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Hello: I'm Darren Tapp (汤德润) a DIF Supervisor.

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Thank you @AgnewPickens for creating that thread.

Dear community,

Do you have any knowledge about substack providing a good newsletter service.

We would want a free newsletter obviously, and substack worked with my testing. Is there any service that is better?
Two questions if you don't mind...

1. Does the DIF has an estimate of the valuation of the ten percent stake in Astound Group Ltd?

2. How much in legal fees did the DIF outlay in order to acquire the equity stake?

1) I'm expecting that this acquisition will be recorded on our books as $300k of illiquid private equity. Of course this could change.

(In general we expect to review valuations of all equity at the end of Q2 every year. We will only report a change in valuation if there is a fundraising round that closes.)

2) I reviewed Q4 emails and our books. I'm not able to locate a specific charge for this acquisition. A UK lawyer was identified to help, but our director (the lawyer one) seems to have taken care of it.

When I prepared the Q4 report there was an expense from a law firm I did not recognize, I mistakenly thought this was associated with Astound. After reviewing emails I've determined that this expense was unrelated to Astound as it was billed in Q3 and paid in Q4. It was invoiced before the discussion with Ash.

For clarity the Astound acquisition was not a purchase by the DIF. Previous proposals, from Ash, said the equity would be transferred when possible. We had to legally treat this as a gift as Ash was under no legal obligation to transfer the equity.
With all due respect to the DIF supervisors, whose efforts I greatly appreciate, I have to register my unhappiness that they decided to accept a gift of equity from Ash. Both Switchly and DashRetail are not real products with actual users* IMHO and so both are worth exactly zero. Here is the math I come up with:

0 + 0 = 0
0 * 0.1 = 0

So the DIF's investment in Astound IMHO is worth zero. Please understand that I am not posting this to be malicious. I know that people make mistakes and no one is perfect.

* DR has no top-level web site and no user agreement and subsequently no terms of service. AFAICT there has been no update to the software at app.dashretail.org for over a year. Switchly appears to be non-functional. Maybe some brave person can try sending some coin there and see if they get anything back.
Thank you for expressing your displeasure @Geert.

Two facts are very relevant and strongly influenced the DIF's acceptance of this equity.

1) The DAO voted to fund Dash Retail as recently as last year.
2) Supervisors first and foremost duty is the network. Supervisors then have a duty to act in the interest of the DIF as an agent to support the network.

Thus the only question in front of the supervisors was "is the DIF with equity in DAO supported astound better than DIF without equity in astound?"

I hope this reasoning is understandable and relatable, even if specific community members may disagree.
OK, I see speculation surrounding our election and recent events. I'm going to put out unofficial numbers right here, right now. My intention is to get facts out and hopefully reign in speculation a bit.

So I'm beginning preparing our Q2 report. Our bookkeeper has not had time to review any of this, hence, unofficial.

Equity Positions:

Note: I am in the process of going thorough and trying to update the valuation of DIF equity. This is an involved process that involves many emails with our partners. This process is complicated by the fact as this is our (the DIFs) first time we haven't really settled on what the bar is for reporting a valuation change.

Ready Raider $47,112.91
--in Q2 we determined that we should report the value of this equity as $47,112.91 as this was the DASH value when ReadyRaider received it.
Quadency $100,000
--Not aware of a valuation event, currently investigating
Valkyrie $100,000 invested
--With the close of their series A we expect this is valued at a good multiple just waiting on exact numbers
CrayPay $100,000
--It's verified that there is no valuation event, but a significant one is planned
--DashDirerect is still soon, and this is verified by more than one source
Q1 we had no investment outlays
Q2 we had two investment outlays:
88i $250,000 invested in this Brazilian company.
--Subsequent investment has come in valuing our investment much higher, supervisors will need to decide how to report this. It might be better to wait until they close a round.
TBA $150,000 invested (Brazil)
--I just talked to this partner and they are not ready to announce until they close the round. The DIF was early and an equal partner in this round.
Astound/Dash Retail
--We also acquired 10% of the shares of Astound that owns Dash retail. The DIF did not directly pay for this equity. It was legally a gift in exchange for previous DAO distributions.

