Decision Proposal: Increase Proposal System Flexibility & Efficiency

Mark Mason

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This is a decision proposal to increase the proposal system’s spending limit (i.e., its flexibility) and incentivize increasing the value of funded proposals (i.e., its efficiency). Similar to the visual identity / rebranding proposal from 2018, two proposals are being submitted for evaluation. These two proposals are mutually exclusive; only one may be implemented.

In preparing for this proposal, two alternatives emerged with enough interest and support for network-wide consideration. One option originated from Dash Core Group (DCG), the other from a group of masternode owner/operators (MNOs). The Dash trust protectors (TPs) are submitting both proposal options as a neutral third party.

The primary objective of both proposal system upgrade options is to provide the network with greater flexibility over proposal spending, while better aligning MNO incentives to avoid spending network resources on low-value proposals. The options differ in their approach and the resulting implications. The differences will be detailed in subsequent sections.

Links to live proposals:

[DCG Plan]
-
https://app.dashnexus.org/proposals/decision-vote-improve-proposal-system-dcg-plan/overview
https://www.dashcentral.org/p/decision-vote-improve-proposal-system-dc
[MNO Plan] -
https://app.dashnexus.org/proposals/decision-vote-improve-proposal-system-mno-plan/overview
https://www.dashcentral.org/p/decision-vote-improve-proposal-system-mn

The introduction, proposal process, background as well as the appendix at the end are identical in each of the two proposals, so you will only need to read these sections once. The sections that differentiate the two proposals are the DCG Plan and MNO Plan sections, which are enclosed in [brackets] for emphasis.

This forum thread has been created for community discussion.

Please keep it civil.

Kind regards,

Mark Mason

Dash Trust Protector
 
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Geert

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On June 29 I proposed what is basically the MNO plan to Ryan and he responded with well-thought-out arguments why he thought his idea was better. You can see that exchange here:


At first blush the MNO idea seems to make more sense, but RT's arguments have merit, and I have to assume that he has a better understanding of the overall ecosystem than the average MNO.

I am going to go with the DCG plan.
 

qwizzie

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Disappointing to see that both decision proposals are missing a pre-discussion on Dash forums about the specifics of each proposal, thereby ignoring several requests from Dash community members to do just that prior to launching the decision proposals on the network and also ignoring Dash Core Group own guidelines on how do make a successful proposal.

Run a pre-proposal discussion
Get feedback from the community before you post your proposal to the blockchain. A discussion period of around two weeks will help you find out if someone has proposed something similar in the past, and whether it succeeded or failed. There are pre-proposal channels on the forum and Dash Nation Discord, and Reddit also attracts a lot of views - consider the discussion on these channels to be the research phase of your proposal. Later, you can post a link to the forum discussion when your proposal goes live to show you are including community feedback in your work.
Source : https://www.dash.org/forum/threads/8-steps-to-a-successful-proposal.18377/

I heard that the specifics of these two decision proposals were only circulating on DashTalk Discord and one specific podcast, which makes the research phase / collecting feedback from the Dash community / informing the Dash community in advance, very very limited.
Here are some of those specifics that really should have been discussed during a pre-discussion phase :

The voting and proposal process consists of two phases:

Phase 1 - the two proposal options are evaluated against each other
Phase 2 - the favored option from Phase 1 is evaluated against our current system


In Phase 1 (this phase) you are asked to vote for which option you prefer. Regardless of degree, the option with the most net yes votes will proceed to the next phase. DCG will implement the Phase 2 upgrade option if it exceeds the normal 10% criterion of 10% net yes votes in Phase 2. In the unlikely event the higher ranked proposal exceeds the 10% net yes votes during Phase 1, Phase 2 would not be necessary.
DCG Plan :



This plan also distribute any leftover Dash from Dash Budget to both masternodes and miners (i assume in a 60%/40% ratio)

With our current blockreward allocation scheduled to lead towards 36% Miners / 54% Masternodes / 10% Budget, it is strange to see that
masternodes would need to give up more of their masternode rewards (-6%), then miners (-4%) to get us to 20% Budget.
I would have questioned the rationale behind this, during a pre-discussion phase.


MNO Plan :



With our current blockreward allocation scheduled to lead towards 36% Miners / 54% Masternodes / 10% Budget, the actual change would be considerable,
Miners will be kept at 36% (no change), Masternodes could get as low as 44% (-10%), so that Budget can expand to 20%, Leftover Dash from the budget will go to Dash masternodes.


