Dash Core Team Q4 2016 Summary Call

[kot]

Dear Dash Community Members,

On behalf of the Dash Core Team I would like to invite you for the Q4'16 quarterly call to discuss project progress, summarize Core Team activities and answer your questions.

The call will take place on Thursday, 9th of March at 15:00 UTC on our WebEx channel: https://meetings.webex.com/collabs/...G5YCLAAIFBDLK43Z1RYTMS-10JSD&rnd=107525.69592
There are 100 places available in our virtual meeting room. The call will be recorded and shared on the forum.

Agenda:

1. Welcome and Introduction
2. Software Development Report
3. Business Development Report
4. Marketing and Communication Report
5. Project Organization Report
6. Project Finance Report
7. Summary
8. Q&A

Feel free to prepare and submit your questions earlier, here in this thread or you will have an opportunity to ask your questions during the call (this time we are planning live Q&A session).

Thank you
Robert Wiecko

 

[Stealth923]

My question - I know the entire team is busy with other business developments and Evolution. Is there any way we can be proactive to finish off the Mycelium and ProtonMail opportunities?

If we dont keep momentum they will fade away and be forgotten. They are valuable services that will benefit Dash greatly.

What is the core team doing to help finalise/accelerate these projects and be proactive to ensure they don't forget about us!

I know delays and hold ups can be on their end and not ours and definitely understand this can happen, we just need to offer our assistance where possible.

Thanks!

 

[TroyDASH]

Relative to other lead core team members, in recent months we haven't heard very much from Evan publicly except for very major release announcements. Could you clarify what is Evan's role on the team, and is that role going to be changing going forward?

 

[Blazin8888]

I am sure Evan has been hard at work as usual. He will be speaking in Arizona from what I gather @TroyDASH

 

[oaxaca]

Back when I interviewed Evan on a podcast in what seems like a lifetime ago, he laid out a vision for the fee structure under Evolution. The plan was that 90% of the users would pay zero fees while the top 10% of the users based on volume would cover the entire transaction cost. Is this plan still alive? If so, it would create a flood of users to the system.

 

[RichardAO]

Evolution Features Questions:

1. When a user has enough Dash in their "Account," will Evolution be able to automatically start a Masternode for them at their request?

2. Can the network, from the treasury, pre-purchase ownerless Masternodes to sell to users as per question 1 above?

3. Can the network, from the treasury, purchase and run its own servers for Masternodes instead of renting from existing providers?

4. Can users in the Evolution Masternode "pool" vote their shares on proposals such that a majority within the pool creates the singular Evolution-Masternode vote?

Thank you all for your consideration. I hope some of these ideas make it into our final product

 

[oaxaca]

1. When a user has enough Dash in their "Account," will Evolution be able to automatically start a Masternode for them at their request?

Starting a masternode on a VPS requires a little hands on. One must rent a server from a host, set it up, etc. This is not automagic.

 

[Gi01]

I'd like to discuss about budget. And i have created this proposal: The bank. Tell me if I have to post it elsewhere.

Prerequisites

1 - Fees: I understand that in order to avoid trolling & spamming a fee is necessary. When originally created, a fee was about 15-20$ with dash in the 3-4$ range.
Right now it's close to 250$, not a trivial amount. We should lower it, or anybody but who's relatively sure to get the upvotes won't propose anything, and it's bad business

2 - Change rate. Indeed, the budget needs a sort of fixed rate. Whoever got a proposal in the last months got "rich". I am extremely happy for them (and indeed, it could have been vice versa... or not?), but i think we can improve the system. I am also sure that the last week was crazy and we'll not see a price spike of this magnitudo again (or again - maybe not?), but we can still do something smarter.
Here is my proposal, that is easier than it looks. Please spend few mins to read it.

When a person asks for a portion of the budget, we should use (until we are fairly more mainstream) a price in $/€ and then discount the price. Say that i want to do something that will cost 1000$. Rather than putting "23 dash", i'll ask for 1000$. The system will discount 1000$ by (say) 15% (this can be adjusted. 20%? 5%?) and convert the price in dash according to common sense (last 24h weighted avg or so). Say 21 dash.

Now, what will happen when the superblock is paid?
a) Dash went up by 15%+. In this case, the proposal owner got all the money he asked for, or even a little nice extra. The effect is MUCH MORE mitigated than in the case of no discount.
b) Dash went up by 15%- or went down by 0 to -15%. See point 3 of my idea
c) Dash went down by more than -15%. Again, go to point 3

Budget 2.0

3 - Treasury bank. There is a loose amount of money that is literally unaccounted/uncreated every single month due to superblock not being used 100%, that can be used in a much smarter, transparent and easy way and it's related to the above situation

The Bank will be funded by 2 different stream
a) It will get ALL the loose change of the monthly budget. If it was 6000 but just 5000 being used, put 1000 in the bank
b) A monthly proposal to integrate the bank to a certain level that is connected to point 2 above.

