Pre-proposal: Grant to masternodes all leftover treasury funds each cycle.

forro

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Apr 13, 2019
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Pre-proposal: Grant to masternodes all leftover treasury funds each cycle.

It seems to me the relatively higher than usual level of participation of a few dedicated MNOs indicates an increased level of impatience and agitation with the project's place and progress. In my opinion it is not without justification.

DCG has recognized the current level of inflation as a problem affecting the project's competitiveness with regard to value and ranking. Ten percent of all inflation in the dash ecosystem comes from the treasury, each month. That is significant.

If, by July 17th, DCG does not submit a proposal where remaining treasury funds are granted to masternodes (or and/or miners), I will submit my own, where remaining treasury funds are granted solely to masternodes. The advantage of my proposal over DCG's is multiple: miner's income is still 100% predictable; and more of the skin comes from masternodes, so scrutiny of the treasury would increase proportionately.

The objective of this proposal is provide a subtle shift in economics. Currently, leftover treasury funds are not created, and will be mined in the future, which gives an impression of 'free money', which the MNOs can disburse without consequence. Instead, all leftover treasury funds will be distributed equally to all masternodes elegible to receive awards on the day it is disbursed, funds now viewed as 'coming out of my pocket!" For example, if the treasury is ~5000 dash, and there are ~5000 masternodes, each masternode will receive a bonus of 1 dash if all proposals are rejected.

The resulting shift in perception will cause passive or apathetic MNOs to become active participants in the treasury system, where, to increase their own bottom line, they will reject proposals by default rather than approve them. However, MNOs will, in the hopes of increasing the value of their holdings, approve proposals presenting a sufficiently well defined problem, provides a sufficiently well defined solution, by proposal owners who have provided sufficient evidence of their trustworthiness and ability to achieve results, the proposal will pass. This is the goal.

To reiterate, the only change this proposal makes is to grant to masternodes the leftover treasury funds each month. The rest is the result of properly aligned incentives.

This proposal requires that the changes be implemented in a minor release within 90 days of the proposal passing. It does not seem to be difficult to implement, and 90 days is surely sufficient time to do so. Failure of DCG to follow through would indicate bad faith of DCG management. Further follow up action would be required.

Actual submission of this proposal will depend on how this thread progresses. As an MNO, I am willing and able to pay the 5 dash cost alone. I will bump thread daily if necessary. Assistance in this is appreciated.
 

forro

Member
Apr 13, 2019
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It appears DCG will submit the economic adjustment proposals in a serial fashion, rather than in parallel, which makes sense. The first proposal is currently up for approval, so in support of DCG's approach, I will not submit my proposal this month. They may or may not submit their next proposal next month. They could decide to wait one or more cycles. If they havent done so by august the 6th, I will submit mine.

Incentivizing MNOs more directly to participate in the treasury and scrutinize proposals is urgently needed.
 

JZA

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Jan 4, 2016
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Wouldnt this just damage the already greatly battered price, increasing the offer of dash will cause add even more pressure to perform and bigger pain if not. Because now you have an extra 1000 or more DASH released even if its at the hands of DCG. I also dont see DCG becoming more productive just because they have an extra cushion of DASH on the back burner. If that was the case, why not just give them all the budget for the next 3 months and expect miracles on the price and product deliveries. So I am not sure how not burning the excess dash will make any real difference.
 

forro

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Apr 13, 2019
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A new budget cycle has begun. I will submit this proposal on August 6 if DCG has not already submitted theirs. Also, as I feel strongly that leftover funds should be addressed before raising the treasury cap, I will still submit my proposal if DCG's includes both.
 

stan.distortion

Active Member
Oct 30, 2014
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Are you aware of the economic incentive this creates? If approved it incentivises masternodes to vote against funding anything, the funds go from belonging to the treasury to belonging to masternode owners. Masternode owners aren't that dumb, all proposals that have tried to reward them from the budget in the past have been shot down in flames and for good reason, it's impossible to make impartial decisions when you have a vested interest in the outcome.

