Masternodes are 60% of holdings

What is the optimal % of Dash being locked up in masternodes?

  • 10%

    Votes: 1 3.4%
  • 20%

    Votes: 0 0.0%
  • 30%

    Votes: 0 0.0%
  • 40%

    Votes: 1 3.4%
  • 50%

    Votes: 4 13.8%
  • 60%

    Votes: 8 27.6%
  • 70%

    Votes: 8 27.6%
  • 80%

    Votes: 2 6.9%
  • 90%

    Votes: 0 0.0%
  • Other...

    Votes: 5 17.2%

  • Total voters
    29

Willy Woo

New Member
Aug 23, 2016
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Here's my interesting number of the week:

60.5% of Dash supply is locked up in masternodes.

Is this a good number?

100% = Dash is a store of value, not used as payments

0% = network is dead. No nodes.

60% = majority of holders are long term bullish as a store of value and are actively engaging in it’s governance. (tested by action, not sentiment)

What would be the optimal healthy range?
 

camosoul

Grizzled Member
Sep 19, 2014
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Potato(e).

If the load on masternode metrics requires more nodes, make them 500 DASH each, and pay them half as much to double the network.

This wonks on the idea that there is a real metric in this notion of percentage.

Therefore, the answer is potato(e).
 

Willy Woo

New Member
Aug 23, 2016
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This is about money supply held in the node collateral banks, not payout and node count.

If I rephrase by flipping it: "What's the optimal amount of money supply for circulation within the payments network vs the amount locked away for running and governing the system?"
 
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demo

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Here's my interesting number of the week:

60.5% of Dash supply is locked up in masternodes.

Is this a good number?

100% = Dash is a store of value, not used as payments

0% = network is dead. No nodes.

60% = majority of holders are long term bullish as a store of value and are actively engaging in it’s governance. (tested by action, not sentiment)

What would be the optimal healthy range?
I am glad when the new generation votes with numbers! :)

But there is a wrong in the setup of your poll.

Not to mention the number granularity (I do not blame you for that, it is the fault of the forum administrator who prohibits voting with numbers.), there are also other opinions outside the context of our thinking, so we have to respect them and let them express themselves into the results.

So could you please add the option "other" below the numerical options, into your poll?
 
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Willy Woo

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Aug 23, 2016
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Hmmm... I'm thinking the answer is variable as time progresses... in early stages you want more in masternodes as you want an engaged community to govern and push the platform forward, the halo effect is an increase in price and marketcap which also attracts more people in. In later stages when the adoption is taking off, there's less need for all hands on deck and more of the dash supply used as working fluid in the network makes sense as this would reduce volatility which is important to create a useful store of value.
 

fernando

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You say it yourself in the first post: with 100% there are no payments but we are a store of value, so it depends on what you want Dash to be.

Also you should consider also the willingness of non masternode holders to spend. If that money doesn't move, there are no payments either, even if we are at 10% hold in MNs. Velocity of movement is important too.

So there is no answer to your question.
 

Dworf

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Jun 25, 2016
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where is the point?

most Bitcoins are hold in cold wallets

the price of masternodes together with the incentive structure will regulate the market
 
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demo

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where is the point?

most Bitcoins are hold in cold wallets

the price of masternodes together with the incentive structure will regulate the market


Unfortunately, the price of masternodes is currently fixed to 1000 dash. And their number increases. If this continues, it will lead to a situation where 100% of the dash will be locked by the masternodes. Which means that dash will become a store of value. And something which is a store of value, is not digital cash, because the value of money exists only when you make transactions with it. The more transactions an object has, the more can be considered as money.

So either you have to reduce the price of the masternodes to a number below 1000 dash (if you are a proponent of this solution, why dont you make a proposal into the budget about it?), or set a maximum number of allowed masternodes to exist. Or alternatively set the maximum locked (by the masternodes) dash money, as this vote-proposition suggests. The three solutions are mathematically equivalent. Maybe there is also a fourth solution , or a fifth.

So among those mathematically equivalent proposition, you have to choose the one with the less disadvantages, because all solutions solve the problem, but some of them may cause other problems in other fields.

I am a proponent of the solution proposed in this thread, by this young generation dasher, who is smart enough not only to propose clever solutions like this one, but also smart enough to vote using numbers. Well done young, demo congratulates you.
 
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GrandMasterDash

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Jul 12, 2015
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Unfortunately, the price of masternodes is currently fixed to 1000 dash. And their number increases. If this continues, it will lead to a situation where 100% of the dash will be locked by the masternodes. Which means that dash will become a store of value. And something which is a store of value, is not digital cash, because the value of money exists only when you make transactions with it. The more transactions an object has, the more can be considered as money.

