Pre-Proposal Discussion: Dash to Fiat Payment Processor

masternode

New Member
Mar 9, 2015
39
68
18
Evan mentioned at the last board meeting he felt we didn't have enough funds for projects. It's clear to me now that is not the case. We have enough funds for projects. What we have is a talent void and the inability to be selective about what we are funding. Evan is not addressing the right problem.

If we continue funding projects like this payment processor, with no experienced team and no real plan, then we are going to wind up with a bunch of half baked projects the vast majority of which will fail (and I'd put that failure rate at around 99%). In the long run we will simply be taking money and turning it into less than we started. Even VC's with incredibly rigorous vetting have a failure rate of around 80 to 90%, so quantifying our failure rate on projects like the payment processor at 99% is not unreasonable.

It's very easy how the VC model works. Let me explain, and maybe the group see the importance of being much more selective about who they fund. VC's invest in 10 companies hoping that they get returns of greater than 10x (good VC's like to truly believe that their investment has a chance of getting them a 100x return). If 9 fail and 1 gets 10x they basically break even. If 8 fail and 2 succeed they get a return. They span across a large enough sample size to ensure that they can withstand the natural variance of the strategy and lock in a few winners to offset all the losers and then some.

Building a business is not easy, let alone one where you can provide a multiple return of 10x +. This extremely tough to do and requires some serious talent behind the startup. Now getting a 100x return is extremely rare. You need a very seasoned team, good strategy, perfect execution and a ton of luck. Those kinds of returns would likely get them near unicorn status. This is why they call them unicorns, because they are so hard to find they are considered mythical (technically a unicorn is a company that is worth over $1B but the point here is that 100x returns on an investment are extremely rare roughly at the same order of magnitude).

Now imagine they were making bets that were 99% to fail (as opposed to their usual 80 - 90% to win rate). Then it's impossible to win. Basically they would be hoping they are lucky enough to find someone who can return 100x. And as I've said before, hope is not a strategy. They would find themselves in a spot where they need to catch something near unicorn status just to break even. Good luck with that.

This is why guys like Jason Calacanis look to try to believe a start up will get them 100x return on their money even with an amazing team (that is likely to have 80-90% failure rate). So what this means is that they sit around and say no pretty much 99%+ of the time.

https://www.quora.com/What-are-the-...up-that-can-make-you-say-Yes-I-want-to-invest

Now you might say "these are not investments, they are more like grants". But in the end that is arbitrary. We have asked to take funds that miners should normally have received and told them we believe these funds are better utilized to fund companies through voting. We are saying we can take money X and create value with it that will help the ecosystem in the amount of X * Y (where Y is > 1). But in order for it to be helfpul to the ecosystem our bets need to be positive expectation. Bets with mediocre teams that have a success rate of around 1% are not the kind of bets that are expected to give a return in value. If we make 100 bets and 1 of them has a success rate of 20x (remember banking on 100x is as insane as saying your going out into the woods to find a unicorn) then we are losing 80% of the value. 1 * 20 + 99 *0 = 20 (from 100 that we started). Even if the bet has a 50x return we are still set up in a spot where we lose money. So can you honestly tell me that when we are investing in a couple guys with no relevant experience, no realistic approach, and no past proof of success other than dashstickers.xyz that this is the team that will get us 100x return??!

So if we follow a strategy that mathematically cannot result in a positive expected value through these investments, then are we really doing what we promised when we asked for the funds to be reallocated?

The idea that we have the funds so we should use them on any random people or half baked project is extremely irresponsible and basically a complete misuse of funds. We should look at all of these projects and really ask ourselves. Is this team the right team to create value so that in the X*Y equation that Y is in fact greater than 1. If the answer is yes, then we should approve it. If the answer is no, then we should pass on that project and go to the next (regardless of how attractive the idea looks).

-Ed
 
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InTheWoods

Well-known Member
Foundation Member
Oct 12, 2014
721
941
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masternode

Perhaps there needs to be a failure or two for the community to be more careful on how the money is spent. Not saying it's ideal but it's what will probably happen. A bit of trial and error if you will.
 