The governance system exploits that, masternode owners are rewarded indirectly for making decisions based on what benefits the whole network. Take that away by rewarding masternodes directly from the budget and you might as well throw the whole governance system in the trash.
 

forro

Member
Apr 13, 2019
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Are you aware of the economic incentive this creates? If approved it incentivises masternodes to vote against funding anything, the funds go from belonging to the treasury to belonging to masternode owners. Masternode owners aren't that dumb, all proposals that have tried to reward them from the budget in the past have been shot down in flames and for good reason, it's impossible to make impartial decisions when you have a vested interest in the outcome.

The governance system exploits that, masternode owners are rewarded indirectly for making decisions based on what benefits the whole network. Take that away by rewarding masternodes directly from the budget and you might as well throw the whole governance system in the trash.
I get the impression you read the thread title, but not the actual post.

When handing out money, the last thing it should be is impartial. That is the reason the greatest governance system in crypto has had such abysmal results. It should be very partial. It should require great scrutiny. It should be painful to hand out money, so that better results are likely.
 

forro

Member
Apr 13, 2019
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Wouldnt this just damage the already greatly battered price, increasing the offer of dash will cause add even more pressure to perform and bigger pain if not. Because now you have an extra 1000 or more DASH released even if its at the hands of DCG. I also dont see DCG becoming more productive just because they have an extra cushion of DASH on the back burner. If that was the case, why not just give them all the budget for the next 3 months and expect miracles on the price and product deliveries. So I am not sure how not burning the excess dash will make any real difference.
I'm not sure why you think this will mean more money for DCG.

Yes, excess dash is burned, but the vast majority of cycles it has gone to dubious proposals with zero ROI, because MNOs believe they shouldnt waste it, so they think they should spend all of it.
The excess will now go to MNOs. They will be more stingy and require better proposals with more transparency and accountability from proposal owners.
The monthly bonus will also encourage more masternode creation, locking up more dash in MNs, reducing available supply, driving up price.
Two great benefits from one small shift in incentives.
 

strophy

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Feb 13, 2016
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Is this proposal based on a misunderstanding of how the treasury works? You stated:
leftover treasury funds are not created, and will be mined in the future
But this is factually not true. While it is true that leftover treasury funds are not created, they will also not be mined in the future. Not creating these treasury funds effectively reduces the current and final Dash coin emission. Forcibly creating these coins now would increase the amount of circulating Dash, which brings with it a corresponding negative impact on price.
 
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forro

Member
Apr 13, 2019
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Thanks for the correction. It would have been great to have your participation earlier. No, in the end that makes no difference to this proposal. I encourage you to read the entire post and you will understand how incentives shift perspectives and behavior. This adjustment intends to put 'skin in the game' for MNOs in the treasury system. If they can gain a small bonus for exercising some fiscal discipline, we will start getting results from the treasury. More MNOs will come to vote.
 

stan.distortion

Active Member
Oct 30, 2014
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More MNs may come to vote but only to vote "no". This proposal shifts the basis of their incentives from allocating the Dash network funds to allocating "their" funds. Anything paid out is effectively taken from MN owners pockets, it's funds they would otherwise receive. This sets a very bad precedent imo, it shifts governance decisions from what benefits Dash as a project to what benefits MN owners personally.
 
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p5yc071c

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Oct 10, 2016
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Imo this proposal (MNO Funded treasury) is trying to address one part of this issue.....the hope vote problem... mno's not adequately researching proposals enough. The other parts of this problems I see with the current implementation of the treasury system are the voter participation and the lack of centralized decision making. (herd of cats)

Another way to think about it is like fixing the hope vote problem is encouraging people to vote no on more proposals, and fixing the voter participation is encouraging more yes votes....like upward or downward pressure on the proposal system as a whole....

Lately we've had way too much downward pressure- resulting in Dash Watch, Dash News and other proposals that I would consider important have struggled to pass in the last few years....

So both sides of this issue presents a problem...but there's a distinct possibility that Adding downward pressure (encouraging more no/abstain votes and discouraging voting) with a more direct incentive....might make things worse...like much worse. There are other ways to address this issue: https://app.dashnexus.org/proposals/dash-town-hall/overview

In the history of government systems....can you provide a single example of a system that had a decision making body/position that had the ability to vote themselves more money, and did NOT do so?