So either you have to reduce the price of the masternodes to a number below 1000 dash (if you are a proponent of this solution, why dont you make a proposal into the budget about it?), or set a maximum number of allowed masternodes to exit. Or alternatively set the maximum locked by the masternodes dash money, as this vote-proposition sugests. The three solutions are mathematically equivalent. Maybe there is also a fourth solution , or a fifth. So among those mathematically equivalent proposition, you have to choose the one with the less disadvantages, because all solutions solve the problem, but some of them may cause other problems in other fields.
Actually, I think Evan said something about the possibility of interest bearing dash accounts... that would bring in regular users who want to park a little money somewhere but don't have / want 1000 dash. If that happens, then invariably some of those will actually want to go on spending sprees.
 

GrandMasterDash

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Unfortunately, the price of masternodes is currently fixed to 1000 dash. And their number increases. If this continues, it will lead to a situation where 100% of the dash will be locked by the masternodes. Which means that dash will become a store of value. And something which is a store of value, is not digital cash, because the value of money exists only when you make transactions with it. The more transactions an object has, the more can be considered as money.

So either you have to reduce the price of the masternodes to a number below 1000 dash (if you are a proponent of this solution, why dont you make a proposal into the budget about it?), or set a maximum number of allowed masternodes to exist. Or alternatively set the maximum locked (by the masternodes) dash money, as this vote-proposition suggests. The three solutions are mathematically equivalent. Maybe there is also a fourth solution , or a fifth.

So among those mathematically equivalent proposition, you have to choose the one with the less disadvantages, because all solutions solve the problem, but some of them may cause other problems in other fields.

I am a proponent of the solution proposed in this thread, by this young generation dasher, who is smart enough not only to propose clever solutions like this one, but also smart enough to vote using numbers. Well done young boy, demo congratulates you.
I agree, at the moment, dash is quite investment driven but, then again, if it didn't have that Unique Selling Point, what else would it have over fiat? - I can do instant transactions with my debit / credit card... but interest bearing accounts for smaller users would be a good reason considering the current state of fiat.
 

demo

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Actually, I think Evan said something about the possibility of interest bearing dash accounts... that would bring in regular users who want to park a little money somewhere but don't have / want 1000 dash. If that happens, then invariably some of those will actually want to go on spending sprees.
The proposition of Evan does not solve the problem.

The problem addressed here is that dash has a few transactions. And because of the bad design those transactions will diminish in the future. If a money object is considered as a store of value and has a few transactions or no transactions at all, sooner or later will die.

This is what happened with gold, and this is the reason gold is dead as a money object. Fiat money prevailed against gold, because fiat has many transactions, and gold has not. A money object is considered as a store of value only because some people believe in that, so the store of value property of money is only a matter of faith. And such a faith can be shaken. But the noumerous transactions is also a matter of habit. A money object that is based both in faith and in habit, is much stronger than a money object that is based only in faith.

Habit is much more stronger that faith. People they first lose their soul, then they lose their habit. "First leaves the soul of a person and then his quirks". So the target should be the habit of the people, people must change their habit of doing transactions with their fiat money or with their credit card, and start making transactions using dash. This will boost dash to the sky.

But unfortunately the design of dash being made by the core team is at the opossite side, the incentive of doing transactions tends in the future to zero.
 
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TroyDASH

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I'm not sure that I agree with the premise that there is an "optimal" number. The optimal number is whatever the market equilibrium happens to be. Both saving and spending using Dash are good things, we should try to encourage both. Increasing adoption for spending might also cause investment to also go up due to higher returns, leaving the ratio unchanged. So I'm happy with the way it is now and am not particularly concerned about where that ratio is headed.
 

demo

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I'm not sure that I agree with the premise that there is an "optimal" number. The optimal number is whatever the market equilibrium happens to be. Both saving and spending using Dash are good things, we should try to encourage both. Increasing adoption for spending might also cause investment to also go up due to higher returns, leaving the ratio unchanged. So I'm happy with the way it is now and am not particularly concerned about where that ratio is headed.
There is not optimal number for the eternity. There is only optimal number of today. The number should change according to the needs of every generation. Thats why this vote should be a permanent one, and people should be able to vote and change their vote in it all the time and whenever they wish.

The average of the result, should be the current defined optimal number, that will remain stable as long as nobody changes his vote. And the protocol should take into account this number decided into the poll, when it is about to decide the maximum locked dash by the masternodes.

So first of all a structure of permanent polls that affect the dash protocol must be created. This structure can also be used to take some other decisions.
 
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demo

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Masternodes are 60% of holdings

<vote history>
What is the optimal % of Dash being locked up in masternodes?
10% 1 vote(s) 11.1%
20% 0 vote(s) 0.0%
30% 0 vote(s) 0.0%
40% 0 vote(s) 0.0%
50% 2 vote(s) 22.2%
60% 2 vote(s) 22.2%
70% 3 vote(s) 33.3%
80% 1 vote(s) 11.1%
90% 0 vote(s) 0.0%
Other... 0 vote(s) 0.0%
</vote history>

  • The optimal % of dash being locked up in masternodes is currently defined at (10+2X50+2X60+3X70+80)/9=57.77% if we extract the result using the selection process of the mean average.
  • The optimal % of dash being locked up in masternodes is currently defined at 70% if we extract the result using the selection process of the mode average.