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qwizzie

Well-known Member
Aug 6, 2014
1,706
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masternode

I find it very strange that you use your Dash Foundation Boardmember status to try to influence people into casting a NO vote.
In my eyes the Dash Foundation Board should speak out as either one entity / 1 voice or just vote individually without much fuss.
As i'm not getting the impression the Dash Foundation Board speaks out as one voice on this topic, i cant help but feel there is
a powerplay going on .. which i really really dont like.
 
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masternode

New Member
Mar 9, 2015
39
68
18
masternode

I find it very strange that you use your Dash Foundation Boardmember status to try to influence people into casting a NO vote.
In my eyes the Dash Foundation Board should speak out as either one entity / 1 voice or just vote individually without much fuss.
As i'm not getting the impression the Dash Foundation Board speaks out as one voice on this topic, i cant help but feel there is
a powerplay going on .. which i really really dont like.
If we are wasting money I intend to be vocal about it. It's similar to giving an endorsement. Just in the opposite direction. Yet no one complains about endorsements.

Whether or not anyone likes what I have to say is pretty meaningless to me. More often than not they won't as I usually only get vocal when there are glaring problems. I don't really care about being liked or people thinking I am nice. I care about progress and returns.

My role on the board is to represent the voice of the investors as I am responsible for bringing some of the largest holders to Dash. And from a pure investment perspective the payment processor proposal is simply a money sink.

If anything I'm doing exactly what I was intended to do. I am leveraging my expertise and position for the long term benefit of Dash.

I can assure you one thing, there is no sort of power play going on. I have an extremely good relationship with all other members of the board and don't see that changing in the foreseeable future regardless of my views on a project like this.

I'm definitely wired differently than the others. I'm much more direct and immediate when I see problems. Yes it may ruffle feathers, but it also serves as a great engine when I get behind projects with support (as evident for all I've done over the years for Darkcoin/Dash).
 
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Sapereaude

Well-known Member
Foundation Member
Apr 30, 2014
191
235
203
So this has been funded and we still have no development details, or even how to categorize what they end up providing as successful or unsuccessful.

Hard to believe we have nothing better to spend 2ish grand on...
 
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7dhdaQhZ

New Member
Mar 6, 2016
36
18
8
So this has been funded and we still have no development details, or even how to categorize what they end up providing as successful or unsuccessful.

Hard to believe we have nothing better to spend 2ish grand on...
Agree. I could understand it if it was to help support an established Exhange to add Dash within a certain time frame. At least that would potentially bring new users and value. Hopefully the funded project will actually do the same.
 

qwizzie

Well-known Member
Aug 6, 2014
1,706
819
183
DartPayments,

As you guys are walking a thin line with regards to support for this budget proposal, may i suggest that besides focussing on your project you guys also focus on
building trust with this community ? The best way to build trust with this community is by providing thorough and detailed feedback about the status and
progress of your project on a monthly basis (preferrably before each superblock).

Good luck with your project and i'm looking forward to future feedback.
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,871
1,863
1,283
I agree with qwizzie above, DartPayments , you haven't posted in a few days. I suspect you're over extended with the rLoop project, etc to post on forums, but this is a very jumpy group now. Because we take a risk of a proposer running off with the Dash, we worry about being had, even if it's not "our" money we feel responsible for it. You need to find a way to post something on a daily basis really, or let us know if you're traveling or unable to talk. I for one want to see you all make a go of this, and I'm sure your project would be voted back up if you interact with the community more. Thanks.
 

HinnomTX

Active Member
Jul 22, 2014
166
196
103
I agree with qwizzie above, DartPayments , you haven't posted in a few days. I suspect you're over extended with the rLoop project, etc to post on forums, but this is a very jumpy group now. Because we take a risk of a proposer running off with the Dash, we worry about being had, even if it's not "our" money we feel responsible for it. You need to find a way to post something on a daily basis really, or let us know if you're traveling or unable to talk. I for one want to see you all make a go of this, and I'm sure your project would be voted back up if you interact with the community more. Thanks.
Easy Tante, no need to micro manage. We've been in contact with them on dashwhale in the last day or so, right?
 
