Pre-Proposal: Solving the 'Free Money' treasury problem

If there is unspent dash at the end of each Treasury cycle, what should be done with it?

  • Nothing, I think the treasury is working great as is.

    Votes: 4 28.6%
  • Give it to masternodes. They should feel all the pain of spending it.

    Votes: 4 28.6%
  • Split it 60-40 between masternodes and miners. It is more fair.

    Votes: 6 42.9%

  • Total voters
    14
  • Poll closed .

forro

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Solving the 'Free Money' treasury problem:

Other than funding developers and some early progress in venezuela, the Dash treasury has proven largely ineffective over the long term. Anyone being honest and objective can see that. Millions and millions of dollars worth of dash has been handed out with little to show for it. The status quo is not working, and a higher dash price would only increase the waste in dollar terms.

Since Masternode Owners/Operators see the treasury as 'free money' or 'other people's money', it is spent poorly. There is little transparency and accountability, and results are minimal and nothing on the horizon will change that. If MNOs see the money as coming out of their own pockets, they will spend the money more wisely.

All it would take to cause such a shift in perspective is to give the leftover dash at the end of each cycle to the MNOs (or split with the miners). In an effort to make sure there are some dash leftover at the end of each cycle they will be more likely to downvote proposals with a low potential ROI, and stop funding familiar names who put in little effort for a very nice income. Some folks are earning enough Dash to put up a new masternode every year, year after year, for doing next to nothing. Are you ok with that? How does that make Dash look to outsiders?

If leftover funds are given to masternodes (or split with miners), only very high quality proposals would get funded. The treasury would actually become more effective, as proposal owners would have to create better proposals, and to get refunded they would have to be more transparent and show good results.

With one small adjustment of incentives, the entire perspective shifts and quality goes up. As a bonus, the small amout of extra income for MNOs makes holding a masternode more attractive, so more MNOs would become long term holders, with less masternode turnover. More MNOs would start voting, and over time all that participation would produce a savvy set of voting MNOs.

Some feel that the leftover dash should be split 60-40 to match the eventual block reward split. Personally I'm good with either option, as long as one or the other is implemented. We must take a step forward from the status quo. The ineffective free money spending has to be brought under control before the price rises significantly again.

I would like to submit another proposal to make the change, 60 days from now. As I already spent my own dash on such a proposal in the past, I will only submit the next one if the community donates the required 5 dash fee. If you are in support of making the change, please send your donation to:

XsJ3UXy7Jz9gEUKtNPiuMyS37rEk1RZPan

If 5 dash is raised, I will submit the more popular option based on the poll. If 5 dash is not reached or the status quo wins, I will burn return whatever funds are received.

Ps: If you are a member of any closed discussion platforms such as discord, please do what you can to get those folks here to have the discussion in the open, transparently, as it should be.

Thank you.

Thank admins!

Edit: Donated funds will be returned to sender, rather than burned.
 
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hipnotic

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I would like to draw your attention to a post I made on reddit recently. It addresses many of the issues you are outlining.
It's titled "The next generation of Dash governance (and issues with the current one)". I cannot post the link here so go find it.

However, it does not answer your poll question. My initial reaction to the options present is that none of them are good. How about whatever isn't spent rolls over into the next budget where it is available to be spent?
 

qwizzie

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I used to be for distributing the leftover funds of the budget to masternodes and miners in a 60-40 ratio just to get a more clear picture on our total Dash ever to be generated (also that option seemed more fair to miners). I even suggested distributing the leftover funds only to those masternodes that actually have a voting history, so it can be used as a tool to increase dash voting participation among masternode operators.

Now i am starting to wonder if addressing the leftover funds of the budget by either distributing it to masternodes or by distributing it to masternodes and miners in a 60-40 ratio, could have unintended side effects on the masternode operators voting behavior. Keeping the leftover funds of the budget as is (burned) seems like the safer option, untill we discussed all possible side effects of the other options.

Also i don't think that addressing the leftover funds of the budget, will have a very large effect on the current shortcomings of our budget system as stated in the first post (poor spending, little transparency and accountability). I just see it as getting a more clear picture on our emission rate schedule and possibly a way to increase voting participation among masternode operators (if we only distribute it to masternode operators with a voting history, which by the way could also have unintended voting behavior among masternode operators).
 
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qwizzie

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I would like to draw your attention to a post I made on reddit recently. It addresses many of the issues you are outlining.
It's titled "The next generation of Dash governance (and issues with the current one)". I cannot post the link here so go find it.