So this poll requires people to cast a double vote of the form <number, selection process>, in order for people to decide also which of the two available methods (mean or mode average) is the more appropriate.

This is yet another practical implementation of vote using numbers.
 
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GrandMasterDash

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If you look at the credit card industry, a lot of people pay their cards on time... they make their money on the minority. So I don't see how there can be an optimal number because, even if we say 95% is stored value, the only thing that matters is the remaining 5% being actively used.
 

Dworf

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Jun 25, 2016
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the amount of DASH locked in masternodes is not really locked since it can be transfered within 15 seconds

the masternode count should remain a free market. and the incentive of 45% of the mining reward gives a balance. if the MN count rises the individual reward of currently ~ 10% per year goes down. but additional masternodes take a share of the floating DASH which impacts a price surge.

the question is if this leads to a balance of risk of holding vs MN reward. obviously yes as long as no other factors destroy DASH. Eg. if some kind of legislation or software bug leads to devaluation then MN owner will hurry to get out of DASH which will dump the price - but for now that does not seem to be the case

the real risk is that DASH does not get traction. in this case it will take a long time to get aware of the situation. this risk affects every crypto currency

doubling the masternode count is not possible anymore due to the limited amount of 6 Mio DASH. Another 2000 more masternodes would rise the price astronomically and drop the yearly reward to maybe 7%. but with each new MN the next one becomes more expensive so that every investor bears a higher risk which he needs to put in line with the reward. If I need to invest $100,000 for a MN and have a risk of 50% to lose 80% of the value I would not do it anymore

currently the situation looks quite stable. from my perspective a change in the masternode incentive structure is much more risky than to live with the current one

but if something needs to be done then the only path would be to do it in a way that does not destroy the value of DASH.

A fixed limit of MNs could work but would turn DASH into a insider club which is quite bad

A timeout for MNs would be an idea. lets say that MNs get the reward only for 1 year but then the reward goes down. Or maybe the reward drops slowly over time making it more profitible for new MNs and their investors. that would doubtless impact the DASH exchange rate in a highly positive way since old MN owners cannot simply setup a new one without buying another 1000 DASH. On top it would lead to a better distribution since every owner of MNs must monitor them if they time out.

maybe I should make a proposal for this ...
 

UdjinM6

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A timeout for MNs would be an idea. lets say that MNs get the reward only for 1 year but then the reward goes down. Or maybe the reward drops slowly over time making it more profitible for new MNs and their investors. that would doubtless impact the DASH exchange rate in a highly positive way since old MN owners cannot simply setup a new one without buying another 1000 DASH. On top it would lead to a better distribution since every owner of MNs must monitor them if they time out.
This won't work because there is no "buy" transaction. One could simply send funds to a new address every time MN "expire". Or use PrivateSend if you implement smth to track old MNs and force them to "sell" (I wouldn't do this because this would mean that we are trying to kill fungibility in Dash which would be really bad news).
 

Dworf

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This won't work because there is no "buy" transaction. One could simply send funds to a new address every time MN "expire". Or use PrivateSend if you implement smth to track old MNs and force them to "sell" (I wouldn't do this because this would mean that we are trying to kill fungibility in Dash which would be really bad news).
it takes around 9 days to get a masternode working until the first reward comes in. and it would not be critical to raise this time to 30days which would prevent your szenario
 

camosoul

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Dreaming up solutions to problems that don't exist, said solutions being easy to circumvent...

Expiring MNS? So I break the collateral, mix it, and set it right back up again. Maybe I set a new IP from my /64 of IPv6 addreses... Whatever. Why should a MN, which has provided service for longer than a new node, be the one that gets penalized? It makes more sense to give a bonus to exceptional nodes. But why care either way? It you provide adequate service, you get paid. End of sroty. Dreaming up busywork that has no purpose, ugh, what a waste of energy.

This thread is full of not understanding how it works. The original question isn't even a real concern. I don't even know where to start in trying to provide the education needed...

Duffs are the ultimate granular unit. All that matters is that you don't extend beyond that resolution. And even if you do, so what that you can't divide pennies... 1 DASH is worth $10,000? Oh darn! How terrible! Quick, ruin everything because, uhm, reasons!

Mad that didn't buy in two yeas ago. It's like the backwards version of be mad that ASICs made GPU mining obsolete... Some things change. Some things stay the same. Just move the decimal point and get on with your life.

