• Forum has been upgraded, all links, images, etc are as they were. Please see Official Announcements for more information

Masternodes are 60% of holdings

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

  • 10%

    Votes: 1 3.6%
  • 20%

    Votes: 0 0.0%
  • 30%

    Votes: 0 0.0%
  • 40%

    Votes: 1 3.6%
  • 50%

    Votes: 4 14.3%
  • 60%

    Votes: 7 25.0%
  • 70%

    Votes: 8 28.6%
  • 80%

    Votes: 2 7.1%
  • 90%

    Votes: 0 0.0%
  • Other...

    Votes: 5 17.9%

  • Total voters
    28
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?
 
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.
 
Last edited:
@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.
 
  • 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.
 
Last edited:
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.
 
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.

Could you please provide some links on the terminology you are using in the above quote. What is UX wrapping?
 
Could you please provide some links on the terminology you are using in the above quote. What is UX wrapping?

One of the proposed features for Evolution that Evan talks about is having a "Savings Account" where the account holder can move Dash into that type of account and earn interest. In essence the UI is providing a familiar interface to the user (I call that a UX wrapper, hiding the real complexity). What's really happening is the user's wallet is sending Dash to participate partially in a Masternode bond and getting payouts which look like "interest".
 
  • Like
Reactions: daf
ΝΕW RESULT

Masternodes are 60% of holdings

<vote history>
What is the optimal % of Dash being locked up in masternodes?
10% 1 vote(s) 7.1%, 20% 0 vote(s) 0.0%, 30% 0 vote(s) 0.0%
40% 1 vote(s) 7.1%, 50% 2 vote(s) 14.3%, 60% 2 vote(s) 14.3%
70% 5 vote(s) 35.7%, 80% 1 vote(s) 7.1%, 90% 0 vote(s) 0.0%
Other... 2 vote(s) 14.3%
</vote history>
<double vote history> (this vote is hypothetical, I will to create it later but lets fill it with results for the example)
What the selection process of the above (and this one) vote should be?
mean average
7 vote(s) 58%
mode average 5 vote(s) 42% (I assume those who voted 70% they like this selection process)
other 2 vote(s) 0.0%
</double vote history>
<selection process>
  • 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 12. 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+5X70+80)/12=58.33%.
</selection process>

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.
 
Last edited:
Optimal...not sure this can be answered in the arbitrary percentage sense, but perhaps instead in the abstract sense.

Suppose you had 90% locked up in MNs...that would mean 10% was used for "regular commerce", or whatever we want to call it. Advantage of this is like it is with the gold market...it creates some relative level of stability to the price because the gold bugs don't sell at every trading indicator. Reverse that to 90% regular commerce and 10% in MNs, we probably get much wilder price swings, which discourages keeping it locked in MNs to some degree (compared to the flipped percentage in the first example). So, there is likely some tipping point for everyone but true believers in the tech ("Dash bugs") where if not enough is locked in MNs as a percent of the total, the price will fluctuate too wildly, discouraging MN counts from rising unless the number of Dash needed for a MN is reduced, or regular commerce recedes (not a good thing) to come into some equilibrium again with the MN share of the available DASH.

So, we can deduce that there is some moving target based upon several variables, but not some set percentage. Instead, the "optimal" percentage at any moment is the percentage which allows for MN runners who aren't Dash bugs (ride or die) to feel comfortable enough in relative price stability to keep their investment in place, or to add new MNs to that investment (or, alternatively, invest in their first MN due to relative price stability). The other side of this optimal percentage is enough Dash in circulation for regular commerce to keep liquidity high and allow for steady expansion of the user base, but not so low as to mess with liquidity and expansion, but also not so high as to cause relative price instability.