What i am missing in these two decision proposals is simply keeping our blockreward allocation at 36% Miners / 54% Masternodes / 10% Budget and just focus on the leftover funding of that 10% budget. That should have been added as third decision proposal option. Also something that should have been discussed in a pre-discussion phase. Which makes me wonder why this pre-discussion proposal was discouraged so forcefully : https://www.dash.org/forum/threads/mno-incentives.50836/#post-223867 It is actually the only pre-discussion proposal that keeps Dash at 36% Miners / 54% Masternodes / 10% Budget and only focus on distributing the leftover Dash of that 10%.

I will be forced to vote down both DCG Plan & the MNO plan, as they both allow for extending our budget to 20%.
Extending the budget from 10% to anything higher, is a big NO for me.


My personal opinion :

More then 10% budget --> More selling of Dash on the market by those projects that receive Dash funding --> More Sell Pressure & Reduced Dash Store of Value (by making masternodes less attractive to invest in). It directly undermines our whole blockreward allocation change.

Also there are large masternode-owning entities active on our network, i don't think it is wise to give them influence not only over budget proposals, but over masternode blockrewards as well, specially if they can influence it negatively (making the masternode rewards lower, either by -6% or by -10%).


What i find even more disturbing then not having the specifics discussed during a pre-discussion phase, is that Dash Core Group failed to keep insight working correctly, which means Dash Central is not showing the two decision proposals at the moment, and discussion / voting on these two discussion proposals on Dash Central is impossible right now.

So i am giving penalty points to those that thought that keeping a pre-discussion on the specifics of each decision proposal on all Dash forums was not necessary (you know who you are) and i am severly condemning how limited the discussion currently is due to Dash Central not showing these two decision proposals, which i assume is caused by Insight explorer crashing pretty much every day. Keeping Insight up and runnning and working correctly is the responsibility of Dash Core Group.

There is a good way of doing decision proposals and there is a bad way of doing decision proposals, this is the bad way.
 
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kot

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which i assume is caused by Insight explorer crashing pretty much every day. Keeping Insight up and runnning and working correctly is the responsibility of Dash Core Group.
May I know why did you make this assumption?
Based on my monitoring tools, the Insight is running well, without any downtime for more than 3 weeks.
Screenshot 2020-11-02 at 14.12.06.png
 

qwizzie

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May I know why did you make this assumption?
Based on my monitoring tools, the Insight is running well, without any downtime for more than 3 weeks.
View attachment 10392
See comments from rango in Dash Central (shoutbox)

(4 days ago) @qwizzie I have to restart insight manually after crashing until the issue has been fixed by the core team. So sometimes dataflow is stuck.
(8 days ago) Insight crashed again. Restarted it. Hope the core dev team will fix insight soon.

There are a lot of crashes of insight lately, and a lingering issue that does not seems fixed yet. That fix needs to come from DCG.
rango just announced he restarted insight, and the decision proposals are visible there too now. We just need to have the lingering issue fixed, so rango does not need to restart insight manually every time.
 
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kot

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@qwizzie
I will double-check, but I have no idea how rango would restart our public Insight instances. He has no access to our infrastructure.
I don't think, we are talking about the same Insight instance.

We have just checked the logs and Insight on our side is very stable. During the last 24 hours, we have had only 39 failed requests out of 2.92 million.
I find it a good service (and heavily used at the same time).

Just FYI - we are planning to upgrade Insight in the future, however, all of our developers work on the Platform/DashPay release. So the upgrades and new coding won't happen very soon.
 
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qwizzie

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@qwizzie
I will double-check, but I have no idea how rango would restart our public Insight instances. He has no access to our infrastructure.
I don't think, we are talking about the same Insight instance.

We have just checked the logs and Insight on our side is very stable. During the last 24 hours, we have had only 39 failed requests out of 2.92 million.
I find it a good service (and heavily used at the same time).

Just FYI - we are planning to upgrade Insight in the future, however, all of our developers work on the Platform/DashPay release. So the upgrades and new coding won't happen very soon.
Maybe best to contact rango directly and see what the issue is exactly.
 

stan.distortion

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How come either one or the other of these will be implemented (or am I reading that wrong)? This is as bad as the 2 party system in the US, there's nothing right or just about a choice between 2 evils. On the one hand DCG want to give MNs the ability to grant themselves higher reward payouts and on the other a group of MNOs want the ability to grant themselves even higher payouts.

It's hard to believe the motivation for that aspect of these proposals is anything other than greed. I know that's an excessively narrow point of view but it's none the less an accurate one, both of these proposals put MNs in a position to grant themselves more income. I don't want to believe that's DCGs motive but I've no idea who this group of MNOs are because this is the first time they've been mentioned in the Dash social media communities I'm part of (and their lack of input from the wider community before suggesting these changes doesn't encourage confidence).