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TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,871
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oooooh, am I micro managing again? Oops. Just want this one to work, and see that they've been downvoted which makes me nervous. Not because I think they've run off with the funds, but that they might lose the funds. I'm just trying to explain to them the importance of communication with us and encourage them to peek in once in a while. I found this thread on page 3, and saw it downvoted. I really want this one to work :)

So yah, I act like the reminder fairy all the time, sorry if that's annoying :oops::oops::tongue:
 

DartPayments

Member
Feb 17, 2016
66
64
58
DartPayments,

As you guys are walking a thin line with regards to support for this budget proposal, may i suggest that besides focussing on your project you guys also focus on
building trust with this community ? The best way to build trust with this community is by providing thorough and detailed feedback about the status and
progress of your project on a monthly basis (preferrably before each superblock).

Good luck with your project and i'm looking forward to future feedback.
We're a bit disappointed with being voted back under again, but we're confident of winning enough support back by the next superblock.

In the next few days we will hav
 
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DartPayments

Member
Feb 17, 2016
66
64
58
I agree with qwizzie above, DartPayments , you haven't posted in a few days. I suspect you're over extended with the rLoop project, etc to post on forums, but this is a very jumpy group now. Because we take a risk of a proposer running off with the Dash, we worry about being had, even if it's not "our" money we feel responsible for it. You need to find a way to post something on a daily basis really, or let us know if you're traveling or unable to talk. I for one want to see you all make a go of this, and I'm sure your project would be voted back up if you interact with the community more. Thanks.
Daily might be a bit frequent, but we're certainly going to be posting updates. Over the last couple of days we've just been further nailing down what we are going to prioritise in the initial build, and engaging some freelancers to work so specific aspects. There'll be a blog post soon.
 
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emitkirby

New Member
Jan 21, 2016
9
5
3
I wouldn't usually quote a whole post. I believe this is the single most important thing that has been said regarding the project funds and how they are spent.
If you are not qualified to do so, or don't have a proven clear background in doing so. You should not be requesting funding. Dash should not be used as a method to fund startups.

Well said masternode.


Evan mentioned at the last board meeting he felt we didn't have enough funds for projects. It's clear to me now that is not the case. We have enough funds for projects. What we have is a talent void and the inability to be selective about what we are funding. Evan is not addressing the right problem.

If we continue funding projects like this payment processor, with no experienced team and no real plan, then we are going to wind up with a bunch of half baked projects the vast majority of which will fail (and I'd put that failure rate at around 99%). In the long run we will simply be taking money and turning it into less than we started. Even VC's with incredibly rigorous vetting have a failure rate of around 80 to 90%, so quantifying our failure rate on projects like the payment processor at 99% is not unreasonable.

It's very easy how the VC model works. Let me explain, and maybe the group see the importance of being much more selective about who they fund. VC's invest in 10 companies hoping that they get returns of greater than 10x (good VC's like to truly believe that their investment has a chance of getting them a 100x return). If 9 fail and 1 gets 10x they basically break even. If 8 fail and 2 succeed they get a return. They span across a large enough sample size to ensure that they can withstand the natural variance of the strategy and lock in a few winners to offset all the losers and then some.

Building a business is not easy, let alone one where you can provide a multiple return of 10x +. This extremely tough to do and requires some serious talent behind the startup. Now getting a 100x return is extremely rare. You need a very seasoned team, good strategy, perfect execution and a ton of luck. Those kinds of returns would likely get them near unicorn status. This is why they call them unicorns, because they are so hard to find they are considered mythical (technically a unicorn is a company that is worth over $1B but the point here is that 100x returns on an investment are extremely rare roughly at the same order of magnitude).

Now imagine they were making bets that were 99% to fail (as opposed to their usual 80 - 90% to win rate). Then it's impossible to win. Basically they would be hoping they are lucky enough to find someone who can return 100x. And as I've said before, hope is not a strategy. They would find themselves in a spot where they need to catch something near unicorn status just to break even. Good luck with that.

