Pre-proposal; Grant leftover funds to MNOs at end of each treasury cycle

[forro]

Does anyone have any ideas on getting more engagement on this discussion? There are many OGs in the Dash community that haven't commented here or on reddit. The reddit post has over 1200 views, but only 18 comments and 12 upvotes.

Apathy, like corruption and cancer, is a difficult thing to cure once it's taken root.

 

[Bridgewater]

Sure. If the goal is to better align the masternode costs and benefits with the non-masternode costs and benefits when the masternodes are making voting decisions, then the consequences of voting and not voting need to be felt in proportion by both groups, which will be related to the ratio of coins held by each group. That will change over time. A dynamic balance between burning/not-creating coins, which doesn't inflate the non-mno or the mno holders, and allocating the remainder to mno holders directly, takes both aspects into consideration and automatically adjusts the incentives in the DAO with changes in market conditions, ensuring that both groups remain represented in the decision making process even as things change over time.

The optimal proportion of the allocation between those two things might not be exactly the same as the ratio of coins held by each group, which adds an extra level of subjectivity to work out. Making it 100% mno is definitely much better than making it 100% burn/non-creation as it is now imo, but is unlikely to be optimal and less likely to remain optimal as time goes by.

Can you give some sample scenarios?

The current Dash collateralized is 37.5%. With your idea, if no proposals were funded, the 10% remainder would be distributed in the form of 3.75% to masternodes as extra reward, and 6.25% would get burned/non-created. Is that what you mean?

 

[Magnus]

Can you give some sample scenarios?

The current Dash collateralized is 37.5%. With your idea, if no proposals were funded, the 10% remainder would be distributed in the form of 3.75% to masternodes as extra reward, and 6.25% would get burned/non-created. Is that what you mean?

In short, yes. But if we went down that road it might also be better to weight one side of the allocation because allocation to masternodes benefits them, but the allocation to the burned/not-created option actually benefits both the non-masternodes and the masternodes again, so masternode interests essentially get double counted. But you can actually make a number of different arguments as to how much the weighting should be, depending on how much you think the masternodes are able to skew things in their own interests when allocating non-mno dash inflation, how much the non-mno collateral holders benefit from appropriate mno investments, and how those two categories should be balanced against each other. The simplest and probably the least subjective way to do it is the one in the example you described.

Your example above could be said to have the formula:

mno_payout = collateral_fraction * treasury_fraction;
burn = treasury_fraction - mno_payout;

So if 50% of dash coins are locked in masternodes one month, and no proposals pass, that would be mean that the 10% treasury gets allocated:
Extra MNO Payout = 5%
Total Burned = 5%

Then if in the next month market conditions change and 60% of coins are now locked in masternodes, then the amount of other people's money that MNOs could be spending is lower, they are "spending" or not "spending" more of their own money, and so the formula automatically adjusts the allocation to account for this:
Extra MNO Payout = 6%
Total Burned = 4%

But you could also put in an extra term to remove the double counting of masternode or non-masternode interests as:

mno_payout = collateral_fraction * treasury_fraction - weighting;
burn = treasury_fraction - mno_payout;

So for the first example if: weighting = ((treasury_fraction - collateral_fraction * treasury_fraction) * collateral_fraction);
Extra MNO Payout = 2.5%
Total Burned = 7.5%

 

[forro]

I understand the desire to make things fair non-MNO holders of dash, I think it's important to remember MNOs are large stakeholders. They have passed up many other far more lucrative opportunities to remain invested in Dash.

We are asking them to give us their time and effort to join us in scrutinizing proposals and proposal owners, reading, pondering, asking questions, awaiting responses, checking back in, rebuttals, debating... Things that aren't exactly fun. Time they could be spending with their family, their work or business, their hobbies and free time. We are also asking them to stay engaged and keep an eye on proposals to try to determine if they are being run honestly and efficiently, and to evaluate their results. Also evaluating all new proposals while keeping in mind whether the PO has submitted a proposal in the past and if the PO was honest and effective.

It's a significant additional, ongoing investment of their time and effort, in addition to their financial investment.

I think it's fair that all remaining funds of the full 10% are consistently granted to them.

 

[Magnus]

I understand the desire to make things fair non-MNO holders of dash, I think it's important to remember MNOs are large stakeholders. They have passed up many other far more lucrative opportunities to remain invested in Dash.

We are asking them to give us their time and effort to join us in scrutinizing proposals and proposal owners, reading, pondering, asking questions, awaiting responses, checking back in, rebuttals, debating... Things that aren't exactly fun. Time they could be spending with their family, their work or business, their hobbies and free time. We are also asking them to stay engaged and keep an eye on proposals to try to determine if they are being run honestly and efficiently, and to evaluate their results. Also evaluating all new proposals while keeping in mind whether the PO has submitted a proposal in the past and if the PO was honest and effective.

