Building the Dash DAO

[JulioDash]

Hi everyone. I'd like to invite you all for an interesting discussion. I have attached a PDF version of this post which I think will be more pleasant to read. Please click on the Building The Dash DAO v11.pdf link at the end.

(Below is my best attempt at showing this PDF's contents in a forum post, apologies for any formatting errors).



Building the Dash DAO

Dear Dash community,

This post is my first official contribution to Dash. First of all, I’m thoroughly impressed with the level of professionalism in this community, especially when compared to other coins. Buying into Dash was easy, good liquidity; setting up the masternodes and understanding how they work was also a breeze, thanks to the documentation on atlassian. I’ve had excellent conversations with other masternode owners at the #MNO-ONLY channel on the Discord App, and if you are one and are not there, I highly recommend joining. These folks are sharp! Special thanks to @TroyDASH, @thedesertlynx, @JGCMiner and @TaoOfSatoshi for reviewing and for the excellent contributions. (Disclaimer: opinions presented in this document are strictly my own.)

I am in my 40s, have a background in law, business and IT. I studied in a country with civil law as its legal system, which wasn't very useful when I moved to common law countries like the USA. I worked at big banks for many years, climbing the corporate ladder, then moved on to consulting, entrepreneurship and finally investing. I've got a few IT certifications too as I enjoy studying and they certainly helped in my corporate years. I like to focus on the big picture, and it is within this context that I would like to contribute to Dash. The few masternodes I've bought costed me 6 digits each; so, for my standards, I am heavily invested and hope to contribute as much as possible. I would like to live in a world where everyone enjoys the benefits of cryptocurrency and also would like to make a return on my investments; hopefully these goals are not mutually exclusive.

Before we begin, I recently got permission to share publicly this Dash Core Organization Chart that I worked on (initially for my own use). I wanted to thank everyone from the Core Group that helped me create it, especially @QuantumExplorer.

Here it is:

https://www.lucidchart.com/invitations/accept/5fb6d2ef-ebd8-49df-a2e5-f6af06eda2ef
Disclaimer: This chart is not an official document from Dash Core Group, is subject to change at any time, and is not guaranteed to be accurate.

Every Core team member that I spoke with couldn't contain their excitement for the project. Dash Core Group feels like a cohesive entity, with a well-defined work culture, and they do have laser focus on the upcoming Dash Evolution. I am so thankful to be given the chance to participate in all this at such an early stage.
I have a few interesting things to discuss with you all today, particularly on how to improve our Dash DAO, so let's get right to it.



The Dash Network Effect.

During my research, I considered the invention of the DAO one of the most important aspects of Dash and a revolutionary concept. The implications of Dash's positive feedback loop are profound, as illustrated in this chart made by Ryan Taylor for the Miami conference in early 2017.

I’ve spent some time trying to understand what the DAO really is, and I'm going to propose a slightly different way to see it that, in my professional opinion, will dramatically improve its efficiency.

The common idea is that the Dash DAO will fund other DAOs. Evan Duffield said that Dash Labs would be another DAO, Dash Core and Dash Force News are also often referred to as DAOs. The sharp folks at #MNO-ONLY Channel on the Discord app proposed we start using the term DFO (Dash Funded Organization) to separate between the Dash DAO and other organizations funded by it. This is an accurate and valid distinction, but in a way shows that the DAO is just a budget. It is a pretty amazing Decentralized and Autonomous budget, that can be used to do incredible things, including funding other companies, but it is just a budget - not an Organization.

Now please take a step back and come to the "high level" with me. We are now at 10,000ft, where the small details don't matter, only the big picture does. At this altitude we can safely talk about trends, processes, flows, where we are, and where we want to go, without being bogged down in details. For this to be productive, please stay abstract and on the high level. If I get some details wrong at 100ft, try not let it prevent you from seeing the big picture.



A slightly different way to view the Dash DAO.

Everyone knows DAO stands for Decentralized Autonomous Organization, but let's recap to make sure we are all on the same page. Decentralized means, at a high level, that no single person or group has control over it, or that control is dispersed and not concentrated. Autonomous means that it does not depend on any other entity; it has its own source of funding, and cannot be shut down. Also, cannot be shut down if leaders decide not to operate anymore. We will get to Organization later.

In this general sense, only the Dash Budget itself is autonomous because its funding depends on nothing but the protocol. An entity that depends totally or partially on money from the Dash Budget is not itself autonomous. We could disagree about semantics here, but we can all agree that the Dash Budget is on another level of autonomy when compared to an entity that depends on it. So, at 10,000ft, there is only one DAO in the Dash ecosystem, and it is "the Dash DAO". Today, you call it the "the Dash Budget". It is the only truly autonomous and decentralized entity. All other entities we call DAO today (Dash Core, Dash Force, Dash Labs) are not autonomous because they're either dependent on the Dash DAO, their own profits, or donations. They are also not as decentralized, but more on that later. Finally, unless the budget allocation changes on a protocol level, there will always be only one DAO. Creating another is not possible without protocol changes, because 100% of the budget goes to the existing DAO.

Point #1: There is only one DAO: the Dash DAO. It is the only truly autonomous entity because its funding comes directly from the protocol. It is also the only truly decentralized entity, or at least the entity with the highest level of decentralization.



Technologies are bound to become obsolete.

I invest in other cryptocurrencies but the bulk of my portfolio is in Dash. In my opinion, it has one of the most professional teams in the industry, and what appeals to me the most is the possibility of becoming a self-funded business. InstantSend, PrivateSend, low fees, 2mb blocks, these are all great features, but they're means to an end. A 2mb block by itself is not important; what's important is that it allows us to process more transactions. Other currencies have found (or will find eventually) ways to process far more than we do at the moment, some even without using any blockchain.