Just to be clear, this isn't sour grapes from someone who can't get a bigger slice of the pie. I'm a MNO, I'd be able to vote against the majority of proposals in the hope of making more income. Can I resist that temptation? I'd rather not have that temptation put in front of me.
 
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GrandMasterDash

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"the problem with the existing system is that MNOs bear no personal immediate cost for funding proposals"


Unfortunately, both these plans have the same flaw; they amplify MNO legal liability. Both thees proposals want MNO's to more directly feel the consequences of their actions - which ordinarily is a good thing - but if either of these proposals pass, a court might argue that those financial incentives make the MNO liable and complicit in any nefarious activity. A previous Dash Iran proposal is a case in point; the proposal failed because some MNOs felt they might break US sanction laws. With greater financial incentives, a court might ask, "was he / she thorough in their due diligence", or "was he / she financially benefiting / funding fraudulent activity?" Of course, MNOs always bear some risk but it's a whole new game when there's a more "personal immediate cost".

The masternode network must protect it's status as globally impartial and it's distribution not skewed by the nationality and laws of it's MNOs. Currently, MNO IP addresses are registered on the dash blockchain, which in all likelihood means 99% of all MNOs have been identified. If a technical solution was found to keep MNOs anonymous, then I might take a second look at these proposals.

Also, I wonder if DCG's proposal unwittingly incentivizes miners to run masternodes, which is something I would be against. I mean, you can't stop them being MNO's but we shouldn't be giving them incentives because the two networks (miners and masternodes) need to be two completely separately functioning networks, serving two different functions (mining and reputation).
 

Ryan Taylor

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What i am missing in these two decision proposals is simply keeping our blockreward allocation at 36% Miners / 54% Masternodes / 10% Budget and just focus on the leftover funding of that 10% budget. That should have been added as third decision proposal option. Also something that should have been discussed in a pre-discussion phase. Which makes me wonder why this pre-discussion proposal was discouraged so forcefully : https://www.dash.org/forum/threads/mno-incentives.50836/#post-223867 It is actually the only pre-discussion proposal that keeps Dash at 36% Miners / 54% Masternodes / 10% Budget and only focus on distributing the leftover Dash of that 10%.
This option was discussed and actually included in the polls we held in the Discord MNO channel. While this approach provided admittedly informal data, the overwhelming majority of votes were to increase or even remove the cap entirely. Had there been any meaningful support for this option, we certainly would have explored it further, but the data seemed to indicate that option likely had very few supporters.

We held a series of AMAs, video chats, and interviews with the community through a variety of channels as well. Throughout those discussions, the overwhelming share of comments were supportive of expansion as well.

Had there been any meaningful contingent of MNOs looking to retain the 10% allocation, we believe we would have encountered that feedback at some point during the process. Outside of one or two comments, almost all of the feedback favored expansion of the maximum.

More then 10% budget --> More selling of Dash on the market by those projects that receive Dash funding --> More Sell Pressure & Reducing Dash Store of Value (by making masternodes less attractive to invest in). It directly undermines our whole blockreward allocation change.
While I appreciate the point about direct price impact of proposals, appling this logic alone would mean that we should eliminate all proposal funding, including the existing 10% as well... but focusing exclusively on the cost side ignores the benefits the proposal system brings to the network. Yes, it is true that the vast majority of budget proposal funding tends to be sold to pay for expenses. The question is whether those expenditures bring more value to the network than they cost. A good proposal system will therefore align decisions around both the benefits and the cost of each proposal. Right now, there is no direct cost to MNOs approving a budget request. Introducing a cost should reduce wasteful proposals, which is necessary to avoid waste if the maximum allocation is to be expanded.

So i am giving penalty points to those that thought that keeping a pre-discussion on the specifics of each decision proposal on all Dash forums was not necessary (you know who you are) and i am severly condemning how limited the discussion currently is due to Dash Central not showing these two decision proposals, which i assume is caused by Insight explorer crashing pretty much every day. Keeping Insight up and runnning and working correctly is the responsibility of Dash Core Group.

There is a good way of doing decision proposals and there is a bad way of doing decision proposals, this is the bad way.
The two proposals before the network now are the two that emerged with the highest levels of support from all the discussions we held over many many months. In a sense, the two proposals represent the final stages of a "pre-proposal discussion" that has been ongoing for nearly a year. While there are plenty of other ideas that have emerged from the many debates we've had up to this point, these are the ideas that have emerged with the greatest levels of support. There will undoubtedly be a LOT of active debate over the coming month. The final proposal will be posted to the network in the December cycle. I view these two decisions proposals are effectively pre-proposal discussions and votes in their own right.
 