However, it does not answer your poll question. My initial reaction to the options present is that none of them are good. How about whatever isn't spent rolls over into the next budget where it is available to be spent?
The diffference is that your post focus on shifting voting power away from masternode operators, towards a few choosen 'Dash Executives' and seems intend on by-passing the Dash governance system completely. While forro's post focus on the budget leftover funds and ways on how to distribute those or not. forro does this through a pre-proposal discussion thread and is contemplating on making a decision proposal for this. In other words, he is working within the Dash governance system.

Your Reddit post and his pre-discussion post could not be more apart from each other. They are literally worlds apart.
 
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hipnotic

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I apologize for the misunderstanding. I am definitely NOT proposing we bypass the dash governance system. Not with regards to getting the proposal implemented, nor within the proposed system itself. The dash masternodes are, and will always be the final authority. I'm sorry if I failed to make this clear, the intention of my post was to get a discussion going that could result in getting the support of DCG, and having a formal proposal presented to the masternodes.
 

forro

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I used to be for distributing the leftover funds of the budget to masternodes and miners in a 60-40 ratio just to get a more clear picture on our total Dash ever to be generated (also that option seemed more fair to miners). I even suggested distributing the leftover funds only to those masternodes that actually have a voting history, so it can be used as a tool to increase dash voting participation among masternode operators.

Now i am starting to wonder if addressing the leftover funds of the budget by either distributing it to masternodes or by distributing it to masternodes and miners in a 60-40 ratio, could have unintended side effects on the masternode operators voting behavior. Keeping the leftover funds of the budget as is (burned) seems like the safer option, untill we discussed all possible side effects of the other options.

Also i don't think that addressing the leftover funds of the budget, will have a very large effect on the current shortcomings of our budget system as stated in the first post (poor spending, little transparency and accountability). I just see it as getting a more clear picture on our emission rate schedule and possibly a way to increase voting participation among masternode operators (if we only distribute it to masternode operators with a voting history, which by the way could also have unintended voting behavior among masternode operators).
The status quo is definitely the safer option, but the results so far speak for themselves. We are in the 30s. It matters. Outside of funding development, all other efforts have proven to be ineffective in adoption. The slide will continue. Even if evolution comes out, the MNOs will continue to fund ineffective projects. We must make a change.

So, let's consider the possible direct effects if this passes (whether all MNO or split with miners):

1. Voting behavior doesn't change: I doubt this would be the result.

2. MNOs say yes to more proposals: I doubt this would happen, either.

3. MNOs say no to more proposals. I think this is the likely effect. This is actually the goal.

We are giving the MNOs a direct incentive to come along and vote no on any proposal that doesn't look good to them, however they may decide that. In hopes of getting a bonus at the end of each cycle, MNOs will be more likely to vote no. Even MNOs who have never voted before will become an active participant, even if to just vote no and get that sweet bonus. However, we don't have to worry about them downvoting everything all the time. Like you and I, other MNOs have significant money tied up in Dash. We care about Dash and we care about our investment. If we didn't we would have sold off already. We know we must at the very least make sure our developers are paid, and I think all MNOs understand that.

I think a very likely scenario is that DCG's 60% would be safe. The current cycle has 5325 dash up for grabs. With those numbers, with DCG taking 60%, there will be 2130 dash up for grabs. With about 4825 masternodes, that means if all MNOs voted no on all remaining proposals, they would each get 0.44 dash. It's not a huge amount of money, and it's not supposed to be. What is important is the shift in perspective, from 'free money' to 'my money', encouraging some fiscal restraint, having a beneficial effect over the long term. We're really only raising the bar just a little bit, but the bar is definitely being raised.

Each MNO will ask, is this guy really worth getting a cut of my 0.44 dash this month? Has he really been beneficial to the network? Will his proposal increase the value of my holdings by more than 0.44 dash in fiat terms? Facing the reality of many more no votes, a proposal owner knows he will have to try harder to show that he is worth it. That's all this is. A simple adjustment of incentives.

The masternode count will likely go up by a few as well, taking more dash off the market and increasing the network's total scalability.

Before we branch out into other solutions to increase the effectiveness of the treasury, such as adding layers of bureaucracy, we must first make sure incentives are aligned properly at the core. This adjustment is simple, requires no trust, and likely is not difficult to code.
 
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xkcd

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Is this the same as the MNO plan, but without the cap increase to 20%?
Also, I won't be sending you DASH, but for those that do, if you don't raise enough, why not send it back to the address that sent it to you (refund) you know how to use a block explorer don't you? Also, just in case you decide to 'burn' the dash which I am quite sure you don't know how to do, can you please post the burn addresss here? You might want to look up 1CounterpartyXXXXXXXXXXXXXXXUWLpVr so you actually know what you're talking about.
 