Consider the following:

I was hesitant to include this as it opens doors to low-level discussions, but there is an important high-level issue that cannot be denied: another technology will make Dash's current technology obsolete. If this hasn't already happened, it inexorably will. (Errors in this image, the fact that it only mentions TPS, and the fact it isn't considering Evolution all don't matter for our high-level discussion.)

Technology can be copied or duplicated, especially open-source. Dash copied and improved upon Bitcoin. PIVX forked Dash and also changed a few things. A company tomorrow can come up with an exact copy of Coke, or even a better tasting beverage, but what are their chances of getting a significant portion of Coca-Cola's market share? Slim, because it’s never about the product, it's always about the business. Please remember that: it is always about the business. And what is the business? It is the vision, brand, leadership, team, public image, customer service, work culture, partnerships, network distribution, patents, intellectual property, supply chain, logistics and so on. The product matters only in a few industries, and generally only if it can be patented. Dash is in an industry where the product matters even less, because even if we patent a software solution to a problem, we are only patenting that very particular way to address it. (The details on how software patents work do not matter for this discussion).

What makes Apple valuable is not their products (software or hardware); these are obsolete in a year or two. What is valuable is their business, and it's what makes it possible for them to come up with new products every year, and quickly adapt to new market conditions. Given enough time, the chances of current blockchain technology becoming obsolete are 100%, even for Dash Evolution. What if Hashgraph is indeed the future, and makes blockchain technology obsolete? If we don't have a business to adapt and all we have is an obsolete technology, we won't last very long. If all we have is the technology, what happens when a competitor comes up with a better version?

Technologies come and go, but well-formed businesses adapt and survive. Satoshi Nakamoto invented blockchain; look how many thousands of coins copied his idea (including us). What is the one thing that cannot be easily copied? Our team, structure, brand, community, partnerships, vision, work ethics, ecosystem... these are all also essential elements of the organization we need to build, in order to safeguard our future against technologies we cannot yet foresee. We need synergy, not disconnected teams.

Point #2: We have to build the Dash DAO as a proper organization and fully departmentalized, because technologies become obsolete, but well-run business can adapt and thrive.



Competing against VISA, MasterCard and American Express.

Dash aims to one day compete with the global giants of the payment industry. Although we might have a better product in the future, when Evolution is out, we will have to compete not only in technology, but also in all other areas of business. There will be lawsuits, patent disputes, aggressive marketing campaigns, poaching of our talented staff, lobbying to legally keep us away from certain markets, and so on. Make no mistake: these companies are not here to lose. They will protect their market share aggressively and by all means necessary; they have a fiduciary responsibility to their shareholders to do so.

If we do not structure ourselves properly, when we meet these companies for a fight in the marketplace, we will lose. If you bring a "product" to a "business" fight, you will always lose. You can make a cheaper and easier payment solution than the one provided by American Express, but you cannot compete with their business model, sales, marketing, legal, and incentive structures. It is in our best interest to become fully departmentalized under a cohesive and efficient organizational structure, so we can fight the battles at all levels. These companies have been competing for market share every day, for decades, in every field, and they are ruthless.

The Dash ecosystem will always need marketing, operations, accounting, software development, legal, finance, auditing, payroll, creative services and so on. The current thinking is that different companies and teams will provide this service, and be paid from its budget, much the same way Dash Core Group does today. The Dash DAO is in a unique position as it can be way more than just a Decentralized Autonomous Budget. It can be a truly Decentralized Autonomous Organization, something the world has never seen before. This is within our grasp; all it takes is for us to start seeing it as an organization and not as a budget.

Here is a chart to help you visualize what a fully departmentalized Dash DAO could look like:

https://www.lucidchart.com/invitations/accept/ad9452ec-f9d7-4a92-90ee-0f6e22a8e43e
Disclaimer: This chart is not an official document from Dash Core Group.

Point #3: A well departmentalized and fully formed Dash DAO is needed in order to compete with VISA, MasterCard and American Express. Not only in technology, but also in all other areas of business. If we just have a "product", when we meet them for a "business" fight in the free marketplace, we will lose.

Now let's talk about masternodes and how we make decisions.

 

[JulioDash]

The Masternode network.

At a high level, masternodes are shareholders and also part of the Board of Directors (B of D). If you haven't heard these terms before, shareholders participate in the company profits (they don’t make decisions) and the Board of Directors is a group elected to make decisions on behalf of shareholders. Dash’s case is particularly interesting, because if you have a masternode you are automatically both. Masternodes are the de facto controlling entities of the network because they control the budget, and therefore can de-fund any entity, department, or person that depends on it. (We could argue what "control" is, and that masternodes share it with miners, merchants and users. Or we could argue masternodes are not truly shareholders, as they don't participate in the profits. Both don't matter at the high level, please stay abstract with me.)

The Masternode concept is a terrific idea. It allows governance, PrivateSend, InstantSend, and provides incentives to run full nodes. Evan Duffield's brilliant idea has so much impact in the crypto space that it has been copied all over. You can see a list of other coins with masternodes here: https://masternodes.pro.

I am currently both a shareholder and a member of the B of D in traditional companies that have nothing to do with crypto currencies. As a shareholder, I don't get to make decisions; I only participate in profits. You can buy your way into a shareholder position, all you need is money. As part of the B of D, I help the business by voting on broad decisions, supporting executive duties and voting on the budget (in very simple terms). I do not have granular information about the business because such info does not flow all the way up to me; it stays within team leaders, managers and directors. You cannot buy your way into the B of D; you must be elected by other shareholders to make decisions on their behalf.

