Dash Business Model upgrade: Invest in start-ups

IronVape

Member
Masternode Owner/Operator
Mar 26, 2016
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We're not ready for that leaven of DAO yet, but it is good to have these discussions and start looking at how we will eventually accomplish these ideas.
 

halso

Active Member
Apr 27, 2016
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Sydney, Australia
Remember MNs get a portion of the transaction fees also. So even if we don't get an explicit dividend from funded projects, we still gain from the additional activity they create on the network.

However, if we did get a dividend, my preference would be for those DASH to be burnt and taken out of supply.
 

Technologov

Member
Mar 5, 2017
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Israel
Burning Dash is fine, causes deflation for all users.
But even better and faster growth effect would be achieved by redistribution of profits into new start-ups. This will allow for compounding interest.
 

Voluntary

Member
May 14, 2016
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Dash Address
XivwUmSu5davqhqc3BX1j4w6dskzNFihQQ
I like the idea of giving proposals the option between requesting a donation or an investment with potential for return / loan to be repaid.
 

Technologov

Member
Mar 5, 2017
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Loan denominated in DASH is a bad idea. Start-ups will go bankrupt instantly. Dash is ultra-deflationary currency, even more so than gold and more so than Bitcoin, due to the way Nodes work and take currency out of circulation, even when nobody invests in Dash (where Bitcoin and Gold miners normally sell majority of their proceeds on the open market).

I expect the start ups to pay us dividend, that are more in fiat dollars, but less in Dash coins than what they took in. What it will create is a demand for Dash coins, and increase the dollar value thereof. It needs to be investment in stock. I would like to create an Asset-based economy, rather than debt-based financing.
 
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Fiicus

New Member
Mar 24, 2017
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I like this idea, and it's important that we think about ways that we could improve this process. Ultimately though, I believe that this would add needless complexity to every proposal, and would instead be detrimental, especially at this stage in the game, where we don't really have the market to demand an ROI from people who propose stuff to us. As an option, it seems fine, but then we'd have to work out the legality of things, which is something that seems like a bit too much of a burden. Lastly, it's important that if we are to implement something like this at some point, that all the legal issues are hammered out before hand, as trying to scrounge the last dollar and instead opening yourself up to legal issues, is foolish.
 

1S8R

New Member
Jun 15, 2016
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I think most of the problems mentioned earlier here would be irrelevant if we not try to rescue the burnt coins but just let them vanish. The supply of coins will get smaller and every dash holder will get paid his dividend in increased value of their tokens.

If it's a well known standard address the official figure of available coins could be updated too.
 

AndyDark

Well-known Member
Sep 10, 2014
353
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The ROI on funding DAO's / one-off projects is the value it adds to Dash as a whole. Forcing budget recipients to provide additional direct financial returns would change the dynamics a lot. E.g. the Core team (really, the Core DAO) would have to become profit orientated to return a % to the network directly. E.g. Core DAO receives 1000 Dash per month and would now need to make (eg) 23% profit and and pay this back to MNOs (230 Dash) and start thinking of revenue streams into the Core DAO to meet profit obligations (think Blockstream) instead of offering the best priced contract to develop Dash software and ecosystem with the most value. It's basically a warped incentive model for most cases.

Nothing is stopping someone setting up a DAO and offering to do this (it might be good in some cases, how the profits would be returned isn't clear though). Forcing it would create some bad dynamics for me.
 
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stan.distortion

Well-known Member
Oct 30, 2014
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I don't think this is possible because the DAO/Blockchain isn't a legal entity. There needs to be a legal entity to 'own' the shares.

What you'd have to do to make this work is something like:

• start a company and offer shares in that company to masternode owners for free (but they'd have to disclose their identities of course)
• create a proposal to capitalise that company and post it on Dashwhale
• get enough votes to activate the proposal so that an address owned by the company gets funded
• have the company then invest in startups

However the 'company' still wouldn't really be owned by the network as such. It would be owned by the individuals who happened to be masternode holders as well and they could still choose to sell their shares independently of their masternode collateral (unless there was some kind of binding condition in the terms of ownership, but they would be almost unenforceable because cryptocurrency is a bearer token with no counterparty to endorse ownership).