It's a significant additional, ongoing investment of their time and effort, in addition to their financial investment.

I think it's fair that all remaining funds of the full 10% are consistently granted to them.

It's not a question of someones definition of "fair", it's a question of what incentives actually create the best decisions given the system we have in place. The misalignment that makes the system terrible at the moment can also be over-corrected. If you want to compensate masternodes more than they are for voting, then perhaps we shouldn't change anything at all and they can just spend everyone's money on the things that they like, but that's not what you've said up to this point.

If the aim of the proposal is about giving masternode operators the option to vote themselves more money, then I think that's a huge mistake and not something I will be voting for. I'm happy if this is the first step, or the easier thing to do in terms of programming for now, but unless the DAO actually has aligned incentives, this coin will continue to slip as voters waste money, either on proposals or on themselves.

 

[Bridgewater]

Thanks for the explanation, Magnus.

I think I agree with forro here, though.
Regardless of Dash quantity extant, MNO are committed not-only financially but time and effort-wise.

The number of masternodes is in a slight downtrend. The point should be to incentivise holding, not to make things equal for non-committed holders. If want to be part of the club and get some of those benefits, that's perfectly fine. They can even do it with fractional nodes.

Plus, I think it will be a bonus to get rid of the range-based total emission estimation and return to a fixed number. Some hardcore tokenomics geeks look at those numbers before investing, and when a really conservative one sees anything remotely questionable on predictable supply they might steer clear.

 

[Magnus]

Thanks for the explanation, Magnus.

I think I agree with forro here, though.
Regardless of Dash quantity extant, MNO are committed not-only financially but time and effort-wise.

The number of masternodes is in a slight downtrend. The point should be to incentivise holding, not to make things equal for non-committed holders. If want to be part of the club and get some of those benefits, that's perfectly fine. They can even do it with fractional nodes.

Plus, I think it will be a bonus to get rid of the range-based total emission estimation and return to a fixed number. Some hardcore tokenomics geeks look at those numbers before investing, and when a really conservative one sees anything remotely questionable on predictable supply they might steer clear.

No worries. For what it's worth the idea of changing the hard coded emission scheduled and allocation to pay a certain group of people within the network with intent to incentivise holding sends chills down my spine. It sounds a lot like a kind of central planning that would scare off a lot of people, and rightly so imo. The more predictable emission would be a bonus, but a comparatively small consideration I suspect.

 

[Bridgewater]

If the aim of the proposal is about giving masternode operators the option to vote themselves more money, then I think that's a huge mistake and I not something I will be voting for

I don't think that's what it has ever been, at least from my point of view. Financially, it doesn't even add up to that big of a difference for the MNO. It is more about the principle.

Unfortunately, any updates voted upon by the MNOs that directly benefit them will always be seen as them selfishly voting themselves largess. From that point of view, we should have never changed with the miner/mno/treasury split at all. But I think we can all agree here that the goal is to increase both vote quality and quantity (in addition to incentivising masternode ownership)

 

[Magnus]

I don't think that's what it has ever been, at least from my point of view. Financially, it doesn't even add up to that big of a difference for the MNO. It is more about the principle.

Unfortunately, any updates voted upon by the MNOs that directly benefit them will always be seen as them selfishly voting themselves largess. From that point of view, we should have never changed with the miner/mno/treasury split at all. But I think we can all agree here that the goal is to increase both vote quality and quantity (in addition to incentivising masternode ownership)

The perception is a problem, but the intent is more of one. I think when people start to say that voters deserve a larger share of other network members hard-coded inflation money to compensate them for their time and effort at a price that they themselves are determining, then we have strayed into a totally different thing from fixing incentives. I could not disagree more with that both on principle and in practice, and if that's the only argument against a dynamic allocation, I don't think it's a strong one. There are actual network voter incentives to fix here, and fixing them benefits everyone in the network by making the entire network logic function in a more coherent way. I personally think that masternodes are already grossly overpaid, and should never receive more than the overall general inflation rate, but whatever your personal feelings happen to be, personal feelings don't make for good byzantine fault tolerant network design. I'll leave it at that.

For the record, I would have been totally opposed to the miner reallocation too if I had thought that the miners themselves didn't have the final say on the upgrade. That's the point of blockchain consensus, to stop these kinds of action unless they benefit an overwhelming majority of the network participants, not a select group or a special interest subset.

 

[qwizzie]

@forro looking at your orginal proposal (grant leftover funds to MNO's at the end of each treasury cycle), what will be the motivation for MNO's to actually participate more in the Dash Governance system and start to vote more on budget proposals, when they get any unallocated leftover funds from the Dash Treasury anyways?