The bank will cover the 15% fluctuation of the price. So it's extremely easy to estimate how much money the bank should ask for, every month. Again, please follow me - it's expensive just in month 1

Month1: the bank is at 0 and budget is 6000 Dash. The 15%+15% (if the price collapses!) cover is therefore 1800 (this will actually lower the budget for this month, but make the math easy).
Bank gets 1800 dash.
Month 1 budget finalizes. 4000 dash to fund projects are given; 200 are unused. Given the discount rule, bank has to integrate 500 dash with current prices.

Bank balance: 1800-500+200=1500

Month 2: Budget is 6000 dash, the 15%+15% is always 1800. But bank has 1500 balance. Therefore will ask only for 300 this month.
At the end of the month, it has to integrate 200 dash. Also 400 are unspent. Bank balance is therefore 2000.

Month 3: Bank balance is > max usage. Therefore, Bank won't ask for any money
(And so on)

In case the price goes down >15%, the bank will cover just the 30% (15% from initial discount, 15% to cover the exchange rate risk). Exactly as in the case of a major increase in price, the contractor will risk if dash goes down. But, in this case, 15% (on a monthly basis!) is mitigated. Not a trivial amount!

 

[Gi01]

Q&A

Who manages the bank?
Theoretically, it could be automated. There is no decision process involved, it's just basic math. However, if the automatic setup takes time i am perfectly ok that is managed by core team (Ryan?) for a while.

What if bank goes to 0 Dash?
It means that dash price went down by more than 15% for all the proposal made (even the ones done on the very last minute). The bank will simply have to be refunded again the very next month

What if the bank keeps getting money?
This means that the price goes up more than 15% every month, or that a large portion of the budget is unused. Extremely unlikely; but in this case MN owners can decide pretty easy what to do with the excess money. How? With a simple proposal in the budget system. Say that the bank balance is 3000 dash (1200 above worst case scenario). We can fund some extra projects, donate to charities, give an extra bonus to all masternodes once a year, whatever. Can't even figure out how many possibilities are there.
Please notice, that right now this very same money is burned/unspent!

What are the main advantages?
I see several
- Many people are complaining that right now a lot of proposals are calculated at a price level that made rich the contractor. They took the risk, but in this case it's extremely more fair to the budget owners, AKA the Master Nodes
- On the other side, some contractors might be worried that the price goes down and that they lose good money. This mitigates by an hefty 15% the possibility to lose a single penny; gives more stability, attracting even more skilled people that love dash, but still needs to pay bills and rent with old good $. This will create a positive feedback loop.
- We don't lose a single dash created in the budget, something that pisses me off a lot
- Even if price flies, we'll use the money in the bank for extra projects or something good
- PR & Communication. Volatility is one of the main concerns surrounding cryptos. This way, we'll solve an issue that is actually perceived, adding another bullet to our well-loaded gun

Disadvantages
- Indeed, it may take some time to develop, but seems very basic and much simpler than to create all MN infrastructure
- Minor centralization before the system is automated; it's still such minor power (all rules are written with MN consensus) that i wouldn't even worry about it
- ...dunno?

 

[RichardAO]

Starting a masternode on a VPS requires a little hands on. One must rent a server from a host, set it up, etc. This is not automagic.

Well then how about my other points, re the treasury buys vps services en masse for resale behind the scenes for users? Perhaps a technician can be hired for the task of initial hands-on setup, and when task complete, the "automagic" can take place.

 

[lynx]

Well then how about my other points, re the treasury buys vps services en masse for resale behind the scenes for users? Perhaps a technician can be hired for the task of initial hands-on setup, and when task complete, the "automagic" can take place.

The only thing "the treasury" can do is distribute money. All the other things must be done by people. I don't see why would someone hired from the blockchain would perform any better than existing or future masternode providers. And since a masternodes' profit pays for itself, it's not like this is a service that needs subsidies anyway.

 

[RichardAO]

@lynx
Im not altogether ignorant of how the treasury works. Im promoting ideas. Can you improve on my ideas by making corrections which help? If you disagree with my ideas, you can simply say that, or better yet you could refrain from commenting

 

[lynx]

@RichardAO

I assumed, since you asked, that you wanted your points addressed in this thread. Nevermind, then.

 

[ec1warc1]

Question: I have heard on Amanda's videos that when Dash Evolution is out, there will be a feature in the wallet for coins to be gathered together from different users and create master nodes so that such long term deposits can pay interest based on Masternode income. Shouldn't such a feature be voted on before it is offered or even mentioned?

 

[TroyDASH]

Question:
Decreasing block rewards in Dash implies that interest rates for masternodes will approach 0% as time progresses. I have heard potential investors react to this negatively -- making the argument that the Dash economy resembles a ponzi. Could you explain the model for how Dash will remain sustainable amidst the decreasing block reward? It has been suggested that additional revenues to the network will come from transaction fees or fees for other services. This is possible, although the percentage of the entire market cap of the network coming back in as revenue remains to be seen. When the block reward becomes very small, do you expect that fees for services will provide a competitive interest rate? In the long run, do Dash-denominated interest rates even need to be able to compete with fiat-denominated interest rates in order to have a sustainable network with properly aligned incentives?