Executives and Administrators of large companies are highly qualified individuals, workaholics by nature, with specific personality traits, brilliant academic results, professionally trained, and hardened by years of experience. They work 15h/day digesting a huge influx of information from all parts of the organization, and they are expected to make good decisions on a continuous basis. They are highly paid, have the right personality, education, training, practice, contacts, all the information... and still make mistakes. Pick just one item of this list, like information for example. Masternodes are bound to make (unintentional) bad decisions just because they don’t have enough information, they don't know all the variables. Please look at the Dash Core Organizational Chart again. How many people do you know? What are they working on? How much do you know about their priorities, projects and ideas? How much do you know about how all projects intersect? And this is just the Dash Core Group, imagine a fully formed Dash DAO with all its departments.

Point #4: Masternodes do not have all the variables necessary to make decisions on a granular level. These should be reserved for team leaders, managers, directors and executive to make, because they are the most technically competent and have the most information.



The bad news: anyone can buy into Dash’s Board of Directors.

Remember the distinction between a shareholder and a member of the Board of Directors: shareholders participate in the profits and don’t make decisions. Anyone can become a shareholder, you only need money. A member of the B of D is elected to make decisions and generally do not participate in profits. I recently bought a few masternodes myself, and as a new member, I am now expected to vote on proposals. Even if I chose not to, the important thing is that I can.

The bad news for everyone is that I am technically incompetent to vote on the majority of proposals being presented, let alone the ones that are coming. In some cases, I know for a fact that I am incompetent, in others, I’m just tricked by my own psychology into believing I could cast a competent vote. The term incompetent is being used here (and throughout the rest of this post) not in its informal, demeaning way, but strictly as "lacking technical competency". If there is a proposal to raise the current block size limit from 2mb to 4mb, my vote would also be an incompetent one. Should we spend millions on this marketing initiative? I have no idea.

Non-technical proposals like Business Strategy, Partnerships and Marketing are even trickier because these feel like common sense, but they most certainly are not. Few people might have an opinion on a highly technical proposal, but everyone has an opinion on these three. This is not something that we can fix; it is part of human nature.

An Administrator, a Business Strategist and a Chief Marketing Officer see these areas in a completely different perspective than an untrained person. They see things you don't, they anticipate problems you can't imagine. Again, it is the thing you don't know you don't know that makes all the difference. It is a mistake to think non-technical proposals are all common sense and do not require professional knowledge, especially in a $10 billion entity like Dash.

Also consider the fact that anyone can buy a masternode and join the Dash Board of Directors. There is no restriction on age, education, background, experience or intentions. Even if you imagine the network today as a homogeneous entity composed of qualified renaissance individuals, with vast experience in all areas of life, you have to face the inevitable fact that it will not stay that way. The masternodes lacks competency to make decisions at a granular level, and it does so by its very nature, not through fault of their own. Any group of thousands of people from different ages, backgrounds and experiences would, by definition, lack competence at these levels. Again, I am using the term competency in a precise way, meaning the ability to do something efficiently. Just because we can make decisions fast and uniquely in a decentralized way, does not mean these decisions are even close to being efficient.

I want to make it clear that it is not about the people; even if the thousands of masternode owners were all Nobel Laureates, they would still make bad choices at this level as a group, because they can't all be competent in all the areas needed to run a successful business.

Point #5: The Masternode Network is not technically competent to make granular decisions. It has nothing to do with the people, and everything to do with the decentralized, democratic, dynamic, and heterogeneous nature of the entity.



The good news: Dash has already solved this problem.

The good news is that this is not much of a problem. The Dash Core Team is, at a high level, the IT Department of the Dash DAO. We trust the leadership, vision, culture, employees, work ethics and so on. In this context, we trust them to do whatever needs to be done, whatever way they see fit. They have a manager, a budget, a plan and in a way, they report every 3 months to the Board of Directors (masternodes) via quarterly calls. We don't micro manage them; we are not even aware of what's going on at 1000ft, 100ft, 10ft.

Here is the Dash Core Group Organization Chart again. This time, I want you to think of them just as a Software Development company. Notice how professional and well organized they are...

https://www.lucidchart.com/invitations/accept/5fb6d2ef-ebd8-49df-a2e5-f6af06eda2ef
Disclaimer: This chart is not an official document from Dash Core Group, is subject to change at any time, and is not guaranteed to be accurate.

Even if you don't know much about company structure, you can surely appreciate the job Mr. Taylor and his team did there. They even have their own version of a Board of Directors: it is called "Core Leadership Team", and it’s composed of 6 individuals from different areas (marked in green). As stated before in Point #3, it will be hard (really hard!) to compete against gigantic global entities like VISA, MasterCard and American Express without a proper organization. There is a synergy between departments in a well-run organization that cannot be beaten by isolated teams, with different work cultures, working independently. Realistically it's just not going to happen. Even if we have a better product, they will beat us at everything else.

Today, whether you are aware of it or not, the Dash DAO already delegates most of its important decisions to the Core Leadership Team. Imagine how bad things would be if IT decisions on Evolution or Core C++ wallets were brought up to the masternodes to vote, just like business strategy and marketing proposals currently are. Imagine if uncoordinated and independent teams were working on the different parts of Dash Drive and the Dash API, just as they are today with business strategy and marketing.

Point #6: Dash already delegates most of its granular decisions to the Dash Core Group Leadership Team.



Scenarios, practical examples, and real analysis.

If you are a masternode owner, I know these last paragraphs might have caused you to be agitated. I am sorry. I am one myself and I too would love the idea that I can make decisions on what a $10 billion organization should do. Believe me, I would love for this to be competitive and efficient, but it just isn't.

