The original post was done on July 11th, 2018. It has been cross-posted here to allow for comments. What is the objective of this post? We have agreed with the community that providing transparency into the Dash Core Group budgeting process has value. As promised, this post is another update on the budget proposals Dash Core Group is planning on submitting to the network over the next three budget cycles. These posts will occur at least on a quarterly basis. In combination with the Dash Core Group quarterly reviews this should present a comprehensive perspective on the DCG budget in the near and medium term. What will drive your budget proposal strategy over the next 3 months? Rebuilding our Dash and fiat buffers as well as meeting our contractual obligations (including paying our tax liability, more details on that below). 2Q 2018 was a challenging quarter given the rapid, continued drop in the price of cryptocurrencies, including Dash. This has had a direct effect on Dash Core Group’s budget plans for the future. All of our upcoming expenses have been examined through the lens of what can we do to reduce or avoid spend while still delivering on our objectives. We have: Effectively frozen hiring (with the exception of 3 critical roles) Closely examined and dramatically reduced our planned business development and marketing expenses Put a hold on participating in conferences that we have not already pre-committed to attending Delayed rolling out targeted salary increases Delayed rolling out retention plans for key employees Frozen adding subcontractors to the PEO Cancelled plans to create a separate account to fund an employee training account Even with all of these actions, the reality is that Dash Core Group will need to submit proposals that in aggregate will account for over 50% of the total available funding from the Dash network for the next few months. What are the specific proposals you anticipate posting for the August 2nd, September 2nd and October 2nd budgets? $802,500 for the August 2nd cycle: 1) Core Team Compensation: $600,000 or 2,452.88 Dash for compensation for core team members 2) Taxes: the USD equivalent of 785.00 Dash (at current prices: $171,300) including the Dash proposal reimbursement to cover a portion of the tax-related liability. This specific amount was chosen so that no multi-month proposals would be displaced from the budget (unless a new proposal from this budget cycle pushes one out) 3) Premises: $31,200 or 132.05 Dash for rent For the budget paying out on September 2nd, the following proposal requests will be posted: 1) Core Team Compensation: $600,000 for compensation (including some benefits) for core team members 2) Taxes: $348,700 (which is the balance of taxes due). As mentioned, this second tranche of funding for the tax liability is larger than the first payment because this will allow Dash Core Group to minimize the impact it has on displacing current multi-month proposals that are currently passed by the Dash Network as several large proposals (Fanduel, KuvaCash and BitGo) are in the last month of their multi-month proposals and will free up significant funding space. 3) Legal: $150,000 (to cover monthly run-rate for the quarter as well as engage in a number of planned special projects such as pursuing the SEC no-action letter and finalizing the setup of Dash Ventures) If the price of Dash recovers, DCG may also post proposals related to employee training, conferences & travel (for q4 2018) and infrastructure. For the budget paying out on October 2nd, the following proposal requests will be posted (presented in USD): 1) Core Team Compensation: $600,000 2) Business Development: $400,000 for October 2018 3) Public Relations: $60,000 for Q4 2018 If the price of Dash recovers, DCG may also post proposals related to employee training, conferences & travel (for q4 2018) and infrastructure. Going forward we will pay estimated taxes on a quarterly basis. This is required by the IRS and will prevent a large tax bill due at the end of the fiscal year ending June 30, 2019. This has the side benefit of spreading out the tax requests over a longer period, minimizing the impact each tax proposal has on the Dash Network monthly budget. Please note that for certain non-discretionary accounts we have started building a fiat buffer to prevent DCG operations from being disrupted if the price of Dash continues to drop (e.g. core team compensation, business development). The secondary benefit of creating the buffer in over the last few months is that it allowed us to reduce our tax liability by several hundred thousand dollars. Can you provide more details on the upcoming tax proposal(s)? The following language is verbatim from the tax proposal: During the fiscal year ending June 2018, we had income (Dash distributed to us from the superblock) and we incurred expenses (compensation, invoices, etc.). At the end of June 30, 2018 our balance sheet, at cost, was approximately $1.2mm. Our preliminary tax liability is estimated to be approximately $520,000 for fiscal year 2018 and July through September 2018. This amount is due on September 15th, 2018. We have decided that in order to minimize the disruption to the budget, we will split the tax related proposals unequally between the August 2nd and September 2nd budget. Taxes are not a discretionary expense. If funding is not approved, Dash Core Group will need to divert funding from another account to meet our tax liability. Many in the community have asked why Dash Core Group is structured as a corporation versus a foundation or non-profit. When we initially evaluated what corporate structure Dash Core Group should be organized around, a non-profit seemed to make the most sense. However, in exchange for being tax exempt, those types of organizations have a lot of operational limitations. Our legal team advised us of 2 significant Dash-specific obstacles to this type of structure: 1) the source of all donations or contributions to the foundation would have to be disclosed (we would need to identify masternode owners) and 2) we couldn't pay developers to exclusively work only on the Dash network (we would be prohibited from promoting one specific solution). Both of those factors were show-stoppers and we decided to structure Dash as a corporation. Although Dash Core Group is structured as a corporation, it is not expected to generate much taxable income (i.e., we only draw funding from the network required to fund liabilities and expenses). Over the long term the Dash Core Group tax rate should approach low levels relative to our funding (tax liability will be in the low single digits as a percentage of revenue). This stems from the fact that all Dash in our accounts will eventually be an expense when those funds are spent on specific initiatives. However, in the short-term there is a necessity to hold a certain amount of Dash permanently in each account since we need a buffer to account for expense timing and currency fluctuation risk, as well as hold funds meant to pay future liabilities. It is this buffer that will drive our tax liability going forward. In conclusion We hope this post provided transparency into the Core Team’s budgeting strategy and process. We welcome all constructive feedback and suggestions.