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forro

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Is this the same as the MNO plan, but without the cap increase to 20%?
Also, I won't be sending you DASH, but for those that do, if you don't raise enough, why not send it back to the address that sent it to you (refund) you know how to use a block explorer don't you? Also, just in case you decide to 'burn' the dash which I am quite sure you don't know how to do, can you please post the burn addresss here? You might want to look up 1CounterpartyXXXXXXXXXXXXXXXUWLpVr so you actually know what you're talking about.
Thanks for your comment, the snark you put into it gave me a laugh. To your first question, It was inspired by @rick, but I feel the solid logic should be applied to the treasury as-is before any increase. Here is my first comment suggesting the idea, back on January 16, 2020. Here is my first pre-proposal, and here is my first proposal. Note that some folks did not support my proposal, but then supported the exact same concept with the cap increase attached to it under the MNO plan. The 'free money' problem and the cap increase should be treated as separate issues. To your second point, yes, it would be better to return the funds rather than burn them, so we'll do that instead. I'll edit the OP.

Now, are you in support of this concept? If not, why would you support the same idea, but only if accompanied with a cap increase? Is it not better to have discipline before increasing spending?
 
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xkcd

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Now, are you in support of this concept? If not, why would you support the same idea, but only if accompanied with a cap increase? Is it not better to have discipline before increasing spending
Yeah, I am support of the idea, I only tolerated the cap increase under the MNO plan because it came with the key component of funding the DAO exclusively with the MNO earnings. I think you should sign up to Discord and discuss the next steps with @rion and the rest of the group to move this forward. This would give you a better chance of getting MNO support and also working with DCG to some degree is required in the end to make the changes. We don't want another repeat of your initial proposal which is incoherent, not well understood and ultimately not supported.
 

qwizzie

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I think you should sign up to Discord and discuss the next steps with @rion and the rest of the group to move this forward. This would give you a better chance of getting MNO support and also working with DCG to some degree is required in the end to make the changes. We don't want another repeat of your initial proposal which is incoherent, not well understood and ultimately not supported.
Hell no to diverting this to rion and his MNO group and especially hell no to the blattant attempt of moving the discussions to discord-only again. Dash.org/forum and Dashpay Reddit are appropriate places to have this discussion and forro is capable enough to handle this towards a clear and easy to understand decision proposal, if it comes to that.

rion and his group did a pretty bad job discussing the MNO Plan with the Dash community, before launching it on the network. It was not well understood before launch and ultimately not supported after launch. The exact same can be said of the DCG Plan.

Lets not make the mistake of keeping it all behind closed doors between rion, a few masternode operators and Ryan Taylor twice. Lets gather feedback from our official Dash forums (dash.org/forum, dashpay reddit, both discords) for real this time and try to reach and involve as much of the Dash community as possible, before presenting a decision proposal to the network. If that takes time, then let it take time.
 
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forro

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If you are a member of discord or other platforms, your help in reaching out to those users would be appreciated. I agree with qwizzie that this is something that needs to be discussed transparently here out on the open internet. Get those folks out here, please.

Also, keep in mind that it is very unlikely anyone who gets paid from the treasury would support more disciplined spending, including DCG. They would certainly not be happy facing more no votes. It is more likely that proposal owners would use FUD to try to kill this adjustment.

We MNOs who want to see more engagement, transparency, and accountability from proposal owners will need to remember the clear logic of this proposal in the face of FUD claiming that MNOs are so dumb and selfish that we would defund everything every month.

When you hear opponents to this proposal, ask yourself, are they getting paid from the treasury? Are they trying to protect their easy paychecks? The free money problem is real, solving it can only improve results.
 

forro

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Folks, keep in mind I set up this poll so you can change your vote as you see fit.
 

xkcd

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Ignoring good advice is an issue with the OP, keeping the discussion in this haunted house of a forum will likely ensure it doesn't reach enough people to get the votes and unless you are going write the code yourself and have commit keys, good luck get it done even if you get the support, you need to work this in a smart way, so far we are not off to a stunning start. I hope you've learned from past mistakes and are man enough to make the necessary adjustments.
 

vazaki3

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I never vote to polls that do not offer "other" as a poll option.

What "other" could be? A dividend to all the dash community members, for example. Or any other alternative someone else could think.

It is pathetic when the designer of the poll tries to trap the voters and lead them to specific paths. If you design a poll, always give "other" as a poll option, in case of course you want to play fair and not to mislead the voters.
 