Let's take Ben Swann's Dec 2017 proposal as an example because I think it illustrates the point quite well.
https://www.dashcentral.org/p/Ben-Swann-Reality-Check-Relaunch

Ben's proposal was for roughly $1MM for a reality TV show sponsored by Dash. Ben is a talented and controversial journalist and his proposal can give Dash exposure to a large crowd. If I got any details wrong here remember they don't matter at 10,000ft, please stay at the high level with me.

Questions for you:

- Do you know for a fact if $1MM is reasonable?
- If someone says it should have been $100,000, would you be able to articulate why it shouldn't?
- Alternatively, if someone says we are getting a $10MM deal for only $1MM, would you be able to validate this claim?
- Do you know how to measure the success or failure of this proposal?
- In case of failure, do you know what steps we can take to mitigate the damage?
- If someone says we shouldn't associate the Dash brand with Ben Swann because he is too controversial, would you be able to articulate why this is or isn't a good thing?
- Do you know how this marketing initiative fits into the broad Marketing strategy for Dash?
- How many hours of your time have you spent studying Ben, his proposal, and the impact on the brand, before voting to spend $1MM?
- How many hours do you think other masternode owners spent doing the same thing?
- Do you know if the format of the sponsorship is appropriate?

Ben has provided a contract:
https://drive.google.com/file/d/1A46VvzMiAyhhUpdYVolu9eGhcAXaDih5/view?usp=sharing

- Do you know if there are any flaws or clauses that might hurt Dash or be unfair to us?
- Have you read the contract in full and evaluated it yourself, or did you just trust that someone did?

While continuing to stay at the high level, would you agree with me that even if you voted with absolute confidence because of your precise technical expertise in this area, there were other masternodes who casted incompetent votes? I have no shame in admitting I too lack competency, and don't know any of these answers. If a marketing professional was sitting next to me asking questions in the same form, he/she would make our ignorance on the subject even more explicit.



Making a decision on Ben’s proposal without consulting the masternodes.

Now let's evaluate this in a more positive scenario. A decision on Ben's proposal will be made without consulting the Board of Directors (masternodes). I am aware Dash Core has hired a Marketing firm, but work with me anyway. Stay with me at 10,000ft; at this high level we only care about the process of decision-making.

Imagine the Dash DAO is formed. A CMO is hired to run Dash Marketing, he/she has multiple sub-departments and a whole marketing team. Instead of bringing the proposal to the Board of Directors (by submitting it for voting), Ben's team approaches Dash Marketing directly. The offer is thoroughly analyzed by a competent team, and after deliberation, they believe we should move forward. So, they work together with Ben to polish up the details. Dash Marketing asks Ben to remove a few things that might unintentionally be bad for the brand. In the meantime, a sub department finds out it can get similar exposure for 25% less, so it asks Ben's team to adjust the total, and they agree. Ben's contract is now forwarded to Dash Legal and a few clauses are added to safeguard the partnership and our investment. Dash Marketing recommends to Dash Executive to move forward with the proposal. Dash Leadership Team (currently Dash Core Leadership) approves and it is acted on immediately as Dash DAO already has a budget allocated for marketing this quarter. The end.

How much more confidence would you have in this process compared to what we have today? Remember one more time that this is not about particular decisions, it's about the decision-making process.

 

[JulioDash]

Asking the right questions.

I've shared snippets of this document with a few masternode owners and they came back with very intelligent questions and comments. Here are just a few:

"Wait, what about the masternodes? They're not consulted on Ben's proposal."
The Board of Directors was not consulted because this decision is not on their level and because they're not competent to make it. If you feel like going back to 100ft and arguing that this should have been submitted to the Board of Directors because of its value, just replace Ben's $1MM proposal with Dash Soccer Team for $20k or imagine one for $20MM.

"But I do my due diligence and I should be allowed to vote all proposals"
Great point; please try to see the big picture. Even though you have a degree in Marketing and can evaluate the impact on the Dash brand, even though you are also a lawyer and can analyze business contracts, even though you have years of experience negotiating million-dollar proposals, there is no way to allow just you to vote. You have to take my vote too, and even though you are competent in this matter and I am not, my vote counts just as much as yours. When a Dash proposal reaches $50,000 or its numbers are in the thousands, Dash DAO will inevitably organize itself in departments. Decisions will inevitably be delegated to more competent entities, but we should strive to make it happen before, because it is in our best interest.

"So, what would masternodes do then?"
Our Board of Directors will do exactly what other Board of Directors do: appoint leaders (CEO mainly), approve budgets and vet major decisions (with support of Executive, not on their own like today).

"But if masternodes don’t make most of the decisions, then we will no longer be decentralized".
This is an excellent point. Today, most of the decisions are not made by masternodes anyway, they’re made by the Dash Core Group Leadership Team. Having said that, it is true that an entity where most decisions are in the hands of thousands is more decentralized than one where they are in the hands of just a few. Decisions will be far less competent and efficient, but undoubtedly more decentralized. It boils down to what level of decentralization do we really want or need, and what are the trade-offs we are prepared to pay. We can most definitely have a decentralized organization with a CEO, as long as the masternodes still control who occupies this position. The level of decentralization we will have with a fully formed Dash DAO and a CEO will not be much different than what we have today with Dash Core Group and its CEO. We will keep the same level of decentralization while making huge improvements in competency and efficiency.

"Does Dash even have enough funds to become fully departmentalized today?"
Yes, it absolutely does. The cost of hiring 50 new employees at $100,000 per year is around $6 million per year ($5MM in wages + $1MM in benefits and other costs). Nonetheless, let's imagine it doesn't. What should we do? We prioritize and departmentalize what we can with the resources we have, like any other well-managed business. Dash is fortunate to be in a position where it has more money than it knows what to do with, but this might not always be the case. I also believe we should be saving for rainy days but I'll leave this topic for another time.

