We are excited to announce that the “Dash Ventures” project is nearing completion, and we are now preparing to formally operationalize the investment fund. This post explains the background of the project, outlines the legal structure selected, and describes the final steps — including supervisor elections — that must be taken to complete its setup. The legal name of the entity is “Dash Investment Foundation”. The Dash Investment Foundation was incorporated on March 21st as a Cayman Islands foundation company limited by guarantee. We believe it is the world’s first ownerless and memberless investment fund. Dash Investment Foundation will be tasked with strengthening the Dash network through investment operations funded by the network itself.
Dash is now the first cryptocurrency network with a proposal system capable of investing in its own ecosystem. No longer must all distributions from the proposal system be grants. The foundation creates a bridge between the network protocol and the legacy financial and legal systems. This opens new possibilities for entrepreneurs and the Dash network to partner and mutually benefit from the funding available through the Dash network via Dash Investment Foundation. Importantly, this capability has arrived in time to benefit developers looking to build applications on the Evolution platform.
Dash Core Group first proposed investigating the creation of a network-controlled investment fund in June of 2018, with the aim of enabling the Dash network to invest in higher-risk opportunities, by enabling proposal owners to issue equity or other assets in consideration of the network funding. Results from initial legal research was promising, and we secured additional funding from the network in August of 2018 to pursue the creation of the legal entity.
Dash masternode operators will elect the six supervisors that oversee the foundation. Key organizational and operational decisions would be put to the supervisors for approval by the foundation’s directors. Day-to-day operations will remain with the directors and investment manager. The supervisors may consist of virtually anyone trusted by the network to carry out supervisory duties, while the directors would consist of experts with the appropriate skills to oversee the foundation.
Glenn Kennedy from Paradigm Governance Partners and Casey McDonald from Calderwood, are Cayman Islands-based governance professionals. They will serve as the foundation’s initial directors and supervisors. We also need an additional slate of 4 supervisors elected by the network. Starting in the second year, all six supervisors will be elected by the network.
Our intent is to enable Dash Ventures to operate completely independently from Dash Core Group. To ensure a smooth handover, I will offer my services to the foundation for the first year as a non-voting participant to answer questions, and provide any expertise, direction, guidance, and counsel to the supervisors to help ensure all intents of the foundation’s constitution are clear.
To fully operationalize the entity, there are three steps remaining:
- Elections: an election must be held for the four open supervisor positions.
- Operational Funding: the Dash Network will need to approve a proposal to fund the foundation’s operating expenses for the first two years.
- Investment Funding: the network will need to fund a proposal that will allocate assets to Dash Investment Foundation to seed its investment program.
Elections for the supervisors will be held starting May 23rd, and we plan for the election to conclude by June 16th. Details on the election — including eligibility requirements and process — will be released shortly. We will run the election leveraging the same process and technology as previously used for the trust protectors election, and Dash Watch has again agreed to audit the results.
A multi-month proposal to fund the operating expenses for Dash Investment Foundation will be submitted to the network for the next proposal cycle. The proposal will request funding for the estimated costs for the first two years of operations. This will include directors’ fees, corporate fees, disbursements, certain legal fees, bookkeeping services, custody and banking services, and a contingent reserve for incidentals or closure if continuation funding is not secured at the end of the first two years.
After both the election and covering the operating costs, Dash Investment Foundation will be able to finalize a few remaining details. These will include:
- Appointment of an investment manager
- Ratifying an overarching mandate for the foundation and internal governance and operational protocols
- Ratifying a mandate for investment objectives (e.g., maximize returns vs. growth of Dash usage)
- Establish investment funding processes (e.g., process for proposal owners to enter legal agreements)
We have many firms and individuals to thank for their role in establishing Dash Investment Foundation. From Dash Core Group, Fernando Gutierrez and Glenn Austin were instrumental in helping me drive the research and execution. Scott Weiss from Weiss Brown identified appropriate legal experts. Jonathan Morrison from Frazer Ryan Goldberg & Arnold coordinated jurisdiction research, along with Bill Jaffa and Layne Simmons from Jaffa Simmons. Matthew Taber from Harney Westwood & Riegels was local counsel in the Cayman Islands and was instrumental in finalizing the structure. Glenn Kennedy and Casey McDonald helped turn concept to reality by executing the plan. Finally, I’d like to thank the network for the financial support necessary to complete this project. Dash Core Group values the trust the network places with us as we identify new ways to add value to the network. We are thrilled to deliver a successful outcome for the network.
Look for additional communication in the coming days regarding the supervisor elections and the proposal to cover initial operational costs. We are looking forward to completing the process and witnessing the tremendous impact this innovation will have on our network.