It feels to me like giving MNO's a bonus (leftover funds) without MNO's having to do anything for it. For those MNO's that are simply not interested in Dash governance, how will this change their (untill now non-existing) voting behavior ? How will it bring those MNO's into the fold ?

Also a reminder that the leftover funds are usually very small in scale (a low amount of unallocated funds of the 10% DAO, to be distributed among 1K Masternodes and 4K Evo Nodes --> 3478 nodes). Lets say 100 dash remains unallocated at the end of a specific treasury cycle.
That will mean 100 dash/3478 = 0.028 dash / $0.89 to each masternode for that month, for free and without any conditions set to it.
Small change = small effect on voting behavior.

The 100 dash is just a random number, i don't know how much dash usually remains unallocated each treasury cycle. We could monitor current treasury cycle, to see how much remains unallocated after three weeks --> https://www.dashninja.pl/governance.html.

And with the blockrewards (including the 10% DAO) decreasing by 7.1% yearly, existing entities in the Dash Governance system will most likely try to allocate the 10% DAO more and more in the future. Supported by major masternode whales, already active in the Dash governance system.

I just don't see the motivation for changing MNO's voting behavior here. Particularly the voting behavior of those MNO's that are currently not active in the Dash governance system.

 

[TheNetworkIsBiggerThanYou]

There is a better way.

Look at what anyhedge/ bchbull are doing. They are offering decentralized long and shorting. They do not have liquidity though to offer it in bulk. Dash does.

MNs or some subset of MNs should put their money at risk by going long the collective 1x shorts of dash users that do not want to be exposed to price fluctaitons.

Eventually/immediately you will have better voting, because people who will get voting rights are risking losing their Dash (if the dash price drops) and if they want to be made whole they need to wait until dash price gets bullish again to re-earn the dash they've lost.

Not only will you get better MN voting participation. You can open it up to more people to vote because the 1000 dash limit can be lifted.

Best of all, is the stable price feature though. This is the missing piece for Dash. If Dash has this, the circular economy can grow. Merchant adoption will sky rocket. Selling a burger for dash means you will not need to become a dash investor. Your wallet will automatically maintain the value of dash you earned relative to whatever you want (usd, euro, gold, btc)

Anyone that finds this idea interesting is encouraged to join to discuss: https://discord.gg/fauuVXtm

 

[TheNetworkIsBiggerThanYou]

If Dash hopes to be successful it needs to figure out what the DAO treasury is and more importantly what it is not. Earning from the treasury should not constitute a business's only income source (with very rare exceptions).

The DAO should be hiring existing businesses for discrete things. Why?

Existing businesses have products and services already. They have other customers willing to pay for these things, suggesting they are comptent and their services are valuable. They have experience. They will not disappear if the treasury funding drys up or goes else where. They don't become entitled and think of themselves as Dash DAO employees. They are less likely to engage in politicking to subvert/manipulate the DAO to their own ends, as their paycheck is not entirely derived from the DAO.

Unless this reality is accepted. Unless the DAO rejects technosocialism for free enterprise, the treasury will continue to produce awful results.

 

[forro]

Proposal submitted. Please support it and watch the project come alive again.

https://www.dashcentral.org/p/LeftoverTreasuryFunds

 

[vazaki3]

Does anyone have any ideas on getting more engagement on this discussion? There are many OGs in the Dash community that haven't commented here or on reddit. The reddit post has over 1200 views, but only 18 comments and 12 upvotes.

Apathy, like corruption and cancer, is a difficult thing to cure once it's taken root.

A smart way to strike the voting apathy, is to temporarily not include in the calculation of the voting participation those who have not voted for a long time.

Why dont you try this first?

 

[vazaki3]

Votes: 47 Yes / 254 No / 65 Abstain -

Calculated Numbers - BASE3

Dash masternodes Number Voting Calculation

mnowatch.org

Do these 254 NO voters that represent THE 69% OF THE VOTERS EXPECT THEIR DECISION TO BE IMPLEMENTED FOR 100% OF THE TIME?

This is absurd!! THE DASH COMMUNITY MUST NOT BOW TO THE TYRANNY OF THE MAJORITY!!!!

As long as we have reached the minimum participation of 10% (or 363 votes) in this proposal, I suggest we divide the time to 254+47+65=366 pieces. For the first 254 pieces of time this proposal should NOT be implemented, but for the rest 47 pieces of time the proposal WILL be implemented (provided that @forro will bring us the required code).

The maximum time window could be 366 budget cycles or 30 years, because 30 years do not exceed the human life time. But lets vote/define a time window of 5 years=60 budget cycles . This means that for the rest 4 years and 3 months the status quo remains, but for the last 9 months forro's idea will be tried. Provided of course that the YES voters remain 47 after 4 years and 3 months, otherwise the proposal will be tried for as long as the number of YES voters will be that date.