"You are an anonymous person on the internet and a new member of the community. Why should we trust you to be an advisor for an $8 billion-dollar organization?"
Let's address these points one at a time. Why I decided to stay anonymous? I travel often to South America and still have family there. I have a few masternodes now, which makes me upper middle class in most first-world countries, and makes me part of the elite in South America. I am afraid of being kidnapped or that something might happen with my family, therefore I will continue to stay anonymous. Even if I and all my family were all in a first world country, I would still be hesitant to announce that I have millions in cryptocurrencies. Why should we trust you to be an advisor for Dash? I am just a member of the community and although I am giving my professional opinion I do not claim to be in any advisory role. Please exercise discretion, be critical of my ideas and debate with your peers and with other members of the community. Also, I am not asking for money and this document would not be any more or less correct depending on who I am.

"Dash will lose autonomy. It's better to have multiple companies working without a shared leadership"
There is no reason why a department can't have autonomy within an organization. I have witnessed it many times in my professional career. Departments like Research & Development operate with substantial levels of autonomy, and because they are under a well-formed organization, they can access all of its resources. HR when they need to hire, Finance for paying for goods and services, Payroll for paying employees, Operations when a new office is needed, IT for more technical infrastructure, Communications for press releases and so on. Independent companies will need to have mini versions of all these departments and won't be able to easily tap into the main organization's resources.

"Why change something that is working so well?"
Because of how ambitious the Dash vision is, and because the real challenges are yet to come. What got us this far will not be enough to take us where we want to go. We now have way more money than we know what to do with, and throwing money at an inefficient structure will not improve it. Every successful business is efficient and competitive… until it isn't. Technologies become obsolete, new competitors enter the market, legislations are passed, consumer preferences change… The insanely competitive crypto industry does not change every few years, it does so every month. Good leadership anticipates market changes and adjusts businesses to be ready for the challenges that are yet to come. We can either make these changes towards efficiency when we start losing (and the market forces us), or we can make them in advance and keep winning.

"Dash is a community and if we will cease to be one if we departmentalize"
Big companies like Apple, Nintendo and tesla all have a very active community contributing with new ideas and projects. The Dash community will continue to exist just as it is today, if not better. Community projects like small sponsorships and meetups can still be funded, with the only major difference being the decision to move forward will not come from thousands of anonymous individuals, but from an executive, director, manager or team leader within the Dash DAO.

"What if the CEO and his team start doing things we do not agree with?"
This problem exists today. What if Dash Core starts making technical decisions that the masternodes don't agree with? The only option I have read so far is to de-fund its budget and create a new Core, so we can apply the same principle to the Dash DAO. If you are still on the high level, you'd agree with me this issue can occur in both cases. If the Board of Directors are not satisfied with how Marketing decisions are made, we simply communicate it to the CEO or COO and they deal with it like any other large organization. I do not want to get into details as they’re not important in our high level discussion, but I feel this will be a sensitive topic so here is an alternative to de-funding: during the formal and informal incorporation of the Dash DAO, we can put a clause that if a proposal asking if "the CEO should step down" is passed, he is removed from his position and no longer have authority, again like other large organization. (The exact details of this clause do not matter for us right now)

Another point I would like to address is that some of you might have an unintentional emotional attachment to how things are today. Please do not interpret this in a negative way. Because I joined Dash recently, I do not have this emotional attachment (yet). However, I am human just like you, and would probably feel the same way if I was in your position. You joined way earlier, when no one else believed in the project. You watched its market cap grow from thousands to billions. You started voting on small proposals and now you are deciding how to allocate millions every month. It is a great feeling. I understand where some of you might be coming from and I truly respect your hesitancy to change. I am going to refrain from commenting on emotional reasons here because it is just not the right media, but I'll be happy to chat privately.

I am sure there will be many other great questions. If you have one, please try to stay at the high level and avoid getting bogged down in details. You can contact me on the Discord App (JulioDash) or via email [email protected].

Now let's go over another scenario regarding Ben's proposal and change things a bit.



Ben’s proposal again, but this time consulting the masternodes.

Let's re-imagine the same proposal, but this time consulting Dash's Board of Directors.

Ben's proposal is for $10MM instead of $1MM. The numbers don't matter, let's just say the decision is too big or too important that executive has to consult the board. Everything happens exactly as before: Ben's proposal goes through Marketing, Legal and Leadership Team. Now, instead of being acted upon, it is presented (posted to be voted) by the Dash DAO (and not by Ben) to the Board of Directors (masternodes). That means and address controlled by the Dash DAO will be the one paying the 5 DASH fee to ask the question to the masternodes. It also comes with an opinion at the end: here is the proposal, here is what we thing we should do, here is why. Masternodes deliberate, debate and do everything that they already do in dashcentral or elsewhere. No escrow necessary since funds will be paid to the Dash DAO first, then paid to Ben by Dash Finance, after the contract is signed with Dash Legal. Notice how escrow is a natural consequence of a good business flow. If we have more yes votes we move forward, if not we don't. The end.

How much more confidence would you have in this scenario when compared to what we have today?



Summary.

Are you still here? Thank you sincerely for reading this far! Also, if my examples offended anyone, I am truly sorry. Discussions can get heated and passionate especially in such an exciting project like Dash. I tried to be as polite, honest and straightforward as I can, while still getting my point across. Sometimes we hear things that affect us on an emotion level and our first reaction is to reject it or get defensive. This is normal. How are you feeling right now? If what I said made you feel defensive, consider taking some time off and coming back to this post after you've had time to process.