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stan.distortion

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Hell no to diverting this to rion and his MNO group and especially hell no to the blattant attempt of moving the discussions to discord-only again. Dash.org/forum and Dashpay Reddit are appropriate places to have this discussion and forro is capable enough to handle this towards a clear and easy to understand decision proposal, if it comes to that.

rion and his group did a pretty bad job discussing the MNO Plan with the Dash community, before launching it on the network. It was not well understood before launch and ultimately not supported after launch. The exact same can be said of the DCG Plan.

Lets not make the mistake of keeping it all behind closed doors between rion, a few masternode operators and Ryan Taylor twice. Lets gather feedback from our official Dash forums (dash.org/forum, dashpay reddit, both discords) for real this time and try to reach and involve as much of the Dash community as possible, before presenting a decision proposal to the network. If that takes time, then let it take time.
100% agree. The totally failure of both the DCG and MNO plans was due to being discussed only on Discord imo, discussions here and elsewhere had zero influence on shaping those proposals.

EDIT: Discord is only a tiny part of our community, Telegram alone has more than a dozen active groups with more than ten thousand members between them and even that is just a tiny cross section of Dash adoption.
 
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forro

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Folks, we really are sliding into oblivion. It does no good to be in denial. All the various projects funded over the years would have prevented it if they were effective. The "other people's money" or "free money" problem is real. We must grant leftover dash to masternodes or split with miners to create a stronger sense of ownership over the funds so they are spent more wisely. Other than keeping our developers paid, the treasury has provided nearly zero ROI after millions and millions spent.
If you are on other platforms, please spread the word on this adjustment. Get them to come and vote. We must solve the 'free money' problem'.
 

Geert

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Forro,

You did not comment on DashCentral on the MNO proposal.
You did not comment on DashCentral on the DCG proposal.
You did not comment on DashCentral on the DCG proposal when it was resubmitted.

How can we take you seriously?
 

forro

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Forro,

You did not comment on DashCentral on the MNO proposal.
You did not comment on DashCentral on the DCG proposal.
You did not comment on DashCentral on the DCG proposal when it was resubmitted.

How can we take you seriously?
Geert, on my first proposal on Dash Central, you claimed that this adjustment was your idea. At that point it became clear you are a troll, and this will be my only response to you. If you decide to continue to troll, that is up to you.

Source: https://www.dashcentral.org/p/Decision-GrantLeftoverFundsToMasternodes
geert
-2 points,5 months ago
"This was originally MY IDEA,..."

You opposed my proposal, but then you supported the same concept when it was attached to a treasury cap increase. You are irrational, and I do not have time to waste on people such as you.

Either you understand the free money problem or you don't. Have a nice day.
 

Geert

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You should have told us whether you supported either plan. This is what you're so passionate about.

IMHO your only interest is in hijacking the debate.
 

vazaki3

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I never vote to polls that do not offer "other" as a poll option.

What "other" could be? A dividend to all the dash community members, for example. Or any other alternative someone else could think.

It is pathetic when the designer of the poll tries to trap the voters and lead them to specific paths. If you design a poll, always give "other" as a poll option, in case of course you want to play fair and not to mislead the voters.
 
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forro

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I never vote to polls that do not offer "other" as a poll option.

What "other" could be? A dividend to all the dash community members, for example. Or any other alternative someone else could think.

It is pathetic when the designer of the poll tries to trap the voters and lead them to specific paths. If you design a poll, always give "other" as a poll option, in case of course you want to play fair and not to mislead the voters.
vazaki3, I understand your desire for an 'other' option.

However, my goal here is focused on creating a sense of ownership over the treasury funds. Currently it is viewed as free money and is handed out freely to ineffective POs. If the masternodes feel like it is coming out if their own pocket, they will be less easy with it, and they will expect more out of the POs. POs will know they will face more no votes if they aren't more transparent and more responsive to community questions and concerns. They will know that they will need to do a better job of showing that they are worth the money they get.

If the MNOs feel ownership over the funds, perhaps more of them will start to vote, more will join discussions, bringing more ideas to the community. Perhaps MNOs decide more proposals should be handled through the dif, where equity and more accountability could be obtained.

The end result will be proposals and proposal owners who will do a better job of adding value to the dash. It will help stop the slide and even bring us back up.

As a side effect, the ROI of a masternode would increase slightly, so the MN count would increase proportionally.

Once the 'free money' problem is solved, I would certainly be open to other ideas.
 

