions. Dash uses the same keypair methodology known in Bitcoin, but the upcoming Dash Platform release will entail a so called DPNS (Dash Platform Name service), which enables users to be identified with usernames (while new addresses are generated for each transaction in the background to provide basic privacy), that can be registered for a small fee.
There are four broad levels of involvement with the project: Users, Masternodes, Miners, and DAO funded organizations. Masternodes can further be divided into three possible roles: Owner, Voting Key Holder, Manager. These roles are designated by who holds each of three keys. The voting and managerial keys are linked to the private key of the wallet that holds the masternode collateral (the Owner’s key). All three masternode keys can be controlled by a single person.
Being a miner and user have no restrictions. Becoming a masternode (owner) similarly has no restriction other than the possession of 1000 Dash. Becoming part of a DAO funded organization relies on being employed by an organization that has been approved for funding by the DAO. This is likely the most restricted role in the ecosystem.
Anyone can propose changes to the network by putting up a proposal to the Dash DAO. The only restriction on putting a proposal to the network is that a 5 Dash fee is paid. However, commit access to the main Dash Github is currently controlled by DCG.
Disputes are voted on by the masternodes to resolve governance decisions, however as I stated before these decisions are not technically binding. Because the Github repository is open source, anyone is free to fork the code and create their own version of the protocol to compete with the DCG-maintained version.
As I have already detailed there is no barrier to gaining entry into becoming a masternode on the network other than proof that you own 1000 dash.
The only time someone can vote on behalf of another is if a masternode owner gives their voting key to someone else. This person has no power other than to cast votes in the DAO. As all masternodes have no identity directly tied to them there is no reason for anyone in the network to be aware that this has happened.
In Dash we have 3 types of groups in the network:
- Miners: These have the same tasks, responsibilities and rights as Bitcoin miners. They decide which software/client to run and thus have the biggest say in the direction of the overall protocol. Miners that never upgrade are able to freeze the network into a certain protocol status.
- Masternodes: These are servers that constitute the backbone of the network. In a first approximation they are identical to full nodes in Bitcoin. But they provide an array of additional services. Each Masternode is backed by 1000 Dash that are held by the Masternode owner (MNO). Masternodes each receive one vote and thus get to decide how to disburse Treasury funds.
- Users: These are people that fall in neither category and simply utilize the services of the Dash network.
No mechanisms exist to exclude standard users or miners, however bad acting masternodes can receive a consensus-enforced penalty which can prevent them from receiving their portion of the block reward.
Other groups are approved through the DAO. Receiving funding is tantamount to a stamp of approval from the masternodes. Current groups being funded for January 2020 by the DAO include Dash Core Group, Dash Brazil, Dash Embassy D-A-CH, Dash Mall and Parking (Venezuela based initiative), Dash Nigeria, Dash Text Venezuela, Dash Thailand, and the Dash Investment Foundation.
As you can see, many of the proposals come from varying geographic regions due to the physical imitations of say encouraging Dash use in Venezuela, that is hard to do from the United States.
Due to the fluctuating price of Dash there are frequently groups that receive inconsistent funding due to budgetary constraints. In the January 2020 funding period for example Dash Impulse (a proposal encouraging remittances to Venezuela) and Dash Help Venezuela both did not receive funding, however in the past both groups have received funding from the network. Due to this both groups have indicated they would continue to work through the month in the hope of garnering enough votes to receive funding the following month.
Due to the nature of the DAO there is no way to exclude a group from using Dash or promoting Dash, even if they have not received funding.
For the vast majority of groups currently working for the DAO the masternodes only control an up or down vote on funding decisions, however for some groups a more complicated legal structure has been constructed on top of the DAO to facilitate its control.
Dash Core Group (DCG) is Delaware company that has 100% of its shares owned by a trust located in New Zealand (chosen due to its well-defined trust laws). The trust has been established for the benefit of the masternode owners, and the masternodes annually elect six trust protectors (who were decided on by masternode voting) in order to carry out the will of the masternodes. If the masternodes vote to either de-fund DCG or take some action in regard to personnel, the trust protectors are empowered to carry out that change since they effectively own DCG. Specifically, the trust protectors have the ability to assign or replace DCG’s board of directors. Additionally, since the masternodes control DCG we have the freedom to entrust them with vast resources, without worrying about the risk of loss should we choose to de-fund them. The Trust is administered by a professional trustee located in Switzerland.