Of course, there are other factors which could change this view of "optimal". For example, if Dash were to implement some Keynesian (oh no!) mechanism like some central bank, where it used some amount of Dash to shift between MNs and Dash available for regular commerce, which would be like a central bank manipulating interest rates and money supply to cause artificial (and unsustainable!) stability, then obviously what it optimal and how to achieve it would change to a degree (as the intervention causes its own unintended consequences - see the failure to peg to the dollar in other crypto projects as a "sort of" example of this failed concept).

So, my answer is: The "optimal" percentage of Dash in MNs versus regular commerce is a moving target that differs from moment to moment, but based upon what I know now about Dash, and what variables I can therefore consider, the optimal percentage is X, where X is neither 0% nor 100%, but some non-zero percentage for both MNs and regular commerce. These two optimal percentages (MNs and regular commerce) are likely to be weighted more toward MNs than regular commerce, based upon how relative price stability is achieved (short and medium term) in present fiat currencies and commodities, like gold. The important considerations are a high enough MNs percentage to create relative price stability and maintain MN investment and facilitate steady growth proportional to user growth, and yet high enough percentage for regular commerce to keep high enough availability to maintain liquidity relative to user growth.

I'd venture a guess that as the project stands, 60% isn't a bad number, and I wouldn't worry at even 70% or 80%. As the user base grows, and the interest bearing accounts in Evolution come into being, the optimal percentage will likely drop, as parking your Dash, like say 100 Dash, will earn you interest like current MNs, so that will perpetuate stability in price naturally, even without the consideration they are indeed a partial MN, for all intents and purposes, at that point. Gold, for example, saw a bottom for the market at about $1050 per troy oz. It has bounced off that bottom and is now at about $1300 an ounce. It's gone to almost $1400, and hasn't (yet) dipped below $1300 since reaching that mark some months ago. At $1050, it was mostly governments and gold bugs holding gold, as it is not used as a form of money much these days (digital fiat or paper/coin fiat are mostly used worldwide). You can relate this to MNs and their holdings. This created price stability, relatively, for gold (hence, the bottom was found and it hasn't approached it since). As more people began to invest in gold after the bottom was in, for panic reasons or for inflation hedging to some degree, the price began to rise, but so did the volatility (as there was a lot more daily trading going on). This added trading and relative price fluctuations can be related to Dash for "regular commerce". What would be optimal, so to speak, for gold, is the same as for Dash, in theory...you want long term holders of gold to reach an equilibrium with short term traders of it to create A) relative price stability and available liquidity no matter how many people use it or not, which will inspire further trust in it and therefore further growth of the market. In other words, the "bugs" and the "users" are locked in a sort of ever-changing balancing act, or dance, and the "optimal" percentage for each is based upon user volume and demand, growth or recession rate in this regard, etc. Assuming we reach such an equilibrium, if more people suddenly want in Dash for just short to medium term commerce uses, then we suddenly need some proportional drop in percentage of Dash stored in MNs (or increase in the speed at which new coins are mined, I guess). If demand suddenly drops from the reached equilibrium, then the percentage stored in MNs need to increase to maintain that optimal price stability, optimal liquidity, and optimal incentives for further proportional investment and growth (and to maintain current investments and growth rate).

Long winded enough?

Honestly, I think the market will regulate this just fine on its own. Unless we see some major liquidity problems, or major growth problems (stalled or recession), or major MN sell-off, I wouldn't worry about it. Just monitor it, find Standard Deviations, establish Confidence Intervals (of say 95% or better), and look for signs of extreme Variance that signal a problem.
 
Last edited:
Ben makes a great point on price stability that MNs offer. I've been bearish on Bitcoin as a payments network as it seems we are like 3-5 years away for it to have price volatility low enough for people to truly hold their coins for spending. I've seen comments around a $40b market cap for Bitcoin to have stability low enough as a store of value for ordinary people.

Likewise I've been nervous about Dash because it's aiming at the payments market at a market cap of below $100m. But the MNs locking up Dash does provide a much needed stabilising function and you can see how the volatility of Dash is much lower than Bitcoin for its given size.