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qwizzie

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This option was discussed and actually included in the polls we held in the Discord MNO channel. While this approach provided admittedly informal data, the overwhelming majority of votes were to increase or even remove the cap entirely. Had there been any meaningful support for this option, we certainly would have explored it further, but the data seemed to indicate that option likely had very few supporters.
I guess we will find out how much support extending the budget to 20% really has, and if by limiting the discussion and the specifics of your DCG plan option to the Discord MNO channel , did not lead to tunnel vision with regards to interpreting received data (from one single source).

And no, the specifics of these two decision proposals were not discussed on any other other forum then Discord. The discussions on other forums were from many months ago, lacking any specifics. Hard to discuss something properly that is missing specifics. Unless you visit the DashTalk Discord channel frequently i guess.
 
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Ryan Taylor

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How come either one or the other of these will be implemented (or am I reading that wrong)? This is as bad as the 2 party system in the US, there's nothing right or just about a choice between 2 evils. On the one hand DCG want to give MNs the ability to grant themselves higher reward payouts and on the other a group of MNOs want the ability to grant themselves even higher payouts.

It's hard to believe the motivation for that aspect of these proposals is anything other than greed. I know that's an excessively narrow point of view but it's none the less an accurate one, both of these proposals put MNs in a position to grant themselves more income. I don't want to believe that's DCGs motive but I've no idea who this group of MNOs are because this is the first time they've been mentioned in the Dash social media communities I'm part of (and their lack of input from the wider community before suggesting these changes doesn't encourage confidence).

Just to be clear, this isn't sour grapes from someone who can't get a bigger slice of the pie. I'm a MNO, I'd be able to vote against the majority of proposals in the hope of making more income. Can I resist that temptation? I'd rather not have that temptation put in front of me.
To clarify the intent on the part of DCG's proposed solution:
1) It is unlikely that the MNOs could increase their income very much - at least not without jeopardizing their collateral. The majority of the 10% of the budget approved today is DCG, and I believe it is safe to say the vast majority of MNOs would not vote to defund development for about 1 extra Dash per month per masternode.
2) DCG's motivation is instead to prevent wasteful spending on low-value proposals, which is in everyone's best interest (except obviously for the owners of low-value proposals).
3) If anything, introducing a cost to MNOs of approving DCG's proposals would have the effect of making it more difficult for our own proposals to gain approval. But that is good governance. We proposed the change because it is good for the network's efficiency.

I do believe that MNOs are more rational than to react by defunding good proposals. However, that risk is non-zero, so we do advocate moving cautiously. This is one of the reasons we don't advocate to burden 100% of the cost of budget approvals to the MNOs, but instead advocate sharing the costs with the miners (who also benefit from value creating proposals).

Speaking for myself as an MNO... I do plan to continue funding high-quality proposals, even if I could "make more" defunding everything. It would be irrational for me to do otherwise.
 

Ryan Taylor

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I guess we will find out how much support extending the budget to 20% really has, and if by limiting the discussion and the specifics of your DCG plan option to the Discord MNO channel , did not lead to tunnel vision with regards to interpreting received data (from one single source).
As I said, we did not gather input from a single source. We gathered initial feedback on the Forums after the presentation last December, held several AMAs, videoconferences, interviews, chats, consulted with governance and finance experts, and held direct discussions with whales and our largest miners to understand what each group would be willing to support. Believe me, the proposal is not based on a poll in Discord, or any one discussion or interaction. It is the result of a lot of work and input from many different sources.
 
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qwizzie

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As I said, we did not gather input from a single source. We gathered initial feedback on the Forums after the presentation last December, held several AMAs, videoconferences, interviews, chats, consulted with governance and finance experts, and held direct discussions with whales and our largest miners to understand what each group would be willing to support. Believe me, the proposal is not based on a poll in Discord, or any one discussion or interaction. It is the result of a lot of work and input from many different sources.
I am not talking about initial feedback, i am talking about discussions about the specifics on your proposal. Those discussions were only done on Discord.
That should have been done through pre-discussion on the Dash forums. I am not the only one thinking that. You choose to ignore it, fine. Expect some backlash then.

Same goes for the MNO Plan by the way. There were also masternode operators that choose to ignore requests to do a pre-discussion phase, before releasing the MNO Plan to the network.
 
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Ryan Taylor

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I am not talking about initial feedback, i am talking about discussions about the specifics on your proposal. Those discussions were only done on Discord.
That should have been done through pre-discussion on the Dash forums.
To clarify my sentence, almost all of the activities I referenced - except the initial feedback in the Forum and the expert input we gathered during design itself - were done AFTER the proposed solution was presented to the network in June. The word "initial" referred only to the Forum posts, not the entire list of interactions.
 