In any case I am very thankful for the opportunity and for being able to contribute. Even if nothing changes after this post, I would still be a happy member of the community because I trust things will eventually move towards what was proposed.

Let's recap the points we made so far:

Point #1: There is only one DAO: the Dash DAO. It is the only truly autonomous entity because its funding comes directly from the protocol. It is also the only truly decentralized entity, or at least the entity with the highest level of decentralization.

Point #2: We have to build the Dash DAO as a proper organization and fully departmentalized, because technologies become obsolete, but well-run business can adapt and thrive.

Point #3: A well departmentalized and fully formed Dash DAO is needed in order to compete with VISA, MasterCard and American Express. Not only in technology, but also in all other areas of business. If we just have a "product", when we meet them for a "business" fight in the free marketplace, we will lose.

Point #4: Masternodes do not have all the variables necessary to make decisions on a granular level. These should be reserved for team leaders, managers, directors, and executive to make, because they are the most technically competent and have the most information.

Point #5: The Masternode Network is not technically competent to make granular decisions. It has nothing to do with the people, and everything to do with the decentralized, democratic, dynamic, and heterogeneous nature of the entity.

Point #6: Dash already delegates most of its granular decisions to the Dash Core Group Leadership Team.

I hope I managed to present these points well and remember they were made to be considered at a high level, where details and exceptions do not matter.



The proposal.

I’d like to put up a proposal to the masternode network, asking essentially the following:

"Should we form a truly departmentalized Dash DAO" (Yes / No)

The wording might change but essentially, we will be asking whether we should have a fully departmentalized entity that would run most, if not all, areas of business. The most natural step would be for Dash Core Group to be considered "the" Dash DAO, with all team members having their positions "bumped-up" from Dash Core Group to Dash DAO. For example, Mr. Ryan Taylor becoming Dash DAO's CEO, a current Project Manager for Dash Core becoming Project Manager for Dash DAO, etc.

Other entities might still be created and funded directly from the protocol, especially in areas where autonomy is either highly desired or legally mandatory. However, essential areas of business will be administrated by the Dash DAO.

Note:
One of the criticisms I have received about this document is that it should have included Dash Core Group's opinion. I have spoken with them but will respectfully refrain from making any comments until they chose to make it public. What I will say with confidence thought, is that their management is on another level of professionalism, lightyears ahead of everything else I've seen in the crypto space.

 

[JulioDash]

A bright future ahead.

Let's imagine how things might look for Dash in a not so distant future. Remember the technicalities and details still don't matter; we will continue to stay at the high level all the way to the end of this post. Ready? Let's go.

1. The proposal passes and the Dash DAO is formed. It will not yet be a legal Corporation or LLC but for all intents and purposes, it will. The Dash Core Group becomes the Dash DAO. Technically Dash Core stays the same, but in practice and within the Dash Ecosystem, they are now the Dash DAO.


2. Dash DAO hires experienced Administrator, a COO (Chief Operating Officer), to help build the organization and all the its departments. For those not familiar with the term, the CEO is the leader and visionary, the COO runs the organization and make sure it keeps up with the CEO's vision. Back in the days when Steve Jobs was CEO at Apple, Tim Cook was his COO.

3. During transitional phase A, while the organization is still being formed, everything works exactly as it is today, with proposals presented directly to the masternodes. As departments begin to take shape, they gradually start to evaluate and give their opinions on proposals. If we have a partial Marketing Department and there's a proposal to create a Dash Hockey Team, Marketing would give its opinion on whether we should go ahead or not, and why. It's ok if they can't or chose not to evaluate everything at this stage. Masternodes continue to have the final say and vote normally. Funds still go directly to whoever posted the proposal.

5. During transitional phase B, departments are formed and proposers are encouraged to contact Dash's departments directly. These will have discretionary budgets and independence to act based on criteria laid out by the CEO (i.e. on proposals less than $30k). If a proposal is vetted and the department has a budget, it is acted upon right away (companies are paid, contractors are hired, etc.). If they still don't have a budget or if the amount is in excess, the Dash DAO will put up the proposal to the board of directors (masternodes) requesting funds. Funds will be paid to the Dash DAO itself, and them redistributed to the appropriate department or paid to appropriate companies by Dash Finance.

6. During transactional phase C, departments are well formed, small and medium proposals all go through Dash Departments directly. 95% of the proposals open for vote are posted by the Dash DAO itself, because it's budget contains all of the proposals from all the different Dash Departments. Anyone is still free to post any proposal up for vote, but now not only it's getting more and more expensive but masternodes are strongly suggesting proposers to contact Dash Departments directly.

In the final phase D, the Dash DAO is fully formed. It's being studied by the Harvard School of Business and featured in all major business publications. It can handle a huge amount of "proposals" and we stopped calling it that; they're just projects within the Dash DAO. The Board of Directors are approving large quarterly budgets fueling the unstoppable power of a true Decentralized, Autonomous and now finally structured Organization. Our coin is at $75,000 each. We are way bigger than PayPal and we are not only easier to use but also easier to do business with. The Dash Organization can compete with VISA, MasterCard and American Express in all levels: Technology, Marketing, Legal, Business Strategy, and so on. We can also lobby at the same level too. And because we have a superior product, we are taking their market share at an ever-increasing rate. Integrations are quick and smooth, marketing is effective and cohesive, our legal team is top notch and a reference for the whole crypto industry. We have patented some of our super advanced hardware solutions that came out of Dash Labs. Dash has physical offices all over the world and customers are delighted by our outstanding 24/7 global support line.

As we watch the Dash Super Bowl ad on our OLED TVs we dashed from Amazon.com, we are filled with joy and gratitude to have been able to participate in this amazing project.

Let's make it happen and much success to us!