I think >90% is optimal right now to maximise stability but as the market cap grows we can afford to go lower.

I do have a "wait a second" moment here. Does locking away Dash create reduced volatility? Say there's 18m Dash. 18.999999m Dash is locked away. There's only 1 Dash to trade on markets, I don't see how this is stable. I think it would be the distribution of that last Dash among traders and the amount of traders bidding on it that would form the variables in the volatility equation.
 
It is wrong to compare dash with gold.
You have to compare dash with fiat money.

So you have to measure the transactions, and not the liquidity.

Dash is not a commodity, it is cash!! If it isnt, then it is a failure.
 
Optimal...not sure this can be answered in the arbitrary percentage sense, but perhaps instead in the abstract sense.

Suppose you had 90% locked up in MNs...that would mean 10% was used for "regular commerce", or whatever we want to call it. Advantage of this is like it is with the gold market...it creates some relative level of stability to the price because the gold bugs don't sell at every trading indicator. Reverse that to 90% regular commerce and 10% in MNs, we probably get much wilder price swings, which discourages keeping it locked in MNs to some degree (compared to the flipped percentage in the first example). So, there is likely some tipping point for everyone but true believers in the tech ("Dash bugs") where if not enough is locked in MNs as a percent of the total, the price will fluctuate too wildly, discouraging MN counts from rising unless the number of Dash needed for a MN is reduced, or regular commerce recedes (not a good thing) to come into some equilibrium again with the MN share of the available DASH.

So, we can deduce that there is some moving target based upon several variables, but not some set percentage. Instead, the "optimal" percentage at any moment is the percentage which allows for MN runners who aren't Dash bugs (ride or die) to feel comfortable enough in relative price stability to keep their investment in place, or to add new MNs to that investment (or, alternatively, invest in their first MN due to relative price stability). The other side of this optimal percentage is enough Dash in circulation for regular commerce to keep liquidity high and allow for steady expansion of the user base, but not so low as to mess with liquidity and expansion, but also not so high as to cause relative price instability.

Of course, there are other factors which could change this view of "optimal". For example, if Dash were to implement some Keynesian (oh no!) mechanism like some central bank, where it used some amount of Dash to shift between MNs and Dash available for regular commerce, which would be like a central bank manipulating interest rates and money supply to cause artificial (and unsustainable!) stability, then obviously what it optimal and how to achieve it would change to a degree (as the intervention causes its own unintended consequences - see the failure to peg to the dollar in other crypto projects as a "sort of" example of this failed concept).

So, my answer is: The "optimal" percentage of Dash in MNs versus regular commerce is a moving target that differs from moment to moment, but based upon what I know now about Dash, and what variables I can therefore consider, the optimal percentage is X, where X is neither 0% nor 100%, but some non-zero percentage for both MNs and regular commerce. These two optimal percentages (MNs and regular commerce) are likely to be weighted more toward MNs than regular commerce, based upon how relative price stability is achieved (short and medium term) in present fiat currencies and commodities, like gold. The important considerations are a high enough MNs percentage to create relative price stability and maintain MN investment and facilitate steady growth proportional to user growth, and yet high enough percentage for regular commerce to keep high enough availability to maintain liquidity relative to user growth.