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stan.distortion

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To clarify the intent on the part of DCG's proposed solution:
1) It is unlikely that the MNOs could increase their income very much - at least not without jeopardizing their collateral. The majority of the 10% of the budget approved today is DCG, and I believe it is safe to say the vast majority of MNOs would not vote to defund development for about 1 extra Dash per month per masternode.
2) DCG's motivation is instead to prevent wasteful spending on low-value proposals, which is in everyone's best interest (except obviously for the owners of low-value proposals).
3) If anything, introducing a cost to MNOs of approving DCG's proposals would have the effect of making it more difficult for our own proposals to gain approval. But that is good governance. We proposed the change because it is good for the network's efficiency.
After reading through some of the comments here (especially the point on potential changes to MNs legal liabilities), I'm more inclined to think this is poorly thought out governance. If the aim is to improve the quality of approved proposals then that issue should be addressed directly, what's proposed here is little more than throwing money in it's general direction.

"Poorly thought out" may sound like overly harsh criticism but I believe it's justifiably harsh. An example for context, here in Ireland the Taoiseach (equivalent to UK Prime Minister) is paid a higher salary than the US President. That's what happens when you let people decide how much they pay themselves and that's what's being proposed here, it's like giving the fox the keys to the henhouse.

I do believe that MNOs are more rational than to react by defunding good proposals. However, that risk is non-zero, so we do advocate moving cautiously. This is one of the reasons we don't advocate to burden 100% of the cost of budget approvals to the MNOs, but instead advocate sharing the costs with the miners (who also benefit from value creating proposals).

Speaking for myself as an MNO... I do plan to continue funding high-quality proposals, even if I could "make more" defunding everything. It would be irrational for me to do otherwise.
For now I agree, the majority of MNs cast votes based on what's best for the whole Dash network but this decision isn't only about today. The result of these proposals could effect our governance for years, maybe decades and there's absolutely no guarantee MNOs will have the same level of integrity indefinitely.

Take any fortune 500 company, what would happen if investors where given the ability to decide how to spend the companies budget? Shareholders would award themselves bonuses until those companies where drained dry, given enough time every one of those companies would be pillaged into oblivion.
 

rion

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How come either one or the other of these will be implemented (or am I reading that wrong)? This is as bad as the 2 party system in the US, there's nothing right or just about a choice between 2 evils. On the one hand DCG want to give MNs the ability to grant themselves higher reward payouts and on the other a group of MNOs want the ability to grant themselves even higher payouts.
The text says: "only one may be implemented". That just means that either of the two, but not both. In addition, it's possible for neither to be implemented. See the Process section for details.

It's hard to believe the motivation for that aspect of these proposals is anything other than greed. I know that's an excessively narrow point of view but it's none the less an accurate one, both of these proposals put MNs in a position to grant themselves more income. I don't want to believe that's DCGs motive but I've no idea who this group of MNOs are because this is the first time they've been mentioned in the Dash social media communities I'm part of (and their lack of input from the wider community before suggesting these changes doesn't encourage confidence).
The MNO Plan actually puts MNs in a position to grant themselves less income (44%) if they fund the full 20% to proposals. The motivation for both of these proposals is stated clearly. Whether you believe it is up to you I suppose. The MNOs sponsoring the proposal are given in the proposal text. We simply wanted to give all MNOs a second option, rather than DCG's one option. I agree that very few people if any will get exactly what they want, but we wanted to at least double the options.
 
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rion

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Unfortunately, both these plans have the same flaw; they amplify MNO legal liability. Both thees proposals want MNO's to more directly feel the consequences of their actions - which ordinarily is a good thing - but if either of these proposals pass, a court might argue that those financial incentives make the MNO liable and complicit in any nefarious activity.
I can't speak to the legal liability issue, as that's not my specialty. But at least with the MNO Plan we might be able to design it such that individual MNOs could direct their portion of the unused treasury to either some known charity address or even to some "null" address, i.e. an MNO could choose to not accept it, effectively maintaining the status quo for himself, and eliminating any personal liability of the change.
 
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onetime

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Thank you to both proposals for offering good ideas to benefit Dash. Right now I favor DCG's plan, but I'd like some of the reasoning in both plans to be clarified. Here are all my thoughts.

It is right for us to make changes now. Implementing Chain Locks fundamentally changed the amount the network needs to spend on mining security. It therefore makes economic sense to now optimize block reward allocations differently according to the interests of the network, since we have the governance mechanism for our network to agree to make these changes in a way that benefits Dash's market value and interests going forward. The first step has already been approved and will go into effect soon with 0.16, and now we're deciding what the optimal marginal use of block reward funds should be going forward.