I'm afraid that's just the other side of the 'decentralised' equation. The DAO cannot own anything because it itself does not have a legal existence.

The Dash DAO and corporate shares are oil and water. They are unmixable and invisible to each other. Parallel universes that are unaware of each other's existences.
Then the law better get its shit together and figure out how to accommodate DAOs before it finds its self replaced by one :p Things like paying dividends and returning loans with interest will become a key component of DAOs at some stage and Dash could potentially set the standard but I'm against anything like that as part of Dash governance, proposals that offer benefits to Dash don't necessarily offer benefits to masternode operators pockets and expecting them to would be a step backwards imo.
 

bhkien

Active Member
Mar 31, 2014
465
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Canada
vietriches.com
I imagine that the companies will issue a kind of token which corresponds with some Dash for each share.

The share holders can use function to vote like we can do with masternode. That can create demand for Dash and make companies become DAOs.
 

stan.distortion

Well-known Member
Oct 30, 2014
913
530
163
I imagine that the companies will issue a kind of token which corresponds with some Dash for each share.

The share holders can use function to vote like we can do with masternode. That can create demand for Dash and make companies become DAOs.
That would make sense, give the ability to create DAOs based on the Dash model but with their own rules and their own tokens linked to Dash. Imo that's pretty much the future of money but it's a long way off and trying to sell the concept would be another of those ideas that came too early, that's not to say it couldn't be built in readiness for that ideas time to come though.
 

akhavr

Active Member
Oct 11, 2014
819
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Just recently we have donated money to two start-ups: To Charlie Shrem Dash card and to TenX VISA card.
No, we did not.

Masternode operators did vote to pay to them from fresh superblock to perform said services. That's not a donation.

I would like to change the "donate" idea into "invest" idea, so that successful start-ups, after they grow big and successful, will pay us dividends, to the Dash network, not to Masternode owners, so we can reinvest the proceeds into more start-ups. This will increase our Dash budget quite a lot faster, rather than via standard coin emission procedure. Additionally it will increase the value of our Dash coins.
You're trying to push a square pig into a round hole.

As mentioned above, by other forum participants, you can't mix the decentralized pseudonymous system (with heavy bias on anonymity) with the existing legal system. A company ("a corporation") is a beast, living in a legal system. It has identified shareholders, identified officers, top management, et cetera, et cetera.

1. To create something like this within an existing legal system, one should establish a legal investment fund and bring Dash as a limited partner. Good luck doing this. At this moment I, as a masternode operator, won't support such proposal without an extensive track record in startup investment ecosystem.

2. Usually investment funds are raised for 10 years. About 2/3 of that timeframe they invest, the rest of the time they collect the exits of the survivors. Per industry statistics (don't have a reference handy, google), if you have 3-4 investments out of 10 to break-even, you've got a good fund. Yes, that means that at least half of fund's investments go to zero. And yes, you can't exit out of the fund before it matures (usually).

2.a. How many MNO's are prepared for 10 year investment cycle?
2.b. How many MNO's are ready for that level of risk?

3. If you're aiming on dropping the existing legal system completely and go ICO, then you get another "small" issue: governance. That means, how you (fund manager) can be sure that the funds investments won't be used on strippers, yachts, etc? If you drop the legal system, you drop the legal enforcement altogether. I have a running experiment on governance system for small projects where the funds are held on multisig and various actions could be performed based on owners votes, but it's still early.

4. If you're going to invest fund purely into the existing ICO's, feel free to do this. To get my investment - see (1), you'd have to show a track record in ICO investment. You may raise Dash Network money by creating a proposal. No special changes required.
 
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camosoul

Grizzled Member
Sep 19, 2014
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Charlie Shrem is not a startup. I think he can speak for himself, but he's not here at the moment. He has a track record of success and experience, and the funds, resources, and contacts to back it up. He very obviously falls into the category of "absolutely can make this happen."