All these investments we expect to have a direct application of Dash in the business models. Some are announced like DashDirect other's are not announced and we defer to partners to decide on how best to announce their products.

Liquid assets as June 30 2021

$353k USD and 1960 Dash spread between trezor/Liquid Exchange/and our US Bank account
(and) We have 2.7 BTC tagged to be used for a crypto specific investment (not equity)
We also made a $25k non equity investment that is short term (3 month horizon) and will pay interest over that term.
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I'm happy to report to the community that the 2.7 BTC which was set aside in Q2 is for the purchase of RUNE. This purchase has already started and will be completed in coming weeks.

This RUNE will be used to help establish DASH as an asset that can be traded on THORChain. Most likely, after Dash is available on THORChain, the RUNE owned by the DIF will be used to add liqudity to a DASH/RUNE pair.
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On another channel I received a question: What‘s the reasoning for are beginning to purchase a significant amount of RUNE?

Here's the answer I provided:

The Rune will be used to vote to add Dash as an exchange asset on THORChain once it's available. We consider THORChain to be and up-and-coming DEX. After Dash is added the Rune will be used to provide liquidity to a DASH/RUNE pair on THORChain. We expect liquidity providing to be revenue positive, although there are risks, it should outperform 50/50 exposure to DASH and RUNE.
On Reserve Management

The DIF takes an approach of keeping reserves 70%USD/30% Dash. Every month, we check what the USD to Dash ratio and if it's over 50% Dash, sell dash. If it's under 10%, Dash buy dash. Every sell or buy brings us back to 70%/30%. In July the DIF was 40% Dash and 60% USD so no balancing this month.
The DIF currently has over $300k in the bank as USD. We also have $25k owed to us which is earning interest and secured.

The DIF's strategy is algorithmic so we don't have to try to predict what the market does going forward. After approval, we don't need to spend valuable meeting time debating this item.
On international strategy

I wanted to pursue an international strategy for among other reasons:

  • I believe Dash is a project that should serve the world and not just one political jurisdiction.
  • I believe the DIF serves Dash which serves the world.
  • Multiple jurisdictions spread out political risk for the Dash project as a whole. It's a political hedge.
  • The advantages of Dash may be more apparent to regions with recent currency issues.

When supervisors investigate an investment in a country there are several considerations.

Peace index--I like to look at this, because it's hard to operate in a region at war or experiencing internal strife.
Population-- The larger the population the larger the possible impact.
Gross Domestic Product--Again larger GDP implies a larger possible impact
Political Situation--Would want to avoid regions that will nationalize in the future, or do not have legal protection of private property.
Regulatory Cost--Of course, lower costs are attractive.

I or the DIF investigated the following jurisdictions over the past year.

China--I received help from community members, identified challenges and did not find a clear path forward.
Nigeria--The DIF did spend a lot of time investigating Nigeria. It was identified as an up and coming financial hub of Africa. The DIF was investigating how to operate in Nigeria even though we identified that the poor peace index score was due to seasonal fighting in the north. The DIF quickly abandoned this investigation when the artical came out about banks being prohibited from processing crypto related payments.
Other Countries--Other countries were studied but not enough information was available to us.
Brazil--Rodrigo did introduce us to some very attractive Brazilian opportunities. We said yes to three, have completed investment in two and refused (at least) two.

The DIF also had an opportunity to invest in a US company that serves Spanish speakers. The DIF turned that down as the valuation was through the roof and the round was not structured in a way that would maximize value to investors.

Please know that a lot of research went into all these decisions. Brazil has a peace index on par with the US. Brazilian population is large 220m if I remember correctly. Brazil seems to be committed to respecting property rights as evidenced by working toward privatizing the previously nationalized oil industry. Brazil has had a few recent bouts with hyper inflation, there may still be distrust of their local currency. Regulatory costs are more in some ways, and less in others when compared to the US.

Please note that South America is very diverse. Investment in one South American company does not mean that the DIF can or will invest in every South American country.

I'm looking forward to bringing our new supervisors into our discussion.
I really like the post above. I love how open and creative this forum is. Im still going through lots of the threads but hope to contribute soon :)
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