I think it's important, once we make this major fundamental change to how the monetary supply is created, for it to be made permanent and set in stone, so the network does not intend to alter it anymore unless an emergency comes along. Even though Dash is focused on a lot of other network features as a user-friendly payments coin and developer-friendly platform, I think investors with large wealth will value Dash a lot more if it's still seen as a hard money store of value that will not be frequently manipulated by its governing masternode owners. Whatever we can do to make it clear to the public that Dash is a reliable, predicable, and unbreakable coin with optimally configured monetary supply would be good.

On that note, I like how Bitcoin's 21 million total supply is seen as a hard amount that is always known, permanent and certain for all time. It's important that Dash is seen to be hard money just as much as Bitcoin is. Since we're going to now change Dash's total future supply to a fixed amount, I'm wondering if perhaps we should consider making the maximum a round number of exactly 19 million. Doing that might have several benefits, such as making explanations and calculations easy for newbs to understand. Would this even be possible, and would it make sense to consider?


So, how should we change the block reward allocation?

First we must guarantee that we always have 1. sufficient continuously running mining security required to always be impervious to attack, and 2. a robust amount of masternodes always running. (To spend more on mining than the minimum necessary for continuous impervious security would probably be sub-optimal.)

Then, maximize spending on +ev proposals that are worth it to the network while not overspending on any -ev proposals, by appropriately incentivizing MNO proposal costs in proportion to their share of benefit the network will gain from passing +ev proposals.

After that, the question is how to allocate the remaining block reward.

The "MNO Decision Proposal", which assumes 36% is always correct for miners, recommends paying the entirety of remaining block reward funds to masternodes. So... do they claim that 36% is exactly the optimal minimum fixed amount that always needs to be spent on mining to ensure satisfactory security without overspending, regardless of Dash's price movements? Or... do they worry that if it were to be a lower portion going to miners, then maybe miners would react by refusing to implement these changes quickly, and might even hold the network hostage by delaying? It would not be in miners' interests to do that because stalling would only diminish the value of the Dash they are mining. Is this a factor?

So I ask, why would we ever pay more than the minimum necessary for satisfactory security? Is exactly 36%, 32%, or a fluctuating amount needed? Is it subjective, or can we agree upon a calculated amount?

I would like DCG to please give economic reasons for ever paying above the minimum necessary to miners, who typically sell most of their proceeds immediately. Is miner noncooperation a worry?

"Perhaps counterintuitively, miners benefit from an approach that varies the miner reward."

Wouldn't fluctuating miner payments necessarily be sometimes overpaying them? Does that make economic sense? During times when the price of Dash falls, it seems best to reduce miners' rewards to the minimum necessary so there will be less selling. But when the Dash price goes high, why not also keep miners' rewards down to the minimum necessary then? Isn't maximizing Dash's value always a higher priority goal than trying to stabilize price down to a lower value?

It makes sense to align a masternode's incentive cost of approving a proposal with the masternode's share of benefit to the entire network. But if by doing that then there is extra, why pay the extra to miners? Have you considered an alternative plan of aligning incentives appropriately to masternodes, having minimum necessary fixed miner rewards, and then the hypothetical unspent extra Dash not be created?

It could work like this. A calculated fixed minimum necessary amount, for example 36% goes to miners. Then masternodes get a guaranteed 44% plus 3/5ths of whatever is left over from the 20% capped for treasury proposals. (So MNs get between 44% and 56%) And, the remaining extra 2/5ths of unspent treasury just never gets created. (Between 0% and 8% never even gets created, depending on how much of treasury is spent.) It's a bit more complicated, but is that a compromise both sides might consider? In that case total max supply would still be an uncertain amount, so would that be a problem? Maybe now it's too late to consider a third option. But did you think of this and rule it out?

I hope the DCG, MNOs and the Dash community will think through all these ideas, find the best solution, and agree to implement a permanent plan that is optimal for the future of Dash.


In the future, if you take a poll of MNO sentiment that you're going to refer to, please at least put some basic information about it on Twitter or a youtube video somewhere for other busy MNOs to know about it.
 
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GrandMasterDash

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Thought...

1. Keep the new v16 system but,
2. Expand the treasury to 15% (fixed), and
3. Reduce miner and masternode rewards by 5% each, not created.

In other words, expand the treasury and make dash more scarce without rewarding anyone. The market would love it because we voted to give ourselves a pay cut while making dash more scarce.

This doesn't incentivize MNOs to make better decisions, they just need to make one good decision to throttle supply.