Maybe everyone that bought BTC when it was $0.05 should be tracked down and forced to sell? I think there should be a "sell your bags" police created by the government because I'm mad that I didn't get in cheap when I could have. They should have quantum omnidecryptors from the planet Zargoth so they can forcibly take your privkeys after killing you for refusing to sell. Seriously? This is fuckin' stupid.

Lets kill all the Jews because pennies can't be divided into anything smaller... Obviously it's their fault and the world would be utopian if pennies could be dividied into nanopennies... I't all the JOOS fault!

Whatever...
 
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camosoul

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So there is no answer to your question.
Potato(e) is the correct answer.

The OP has a severely oversimplified view of the matter that is obscuring his ability to see reality. I think he just needs to read the DASH whitepapers again cuz I'm not sure where to start. The question doesn't even make sense.

What is the ideal ratio of booty to boobs? What is the ideal ratio of grains of sand on the beach compared to starts in the sky? What is the ideal ratio of smart people to stupid people? How can we tell if the Unicorn Rainbo Ass project is producing enough magnetic flux in the 5th dimension?
 

demo

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The more is locked,the more secure the network is.
Yes. And if it is 100% locked and no transactions happen, it is 100% secure.
And 100% dead, as a money object.:rolleyes:
 
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demo

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Masternodes are 60% of holdings
<vote history>
What is the optimal % of Dash being locked up in masternodes?
10% 1 vote(s) 8.3%
20% 0 vote(s) 0.0%
30% 0 vote(s) 0.0%
40% 1 vote(s) 8.3%
50% 2 vote(s) 16.7%
60% 2 vote(s) 16.7%
70% 3 vote(s) 25.0%
80% 1 vote(s) 8.3%
90% 0 vote(s) 0.0%
Other... 2 vote(s) 16.7%
</vote history>

<double vote history>
What the selection process of the above (and this one) vote should be?
mean average
1 vote(s) (demo) 100.0%
mode average 0 vote(s) 0.0%
other 0 vote(s) 0.0%
</double vote history>
  • The selection process is currently defined to be the mean average according to the rule :"Each selection process in order to be selected should initialy respect itself, then the most loved selection process is selected "
  • The other option has 2 votes and the rest votes are 10. The "other" option is not the most loved one, so a decision can be made.
  • The optimal % of dash being locked up in masternodes is currently defined at (10+40+2X50+2X60+3X70+80)/10=56%.

In this vote, for the first time in dash history, a double vote of the form <number, selection process> has been used, in order for people to be able to decide without someone to impose the selection process. (actually the correct vote is the "triple vote" <number, selection process, minimum participation percentage> but I will explain this later on) This is yet another practical implementation of vote using numbers.
 
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camosoul

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@camosoul
As long as you argue like a schoolboy it doesn't bring the discussion forward
I'm not arguing. I'm exposing a schooboy.

Read the signature.

Using "manners" as an Ad Hominem attack may be common, but it's still Ad Hominem.

...and it exposes you as a snob.
 

demo

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  • The optimal % of dash being locked up in masternodes is currently defined at (10+40+2X50+2X60+3X70+80)/10=56%.

So, as long as currently 60% of the dash is locked in the masternodes, this means that 4% of the masternodes should cost less than 1000 dash. A solution to this may be the lucky ones to be selected by the protocol, randomly. Or another solution maybe the price of all masternodes to be reduced a little bit, so that it will fit into this 56%.

The random selection of cheaper masternodes, or alternative the reduction of the masternodes price, is the subject of yet another vote. A vote which depends on the result of the previous vote, this one. This is how the tree of the votes, the knowledge tree, is built. The knowledge tree is actually a tree (or a graph) of interdependent votes, where the result of one vote makes another vote to appear or to dissapear. So first of all a structure of interdependent permanent votes, that affects the dash protocol in the runtime, must be created. This structure can be used to take all decisions, like this one also. This tree can be written into the blockchain, so that a votechain is created. Every votechain block will preserve the current voting tree structure, and the current result of the votes (the vote history).

If I had 5 dash, I could add this as a proposal to the budget, for the dormant whales to wake up and vote for it.
 
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Willy Woo

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I suspect if evolution comes out with "savings accounts" (i.e. simple UX wrapping around protocol level partial participation in a masternode bond), we might masternode bonds as a proportion of the total supply increase, maybe to 90%. Most people will find it beneficial to "earn interest" by moving Dash to the fore mentioned "savings account", keeping only small amounts in their cash accounts to pay for stuff.

In such a setup, we could see the inverse correlation @demo mentions between Dash-as-money vs Dash-as-store-of-value break to a certain degree.

That'd mean Dash price would increase based on an increase in HODLers (supply vs demand) plus a double whammy of utility valuation via increased transaction activity on the network***

*** you can do a valuation on the network based on txs/day, both using Metcalfe's Law (I did one for BTC) and simple multipliers.