I'd venture a guess that as the project stands, 60% isn't a bad number, and I wouldn't worry at even 70% or 80%. As the user base grows, and the interest bearing accounts in Evolution come into being, the optimal percentage will likely drop, as parking your Dash, like say 100 Dash, will earn you interest like current MNs, so that will perpetuate stability in price naturally, even without the consideration they are indeed a partial MN, for all intents and purposes, at that point. Gold, for example, saw a bottom for the market at about $1050 per troy oz. It has bounced off that bottom and is now at about $1300 an ounce. It's gone to almost $1400, and hasn't (yet) dipped below $1300 since reaching that mark some months ago. At $1050, it was mostly governments and gold bugs holding gold, as it is not used as a form of money much these days (digital fiat or paper/coin fiat are mostly used worldwide). You can relate this to MNs and their holdings. This created price stability, relatively, for gold (hence, the bottom was found and it hasn't approached it since). As more people began to invest in gold after the bottom was in, for panic reasons or for inflation hedging to some degree, the price began to rise, but so did the volatility (as there was a lot more daily trading going on). This added trading and relative price fluctuations can be related to Dash for "regular commerce". What would be optimal, so to speak, for gold, is the same as for Dash, in theory...you want long term holders of gold to reach an equilibrium with short term traders of it to create A) relative price stability and available liquidity no matter how many people use it or not, which will inspire further trust in it and therefore further growth of the market. In other words, the "bugs" and the "users" are locked in a sort of ever-changing balancing act, or dance, and the "optimal" percentage for each is based upon user volume and demand, growth or recession rate in this regard, etc. Assuming we reach such an equilibrium, if more people suddenly want in Dash for just short to medium term commerce uses, then we suddenly need some proportional drop in percentage of Dash stored in MNs (or increase in the speed at which new coins are mined, I guess). If demand suddenly drops from the reached equilibrium, then the percentage stored in MNs need to increase to maintain that optimal price stability, optimal liquidity, and optimal incentives for further proportional investment and growth (and to maintain current investments and growth rate).

Long winded enough?

Honestly, I think the market will regulate this just fine on its own. Unless we see some major liquidity problems, or major growth problems (stalled or recession), or major MN sell-off, I wouldn't worry about it. Just monitor it, find Standard Deviations, establish Confidence Intervals (of say 95% or better), and look for signs of extreme Variance that signal a problem.

Interesting point of view, could've been even longer winded imho ;) Probably the first time I've seen Keynesian principals mentioned in the land of crypto and not been horrified and outraged too, there does seem to be a natural price stabilising effect from a very small amount of variance in the MN count and there could be something big in figuring out how to encourage and support it.

Something else few seem to realise is the collateral tied up in the masternodes is a huge resource for Dash to tap into at some later date and I've absolutely no doubt the devs are well aware of it. One example is a lending market but that can't really happen until the network is able to quantify risk in some way, the social wallet functions are a step in that direction but basically anything the network can handle that offers a better return than the masternodes can potentially be used to tap into that huge resource, basically more than half of Dashes total market cap.
 
It meted out as a volume of resource, it could work. But reducing MNs to a fog of Proof of Hoard seems to me, nullifies the ability to enforce Proof of Service... The only thing one could accurately gauge in that environment is storage space...
 
Ben makes a great point on price stability that MNs offer. I've been bearish on Bitcoin as a payments network as it seems we are like 3-5 years away for it to have price volatility low enough for people to truly hold their coins for spending. I've seen comments around a $40b market cap for Bitcoin to have stability low enough as a store of value for ordinary people.

Likewise I've been nervous about Dash because it's aiming at the payments market at a market cap of below $100m. But the MNs locking up Dash does provide a much needed stabilising function and you can see how the volatility of Dash is much lower than Bitcoin for its given size.

I think >90% is optimal right now to maximise stability but as the market cap grows we can afford to go lower.

I do have a "wait a second" moment here. Does locking away Dash create reduced volatility? Say there's 18m Dash. 18.999999m Dash is locked away. There's only 1 Dash to trade on markets, I don't see how this is stable. I think it would be the distribution of that last Dash among traders and the amount of traders bidding on it that would form the variables in the volatility equation.
I've had this thought as well. Any stabilizing force seem to be brought by proxy of spike discouragement; buy in at any considerable volume and the limited supply will spike you out of your own market order. So don't buy.

For the moment, all it really does is amplify the time and resources needed to manipulate. And for anyone paying attention, that hasn't been super effective for the last month or so...
 
Back
Top