If anyone wants to see this as a proposal, hit Like.
 
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stan.distortion

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The text says: "only one may be implemented". That just means that either of the two, but not both. In addition, it's possible for neither to be implemented. See the Process section for details.


The MNO Plan actually puts MNs in a position to grant themselves less income (44%) if they fund the full 20% to proposals. The motivation for both of these proposals is stated clearly. Whether you believe it is up to you I suppose. The MNOs sponsoring the proposal are given in the proposal text. We simply wanted to give all MNOs a second option, rather than DCG's one option. I agree that very few people if any will get exactly what they want, but we wanted to at least double the options.
It's appears to double the options but it doesn't, not on the most significant and imo dangerous point. As things are MNs are rewarded for voting in the best interests of the whole network, they only get the benefits if every Dash user gets the benefits. Both of these proposals allow MNs to put personal gain ahead of the networks best interests and I can't understand how that can be considered a step forward, the risk seems far greater than any potential reward.

It also sets a precedent for submitted proposals. So far rewarding MNs directly has been unanimously rejected, Charlie Shrem suggested paying part of the company profits directly to MNs in his proposal and that aspect was shot down in flames but these changes would encourage exactly that, "reject my proposal and you'll get the amount I'm asking, accept my proposal and I'll pay you more". That's no different to buying votes and we can't just dismiss it with "that will never happen", it's already happened and it will happen again. The aim of these changes is to improve the quality of approved proposals but the result could be emptier promises.

If you want to improve the quality of accepted proposals then address that point directly, not indirectly with a major change that could do far more harm than good. This isn't a new problem, it's existed almost as long commerce has existed and so have ways of addressing it. Paying 50% up front and 50% on completion is one example, a second vote to approve final payment is a far less drastic change and cuts the problem in half, if a proposal fails to deliver it only gets half the payment.

That's just one example and it was already mentioned in the original discussion on how governance should be implemented, the fact that thread hasn't been resurrected during the discussion on these changes should be enough to make it clear they haven't been given enough consideration. The governance system was implemented in its most basic form, keep it simple. That thread already has countless points for tweaks and fine tuning with the benefit of the hindsight we now have. We're in no position to make such major changes to the governance system without going over the points covered in its original design:
 
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qwizzie

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I feel like a lot of different views from masternode operators on how to change our budget system are only now coming to the surface. I feel the reason why they only now come to the surface, is because we were missing out on the specifics of each decision proposal.

This shows to me that skipping the pre-discussion phase, where the specifics of each decision proposal could have been discussed and the Dash community could have been informed in advance about these specifics, in the end undermined the communication with the Dash community.

I don't agree with Ryan Taylor that the discussions that are taking place now, during a time the two decision proposals are already launched and active on our network, can somehow serve as pre-discussion.
 

Geert

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What I don't understand is why did the MNOs who fashioned this alternate plan not discuss this initiative anywhere? Why was it done in secret? The first I heard of it was when both proposals were published.
 

Ryan Taylor

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Both of these proposals allow MNs to put personal gain ahead of the networks best interests and I can't understand how that can be considered a step forward, the risk seems far greater than any potential reward.
I understand and appreciate your point of view on this. One angle of looking at it is that the MNOs could enrich themselves with "personal gain" by rejecting good proposals, just as you said. Another angle is that by introducing an incentive to not spend, MNOs are less likely to fully spend a treasury that they may not think of as having a real cost. Both risks exist. To make the best decision, one needs to consider both behaviors are potentially real.

Given the MNOs must have 1,000 Dash collateral, I believe it is unlikely they would starve good projects for a short-term gain. Killing off the projects supporting Dash would clearly jeopardize the value of their collateral. The DCG plan limits the size of the "reward" or "approval penalty" (depending on your point of view) resulting from the approval of a proposal to protect against MNOs becoming stingy to the point that they damage the network's future. We want enough incentives to cause MNOs to think before hitting the "yes" button (especially if the proposal system expands), but not so much that the ecosystem surrounding Dash is killed. Hope that clarifies.
 
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qwizzie

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What I don't understand is why did the MNOs who fashioned this alternate plan not discuss this initiative anywhere? Why was it done in secret? The first I heard of it was when both proposals were published.
This was literally the first time when i heard about it :

www.reddit.com/r/dashpay/comments/jgvph2/mno_incentives/

and

https://www.dash.org/forum/threads/mno-incentives.50836/#post-223867 (see comment xkcd)

That was on the 24th of October 2020, very recent. In a pre-discussion thread of forro68 about MNO Incentives. Really caught me off guard.
The DashPay Reddit thread has more details behind the 'secrecy'.