Dash has so called “DFOs” which are Dash Funded Organizations that are financed by the Treasury. The oldest and largest DFO which is the only one also legally owned by the network is Dash Core Group Inc., a company that has no profit incentive, other than to build reserves for financial stability and solely exists to develop the Dash protocol and ecosystem. This DFO is answerable to the masternodes who can decide to defund or replace it entirely or its leadership through another important entity which is The Dash DAO Irrevocable Trust (https://www.youtube.com/watch?v=OGW4R9QucIQ)
The Dash Investment Foundation (DIF) is a Cayman Island foundation company limited by guarantee and after formation. It effectively functions as an investment fund that receives its funding from the Dash network in order to invest in businesses and own assets on behalf of the Dash network. Similarly, to DCG there are six supervisors that oversee the foundation and carry out the will of the network. There are also governance professionals who serve as director and supervisor as well as one Fund Manager who was recently hired.
Goals and Implementation
While there are no shared values as such, the project does seek to encourage miners and masternodes to act in the interest of the network as whole.
Miners use traditional proof-of-work (PoW) to arrive at network consensus. Dash is currently the largest and most profitable X11 coin to mine, so the network is fairly secure in maintaining hash rate. However, unlike other cryptocurrencies Dash uses the masternodes to check the miners and reduce/eliminate some of the problems faced by other networks. For example, blockchain reorganization attacks are not possible on the Dash blockchain unless over 50% of miners collaborate with over 40% of masternodes.
As such we place much less “trust” within the mining network and a much larger level of trust within the masternodes. The masternodes are incentivised to not abuse their power in two ways. First a quorum made up of multiple masternodes is used to verify the work of the miners and the chance of malicious masternodes being the majority picked is extremely small unless they make a very large percent of the total number of masternodes. An unsuccessful attack would result in the masternode being punished losing out on future rewards.
Secondly, every masternode represents owning 1000 dash. To gain the power to attack the network you would have to therefore be heavily invested in the network. This is considered by those within Dash as an improvement since miners are not required to hold any amount of Dash to mine, meaning if they attack the network, they don’t inherently lose any value.
Masternodes are incentivised to make good funding decisions by a similar rationale, you hypothetically would always want to do what is best for Dash’s price and number of transactions since both of those directly reflect the worth and earning potential of your masternode.
Our blockchain has never suffered from double spending attacks or a large-scale coordination of malicious masternodes, so our incentives seem to be working well in that regard.
Every masternode that chooses to vote also believes they are making good decisions; however, I would personally argue the decisions made regarding funding decisions are often irrational and based on personal relationships rather than furthering the goals of the network.
Since each proposal is attempting to do a different thing there are no universal metrics we can use to determine if projects (and by extension the masternode decision making) is successful. We must judge each project on what it hopes to accomplish. There have been several initiatives in the community to adopt stricter standards for what receives funding and continues to receive funding based on clearly defined goals and outcomes however that is still very much an uphill battle from my perspective.
This is all handled using the DAO as described above. I will add that currently all aspects of this are carried out by DCG.
As described above as long as the votes on a proposal satisfy the predefined formula it is considered passed.
(Yes votes – No votes)> (Total Masternodes/10)
Anyone with 5 Dash can introduce governance proposals. There are at least two web tools available that walk those interested in the process of submitting a proposal to the network.
As described above anyone person or group who owns a masternode voting key can cast one vote per key.
Since Dash is an open source project technically anyone can submit changes to the Github where development happens, however DCG owns that Github and decides what changes are accepted and not accepted, however through the trust structure discussed in answer #5 the masternodes control all of DCG’s assets.
In most situation DCG would implement whatever changes the masternode network dictates them to or accept changes to the Github if the masternode network approved contributions from another development team. If for some reason they don’t comply the masternodes can vote to de-fund DCG or to involve the Trust Protectors to replace DCG’s board of directors with those who will carry out the will of the voting masternodes.
If the proposal does not deal with things that are in DCG’s power, then the person who submitted the proposal most likely offered some mechanism to implement the changes they want to see. If they didn’t the masternodes can try and force one our current teams to take on the responsibility on threat of de-funding if it is important enough to warrant such actions.
Once again, the power falls into the hands of the masternodes. If there is a dispute about a policy the question can be posed to the masternodes in order to clear up the confusion/disagreement.
Because the masternodes inherently represent those who have the most financial interest in the network the idea behind our version of governance is that those people will behave in a way that maximizes the value of their Dash and the number of transactions that take place on the network (since they receive a part of transaction fees).
As a result, the market (assuming it is rationale) serves as a good indicator of the success of the decision makers in the Dash network.
None of our votes are binding. As discussed, there is a system of financial incentives and legal structures that encourages all actors to comply with the will of the masternodes.
All votes both requesting funding and those of governance questions require the same threshold to pass.
(Yes votes – No votes)> (Total Masternodes/10)
No. Everything can be decided by masternode votes.
I would say changing Dash is easier than other projects because we can have our debates and our arguments and then there is a day when the voting is over. The decision reached at that point is the decision.
So far no large changes have been made since its inception however within the next few weeks there is expected to be a proposal put forward from DCG to re-balance the percent of the block reward that goes to the treasury and masternodes now that our system is less reliant on miners.