Julio
[email protected]

 

[Dandy]

I must commend you for the effort that you put into this.
I read maybe 25% for now and I have to set aside some more time to go through it all before I can really comment, but you did raise a lot of very important points.

 

[TroyDASH]

I would urge everyone to take the time to read through this. This is an important governance decision. I think the argument is compelling, and I fully support this proposal.

 

[TanteStefana]

Finally, someone thought this through, and the last post is a perfectly do-able path to success. I have been so frustrated because I have no idea if my vote will be for waste or actually help. I would like nothing more than for a group of specialists to make these decisions and make sure they are in line with Dash's vision. I'm sure core doesn't want this added responsibility right now, but the way you've outlined it, I think it could be done. Once again, it's the simplest solution to a complex problem. That always makes me happy

 

[mastermined]

I agree with most of the doc but with slight modifications which you may consider major modifications. Without said modifications I would vote against the proposal in current form for reasons I will lay out below.

Most everything that was said is how things should be run now and how things were setup to run. Core pledged early on to only take up around 70% of the budget and and leave the rest for community projects. The money is there to do what you propose but the problem is that Core has failed to scale to your model. Dash Force has also failed to scale with the price increase. Any organization would probably fail to scale with the recent price increase, this will not change anytime soon. For that reason alone I would not support putting all our eggs in one centralized basket and expect them to scale so quickly, it is impossible.

95% of the proposals open for vote are posted by the Dash DAO itself, because it's budget contains all of the proposals from all the different Dash Departments. Anyone is still free to post any proposal up for vote, but now not only it's getting more and more expensive but masternodes are strongly suggesting proposers to contact Dash Departments directly.

I agree with most everything up until Phase C. The one change I would make is to keep it at 30% for community based projects, there is room for compromise on the percentage but for phase C that is around where it should be or the proposal would not get my support.

I would also keep that 30% or something very close to that in Phase D or whatever the final phase is. The reason is because core is not perfect and can’t always scale fast enough and that is where the community can come in and fill in the Gaps (no pun intended) where core fails. It is the best of both worlds and a win win.
Core and their various departments could still vet the ~30% of community proposals and give their opinions but it would be up to the masternodes to decide. It would also allow proposal owners who think they are being ignored or treated unfair by core to take it straight to the masternodes for a vote therefor keeping the Decentralized part of the DAO intact.


Overall I love what you have laid out but without the changes I proposed I would not vote for it.
Basically it is exactly what you propose but just leaving a sizable percentage for grassroots community projects. I think that is the perfect winning formula and I think core agrees.

 

[JulioDash]

@TanteStefana and @Dandy
thank you for the nice comments.

@mastermined
Excellent point, I am glad you brought it up. It is important to separate where we are today from where we want to be. I do not think is fair to say Dash Core failed to scale. It was not their role, and they have definitely structured themselves in an excellent way in all area they should be held accountable.

Yes, I agree with you that no organization is perfect and the community should come in and fill in the gaps. I also agree that is a win-win. There should be no reason why community proposals should stop; Dash has a great community and it should continue to help as best it can.

I do however respectfully disagree with your last point about leaving a sizable percentage for grassroots community projects. If we ever experience constraints in our budget, I would prefer if the Dash DAO administrators were the ones in charge of choosing how to better allocate resources. I would also strongly object to allocating a fixed percentage of the budget for anything.

Thanks again for your reply.

 

[mastermined]

I do however respectfully disagree with your last point about leaving a sizable percentage for grassroots community projects. If we ever experience constraints in our budget, I would prefer if the Dash DAO administrators were the ones in charge of choosing how to better allocate resources.

I don't know what percentage is right but 95% to core is too much. If they say they need more (than 70-80%) the masternodes would decide if they get the extra or if community projects are needed first. Core usually waits until the last week or so to make sure they don't bump anyone out. If it was a tight budget cycle core could put in a budget knowing it would bump others out. Then the masternodes would have to decide if core made the right call. Or core could submit 2 proposals with one that did not bump out any proposal or at least not the very popular ones. I'm just not comfortable giving core 95% control and definitely not full control. I don't think they want that anyway and would reject it.

 

[JulioDash]

@mastermined

Oh I see now where the confusion is coming from. When I said in that hypothetical scenario that "95% of the proposals come from Dash DAO", I didn't mean to imply that this was a constraint, but rather just a consequence of an efficient budget. In general, money flows towards the most efficient and productive departments in an organization, so if we ever had 95% of the budget being used by Dash DAO that would be a great sign that things are going extremely well, and that's what I wanted to show in the scenario. Compare it with 95% being used for community projects and you'll see the point. It can totally work with other percentages too, as you suggested. If we reach phase C, small community projects will have negligible impact. That doesn't mean we should stop supporting, funding and promoting them, it just means the impact will be minimal compared with what the Dash DAO will be doing.

 

[Vedran Yoweri]

you talk a lot.

 

[daf]

Very stimulating proposal, thanks for your work. Also, thanks for the (unofficial) Dash Core organization chart, I've been looking for this for ages... It should have been made officially available by Core a long time ago. We should not need to struggle to get this kind of document.

 

[Plateglassarmour]

I like the ideas you are presenting, but I have some additional thoughts for potential improvements.
I would also like to hear from Core before getting too much further in the process, since we would be heavily relying on them, and if they can't scale faster at the moment (which I suspect is true), it would be poor timing to try to advance your idea.

First, the ability for some portion of the budget (decreasing as we move along your stages, but never disappearing entirely) to remain dedicated to it's current control scheme; if someone has an idea that doesn't fit with the structure of the core group because it is novel, and doesn't fit into any of the core group's departments, I always want someone to be able to come directly to the masternodes (albeit at a steadily raising cost).