In the end (after launch on the network) it turned out the MNO Plan had very little to do with forro68 pre-discussion thread. forro68 was just discussing the leftover budget, not an increase in budget to 20%.

I think it even disrupted the pre-discussion on just the leftover budget, to a degree.
 
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Ryan Taylor

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If you want to improve the quality of accepted proposals then address that point directly, not indirectly with a major change that could do far more harm than good. This isn't a new problem, it's existed almost as long commerce has existed and so have ways of addressing it. Paying 50% up front and 50% on completion is one example, a second vote to approve final payment is a far less drastic change and cuts the problem in half, if a proposal fails to deliver it only gets half the payment.

That's just one example and it was already mentioned in the original discussion on how governance should be implemented, the fact that thread hasn't been resurrected during the discussion on these changes should be enough to make it clear they haven't been given enough consideration.
To be clear, there is nothing about this proposed change that would prevent other ideas like the one you raise from being implemented. We do plan to continue having a small share of development devoted to governance improvements. Our governance works fairly well, but it is far from perfect.

I agree with you that some kind of built-in escrow or staging of payments would be a great feature to add. This could potentially be done using P2SH in combination with masternode quorums and a payment release voting mechanism. It would require a major effort in terms of the share of a major release it would require.

We have something like this on our own backlog of potential improvements. I do think this would be relatively highly ranked for work after the current set of improvements we have already slated for the next couple of major releases.
 
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Geert

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If at some point one of these proposals is the clear winner, I hope that the proponents of the loser switch their votes so that we can pass one of these proposals this cycle. I am anxious to get to the next governance change discussion, which involves masternode voting.
 

rion

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I'm wondering if perhaps we should consider making the maximum a round number of exactly 19 million. Doing that might have several benefits, such as making explanations and calculations easy for newbs to understand. Would this even be possible, and would it make sense to consider?
I think that's a good idea for a future proposal. The market favors simplicity, and it's certainly possible.

The "MNO Decision Proposal", which assumes 36% is always correct for miners, recommends paying the entirety of remaining block reward funds to masternodes. So... do they claim that 36% is exactly the optimal minimum fixed amount that always needs to be spent on mining to ensure satisfactory security without overspending, regardless of Dash's price movements? Or... do they worry that if it were to be a lower portion going to miners, then maybe miners would react by refusing to implement these changes quickly, and might even hold the network hostage by delaying? It would not be in miners' interests to do that because stalling would only diminish the value of the Dash they are mining. Is this a factor?

So I ask, why would we ever pay more than the minimum necessary for satisfactory security? Is exactly 36%, 32%, or a fluctuating amount needed? Is it subjective, or can we agree upon a calculated amount?
MNO Plan advocates aren't assuming 36% is exactly optimal. It was a compromise based on several constraints and considerations:
  1. We needed to respect the recently-approved reallocation proposal, which meant making the 2025 end-state value between 32% and 40%.
  2. Many of us felt that 32% was optimal within that constraint since DCG's engineers implicitly acknowledged that it provided (more than) enough security.
  3. We recognized that some people (including miners themselves) would think that 32% would be "unfair" to miners, some wanting miners to get 40%.
So ultimately 36% was our balanced middle ground. The 36% miner allocation can be changed down the road. This would be very straight-forward for the MNO Plan after the 4.5 year transition period, possibly as simply as changing one constant in the code.

We recommend a fixed mining allocation (with respect to proposals) because security needs do not change from month to month. A variable mining allocation neither increases network security, nor is it economically sound. It might be attractive to large mining pool operators who find it in their interest to outcompete their slower-moving and less savvy competition, but that doesn't make our network more secure; it probably yields lower mining security because it could increase mining centralization, and as stated in section 4.1 of the MNO proposal, it certainly reduces overall security by reducing non-mining security.

I'm assuming the rest of your comments and questions were directed at DCG (if not, please restate it). I appreciated your thoughtful post. Thanks for giving us a chance to clarify the MNO Plan.
 
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rion

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If anyone wants to see this as a proposal, hit Like.
I don't personally agree with your whole statement there, but I support having more options. There are two challenges though:
  1. You need DCG to agree to implement it if it passed (like they have explicitly done for the MNO Plan).
  2. It's complex to vote on more than two mutually exclusive options with the system we have.
That's why we (the MNO Plan) did as much work with Ryan/DCG as possible internally, so that we could come up with two options for this very important change that the network could vote on. I realize that the two options still don't give everyone what they want, but I consider it better than what was going to happen (just having one take-it-or-leave-it proposal by DCG). Even two relatively similar options is somewhat tricky, but I support as many options being proposed as MNOs can reasonably evaluate.
 
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