This is why guys like Jason Calacanis look to try to believe a start up will get them 100x return on their money even with an amazing team (that is likely to have 80-90% failure rate). So what this means is that they sit around and say no pretty much 99%+ of the time.

https://www.quora.com/What-are-the-...up-that-can-make-you-say-Yes-I-want-to-invest

Now you might say "these are not investments, they are more like grants". But in the end that is arbitrary. We have asked to take funds that miners should normally have received and told them we believe these funds are better utilized to fund companies through voting. We are saying we can take money X and create value with it that will help the ecosystem in the amount of X * Y (where Y is > 1). But in order for it to be helfpul to the ecosystem our bets need to be positive expectation. Bets with mediocre teams that have a success rate of around 1% are not the kind of bets that are expected to give a return in value. If we make 100 bets and 1 of them has a success rate of 20x (remember banking on 100x is as insane as saying your going out into the woods to find a unicorn) then we are losing 80% of the value. 1 * 20 + 99 *0 = 20 (from 100 that we started). Even if the bet has a 50x return we are still set up in a spot where we lose money. So can you honestly tell me that when we are investing in a couple guys with no relevant experience, no realistic approach, and no past proof of success other than dashstickers.xyz that this is the team that will get us 100x return??!

So if we follow a strategy that mathematically cannot result in a positive expected value through these investments, then are we really doing what we promised when we asked for the funds to be reallocated?

The idea that we have the funds so we should use them on any random people or half baked project is extremely irresponsible and basically a complete misuse of funds. We should look at all of these projects and really ask ourselves. Is this team the right team to create value so that in the X*Y equation that Y is in fact greater than 1. If the answer is yes, then we should approve it. If the answer is no, then we should pass on that project and go to the next (regardless of how attractive the idea looks).

-Ed
 
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alex-ru

Grizzled Member
Dash Support Group
Jul 14, 2014
2,374
3,242
1,183
Hey DartPayments,

Are you going to publish some reports? - so people could monitor the situation with your Project Development (and budget funds spendings)...

Thanks!
 
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DartPayments

Member
Feb 17, 2016
66
64
58
As some people may have noticed our budget proposal has been voted down to -9%. this was the result of one masternode owner with approximately 360 masternodes switching their 'yes' votes to 'no' votes therefore reducing net votes by 720. We don't know who this is and haven't had any communication as to why the change in heart.

At this stage we would struggle to progress with our project should we not receive any funds in the next budget cycle. We recently published a blog post with some info on our progress, and are happy to field questions. At present we have only spent approximately 55% on the funds we received in the last budget cycle (converted to ~$1,900).

Any of the large holders (particularly the one mentioned above) are encouraged to get in contact directly if they would like more info.
 

mastermined

Active Member
May 26, 2014
512
388
133
As some people may have noticed our budget proposal has been voted down to -9%. this was the result of one masternode owner with approximately 360 masternodes switching their 'yes' votes to 'no' votes therefore reducing net votes by 720. We don't know who this is and haven't had any communication as to why the change in heart.

At this stage we would struggle to progress with our project should we not receive any funds in the next budget cycle. We recently published a blog post with some info on our progress, and are happy to field questions. At present we have only spent approximately 55% on the funds we received in the last budget cycle (converted to ~$1,900).

Any of the large holders (particularly the one mentioned above) are encouraged to get in contact directly if they would like more info.
my guess is that with the new fiat gateway proposal (formally public awareness) this will be redundant. another reason we need the dashworld proposal to do a marketing audit and help coordinate different proposals. i like the fiat gateway proposal a lot but it was not handled as well as it could have been.

someone should confirm that this prop is not made redundant by the fiat gateway prop or something in evolution down the line.

also the 6k+ usd SpectroCoin debit card proposal seems to be redundant (CryptoCapital) now too. i guess we could always have two debit card choices which is nice but is it worth it? i think there is already other debit card choices out there two that use shapeshift which would probably add more fees.