If someone wants to create a "DASH startup foundation" that seeks out worthy causes and has the ability analyse potential for success AND weigh it against value for DASH MNOs as a form of ROI, then submit it in blocks... Could work as an open-ended mutual fund/startup grant concept.

It your idea. If you believe in it, sack up and make it happen. It costs you absolutely nothing to start doing this work. If you screen properly and your startups succeed while also bringing value back to DASH, you'll get funding. But, like so many who have never done anything before, you might have a hard time understanding that rewards come AFTER hard work, not before.

As an entity separate from DASH itself, you would have the power to enter into contracts, guaranteeing DASH branding presence in businesses that accept DASH funds, and the capacity to enforce such. You'll be forced to consider risk/reward, where the direct DAO doesn't have the ability to do any of that. through this advantage, you could provide a level of value feedback that DASH alone cannot provide for itself. Make sure you pick 'em right and it'd be a great idea.

I recently bought a a Hummer H2 from a car dealership via shakepay.co's Shake Blue service. The fairly young salesman I bought it from was very interested in cryptocurrency, but the old-school all crotch, no brains management was utterly clueless and suspicious of the entire process. The deal almost fell through because they were clueless and paranoid. There's definitely a vacuum in the marketplace for a crypto-first car dealership, instead of existing car dealerships accepting crypto; history shows us that such a model doesn't last. Google it. Lots of articles from 2012, 2013 and 2014 about "buy car with bitcoin," but none of those places still do it today... Find a motivated younger person with a clue and you could have a winner. Let DASH help him avoid floorplanning and it's almost a guaranteed win... Almost. Investment is always a gamble. If you want a guaranteed free lunch, go back to stocking canned soup at Kroger.

A hybrid grant/mutual fund concept in which value is paid back in exposure and market cap... DASH Mutual. Shit man, I've damn near done it for you. There's no way MNOs can be expected to micro-manage all that. We don't want it. Be our mutual fund. Show us a return, and keep the details to yourself. There have been several startup proposals that have gotten shot down, which I would have liked to help, but had to vote no based on that not being what DASH does. If you are an organization that brings tangible benefit through managing startup capital so we don't have to, hell yeah.

This is the major problem we have in the DASH budget system. A lot of people who haven't the balls to even try running with the big dogs, think they can present their idea from the porch... Let DASH shoulder all the risks that the proposer hasn't the testicular fortitude to make himself. If you won't bet on your own idea, why would DASH? This high proposal fee is a crude instrument, but it does a reasonable job of separating the men from the boys.
 
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jarroyo

New Member
Oct 15, 2015
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13
Its an interesting idea. The first thing that comes to my mind though is how exactly could the network enforce collecting its ROI?
 

Megahashman

Member
Mar 29, 2017
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Imo, this mental exercise is taking way too much precious time from people who could be thinking about more important things. Like how to increase the value of dash, for example. If someone thinks this is a really good idea, then propose it, and let a vote happen. Then everyone can move on from this ridiculous argument. Worry about making yourselves money by increasing dash value, and stop worrying about making more money for the dao. Because the former will lead to the latter. Simple;)
 

lynx

Active Member
Dec 11, 2015
364
250
133
Its an interesting idea. The first thing that comes to my mind though is how exactly could the network enforce collecting its ROI?
The idea of enforcement can be set aside for now, we already trust the proposal owner to do what he proposes.
 

dashly

Member
Mar 5, 2017
110
44
78
It's a conflict of interest and a bad idea... especially if you see Dash as a future currency. The Federal Reserve is bad enough already... Can you imagine if they said they are now going to print money to invest in businesses? I basically agree with all of Megahashman's points. Let's keep Dash decentralized and collect our ROI by funding projects.

Let's stop trying to figure out ways to line our own pockets and ruin Dash. I'd personally look for greener pastures if something like this were to happen... It would just give Dash a bad (worse) reputation.