Second, specific turning points at each of the stages you presented, where we can vote again to move forward, or remain at the current stage, in the event of organizational scaling problems or unforeseen structural level difficulties.
This would necessitate each stage being stable taken by itself, but from what I can see that is already pretty much true.

Third, a dedicated platform for greater transparency between the proposed departments and the masternodes.
The current level of communication with core (quarterly, with an hour of question time) works after a fashion for our current structure, but would be totally inadequate for masternodes to make the department level decisions you are advocating for.

I know some of these are "lower level" decisions, but the details of things like communication would be massively important to the success of your idea, and I don't see how we can get much further without fleshing some of them out.

 

[solarguy]

The Dash Core Team has definite thoughts on improving the governance structure. They have their hands full at the moment working on Evolution. I think we are about to have a robust and productive conversation about governance. I would be unwilling to vote yes for this proposal until I can see a fairly granular description of what Core has in mind. Imposing anything on the Dash ecosystem without considering their viewpoint and ideas would be foolish. I'm not suggesting at all that JulioDash's pre-proposal discussion is foolish.

But clearly, JulioDash has a vision for how to insert more expertise into the treasury/governance process. Regardless of the exact means of achieving that, it is absolutely necessary that we do it.

 

[GrandMasterDash]

Oh God, I could not disagree more with this large manipulative piece of shite.

Let's see. First we are clouded with Core's inability / unwillingness to communicate well with MNOs. Not least the "top secret" nature of Evolution. And "too busy" with Evolution to be bothering with other things. Now, it's our fault for being ill-informed / incapable to make decisions on everything. Well fuck, why do we have "abstain" then?

"Anyone can become a shareholder, you only need money."
Exactly, much like the brilliance of ICOs, where finally, you didn't need to be an "accredited investor" to be on an equal footing with the big boys. And guess what, governments stepping in and "regulating" ICOs, because we can't be trusted to make our own independent good (or bad) decisions.

"The Masternode Network is not technically competent to make granular decisions. It has nothing to do with the people, and everything to do with the decentralized, democratic, dynamic, and heterogeneous nature of the entity."
It has everything to do with people. Looking back on proposals that passed or failed, it is patently clear that MNOs are already voting on people they trust / have influence. Duffield, Taylor etc are all trusted, until we de-fund them. In essence you want to make it near-impossible to de-fund this all-encompassing business. Outrageous.

"it will be hard (really hard!) to compete against gigantic global entities like VISA, MasterCard and American Express without a proper organization"
Well, I guess you must be correct then, because despite having many fully paid staff, somehow, we have that horrid trolling mess called monero nipping at our heels. How did that happen?

But yeah, we have the likes of VISA stifling innovation by disabling wavecrest.. how did that happen if this tiny speed boat called "dash" can't compete?

I do wonder why you bought masternodes, knowing you couldn't or wouldn't be making decisions. It's a package deal, comes with the territory.

"Imagine how bad things would be if IT decisions on Evolution or Core C++ wallets were brought up to the masternodes to vote"
Oh, you mean like Blockstream? We should trust Core to implement SegWit? If you don't know, don't vote or abstain.

"Ben Swann... Do you know for a fact if $1MM is reasonable?"
Do I know for a fact that Core is not wasting money when it's operations are necessarily top secret?

How about that we break up Core instead of consolidate? Seems to me Core is attempting something of a takeover. How long did we hear, "we're too busy with Evolution"? Yep, good, let them concentrate on Evolution and scaling, and then let us have a Core2 that can build an alternative interface and ramps to dash. Let there be two competing Cores regarding front-end and integration.

Before we consider monolithic structures of old, can we create a marketplace for proposals? Let MNOs set their own proposal fees, where they can submit one proposal per cycle for just one dash. That gives them an incentive to form their own micro-business, to receive, review and submit proposals on behalf of their clients. Similar to Green Candle, except we encourage that marketplace. That, to me, would be a much clearer picture of a Decentralized Autonomous Organization.

 

[GrandMasterDash]

If this goes forward as a proposal and passes, I am sure it would cause a bitcoin-like fork, the very thing dash was supposed to be immune to.

 

[GrandMasterDash]

Being you don't feel competent voting, I am curious if you was competent setting up VPSs and masternodes? I mean, if you wasn't confident with such procedure, then perhaps you are using one of the third party masternode services? In which case, you willing gave up your votes to someone else anyway. But if you did want to vote...

 

[GrandMasterDash]

Did it ever occur to you, the onus for a proposal to pass is also shared with the Proposer to clearly explain why, for example, a 2MB increase is necessary? Poorly explained proposals don't pass (mine included). As a Proposer, I accept this responsibility. Equally, I respect the outcome.

 

[jimbursch]

This is an extraordinary document that deserves serious consideration -- well done @JulioDash !

First, I want to strongly discourage you from submitting this as a proposal to the budget system. I do not believe referendum proposals are effective or meaningful. For example, I view the proposal to increase the block size as a joke that is trotted out to brag about Dash governance. It is at best an opinion poll and nothing more.

What you are proposing needs to be rolled out as a series of funding proposals, incrementally building the departmentalized organization that you envision. This document can be a roadmap, but not a budget proposal.

There's a contradiction that is confusing me a little.

Point #1: There is only one DAO: the Dash DAO.

You rightly point out that the true DAO is the budget system.

Point #2: We have to build the Dash DAO as a proper organization

What you are proposing (a departmentalized organization) does not fit the definition of a DAO -- it is neither distributed nor autonomous. It is simply another Dash Funded Organization (DFO), albeit the most significant.

I will have more commentary, but I am inclined to support the idea of a well-formed departmentalized organization to serve Dash.