Geert

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Aug 26, 2015
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Forro,

What if every shadowy anon created a decision proposal to change our reward structure? Would that be a good thing? IMHO we need to wait a bit and see what DCG thinks is the best course of action after the failure of both the DCG and MNO proposals. The failure may have been due to the extreme stress most people are under at this time. Maybe they can pass a slightly modified version of the DCG plan (15% max?) after the world calms down.
 

stan.distortion

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Oct 30, 2014
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Forro,

What if every shadowy anon created a decision proposal to change our reward structure? Would that be a good thing? IMHO we need to wait a bit and see what DCG thinks is the best course of action after the failure of both the DCG and MNO proposals. The failure may have been due to the extreme stress most people are under at this time. Maybe they can pass a slightly modified version of the DCG plan (15% max?) after the world calms down.
"Slightly modified" isn't going to cut it, if a major change to the fundamentals of our governance doesn't have overwhelming support then it's not suitable for implementation. Remember when Ryan proposed the DIF should burn funds to pass gains onto all Dash users? That was a no-brainer imo, genius plan but it fell flat on its face. The ideal in some eyes can be total garbage in others, we need to pass any major change by as many Dash users as possible before putting it to a vote otherwise we risk pissing off a large percentage of them.

Something to bare in mind with the quality of proposals, when there where usually funds left over it wasn't a competitive environment, lots of junk made it through. It's a competitive environment now but that's only a relatively recent thing, it's still a long way form establishing norms. That means some plans can be worked out based on how things are working but it should still be done with caution, if left alone it could be working a whole lot differently in the future to the way it's working today.

I'm not saying changes shouldn't be made, just that our hindsight isn't necessarily 20/20 yet.
 

Geert

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Remember when Ryan proposed the DIF should burn funds to pass gains onto all Dash users? That was a no-brainer imo, genius plan but it fell flat on its face.
What are you talking about? There was no vote on burning Dash. The DIF right now has the option and can conceivably burn Dash if a majority of the supervisors decided it was the right thing to do. Buying and burning Dash is the only legal way the DIF can return value directly back to MNOs. People did not understand that this option would only be used if the DIF had more non-Dash funds than it could use. I would guess that amount is north of 100 million dollars.
 
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forro

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Folks, the treasury's 'free money' problem will not go away. Only when we make the necessary adjustment from 'free money' to 'my money' will spending get smarter. Look at nearly any government in the world, where the answer is to 'throw money at the problem'. Extremely large amounts of money are stupidly thrown at various problems with little success. Unless there is more scrutiny, brought about by a sense of ownership, will the spending be smarter.

If we assign leftover funds to masternodes or to a split of both masternodes and miners, smart spending will be incentivized. More questions will be asked, more answers will be demanded, and proposal owners will have to be more open and transparent about their proposals, activities, and results. There is no other way.

If you are active on other platforms, please do what you can to raise awareness on this issue.
 

stan.distortion

Well-known Member
Oct 30, 2014
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Folks, the treasury's 'free money' problem will not go away. Only when we make the necessary adjustment from 'free money' to 'my money' will spending get smarter. Look at nearly any government in the world, where the answer is to 'throw money at the problem'. Extremely large amounts of money are stupidly thrown at various problems with little success. Unless there is more scrutiny, brought about by a sense of ownership, will the spending be smarter.

If we assign leftover funds to masternodes or to a split of both masternodes and miners, smart spending will be incentivized. More questions will be asked, more answers will be demanded, and proposal owners will have to be more open and transparent about their proposals, activities, and results. There is no other way.

If you are active on other platforms, please do what you can to raise awareness on this issue.
Government spending is a great example. Look at the recent Pfizer vaccine approval, the UK minister who set the precedent for approving it has £600,000 worth of shares in Pfizer that went up considerably in value after his decision. That kind of thing happens all the time with government funding, decisions effecting personal gain. Is that the direction our governance should take?
 

forro

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Folks, when the MNOs feel the money coming out of their own pocket, they will expect more transparency and responsiveness from proposal owners. Until that happens, you can expect the same poor results that Dash has experienced.
 

Geert

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We had the chance to pass the DCG proposal, but the MNOs did not bite.

The DIF can help mitigate the free money problem if we insist that entrepreneurs seek funding from the DIF instead of the treasury. As we have seen with Kuvacash and DashRetail, direct treasury funding of for-profit enterprises does not work. The "entrepreneurs" are liable to spend all their time schmoozing the DAO instead of releasing actual products and services.
 
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xkcd

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We had the chance to pass the DCG proposal, but the MNOs did not bite.
it was garbage, they wanted to up the treasury to 20% and only have 60% of that come from MNs! Pfft!
The MNO proposal was less objectionable with 100% coming from the MNs.