The reason I ask this question is that I feel that many accomplished investors are very used to thinking in terms of fiat currencies which have infinite inflation instead of cryptocurrencies which have a maximum supply, and they may be hesitant about Dash for the above reason unless they understand the path forward for long term sustainability.

 

[GeauxSheaux]

Question:
Decreasing block rewards in Dash implies that interest rates for masternodes will approach 0% as time progresses. I have heard potential investors react to this negatively -- making the argument that the Dash economy resembles a ponzi.

The ponzi scheme concern has been a common worry from people ever since deflationary currencies came into existence (Bitcoin, et. al.), and I don't blame these people at all. But let's define ponzi scheme:

"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme." -Wikipedia

"Regardless of the technology used in the Ponzi scheme, most share similar characteristics:
1. A guaranteed promise of high returns with little risk
2. Consistent flow of returns regardless of market conditions
3. Investments that have not been registered with the Securities and Exchange Commission (SEC)
4. Investment strategies that are a secret or described as too complex
5. Clients not allowed to view official paperwork for their investment
6. Clients facing difficulties removing their money" -Investopedia

Now let's see if that fits Dash/Bitcoin/Cryptocurrency:
-Does cryptocurrency have a central authority? No.
-Does cryptocurrency pay returns to its investors? No.
-Does cryptocurrency require an ever increasing flow of money to sustain it? No
-Guaranteed promise, consistent flow of returns regardless of market, secret strategies, or obfuscation? No

So cryptocurrencies don't fit the definition of a ponzi scheme. Can they be "bubbles"? Sure! That would just mean that irrational human investors have mis-allocated too many funds into the cryptocurrency space. As of 3/4/2017, $24 billion dollars have been poured into cryptocurrency. That very well may be an overestimation of the value provided by decentralized public ledgers that result in an asset that is fungible, scarce, divisible, durable, and transferable. But it fails to meet any of the criteria of a ponzi scheme.

EDIT: I'll let the devs talk about masternode incentives when rewards approach 0

 

[fible1]

Also interested in how masternodes will remain incentivized when the block reward approaches 0 or becomes very small.

 

[GlobalTech]

Would it be possible for the network to earn fees from sources other than transaction fees at some point? For example, as I understand it, the Evolution upgrade will include some sort of online store. Could vendors be charged fees for using this service, which could then be added to the existing block reward?

 

[oaxaca]

Regarding investors seeking future "interest" payments when block reward is decreasing. First, the term "interest" is obviously incorrect and should be abandoned.

The model for Dash (and most other cryptos) is that the reduction in new coins generated will be supplemented by increasing transaction fees. Both of these will change very gradually, almost imperceptibly. Every day, investors face a decision. Do they acquire new nodes, keep the nodes they have, or close the nodes and seek greener pastures. Every investor has different assumptions and goals. This is the important point. When the number of masternodes decreases, the block reward increases for those remaining. When more masternodes go online, the reward decreases. Every day, month, or year there will be an equilibrium reached.

Problem solved.

 

[Jmmon]

My thoughts on some of these cool ideas:

1. When a user has enough Dash in their "Account," will Evolution be able to automatically start a Masternode for them at their request?
2. Can the network, from the treasury, pre-purchase ownerless Masternodes to sell to users as per question 1 above?
3. Can the network, from the treasury, purchase and run its own servers for Masternodes instead of renting from existing providers?
4. Can users in the Evolution Masternode "pool" vote their shares on proposals such that a majority within the pool creates the singular Evolution-Masternode vote?

Here's my 2 duffs (worth $0.000000856!)
1. I think the plan with the "savings accounts" is anyone can start a masternode from the pooled funds.
3. This might also lead to centralization. As Dash rises, MNOs are more likely to localize their server instead of trusting it to a third party provider. If they want to have someone manage their nodes, competition should decrease price and increase quality of server providers.
4. I've heard this is the plan and this would be cool. One thing to note is more people voting means votes are less powerful and voters are less likely to educate themselves when they hardly affect the outcome.

The bank:
1 - Fees
2 - Change rate. When a person asks for a portion of the budget, we should use (until we are fairly more mainstream) a price in $/€ and then discount the price...The system will discount 1000$ by (say) 15% (this can be adjusted. 20%? 5%?)...
3 - Treasury bank. There is a loose amount of money that is literally unaccounted/uncreated every single month due to superblock not being used 100%...

Great idea! I love the bank idea. Here's my thoughts (not that you asked!):
1. High fees are good and bad. Higher barrier to enter, but also helps keep proposals serious. I do wish proposals that pass would automatically "unburn" the burnt 5 Dash fee as to save some budget funds.
2. I think it might be simpler to skip the 15% thing. How about you choose Dash or $$. If the price goes down and the treasury needs more funds, it can pull from the bank. If it has extra funds, they go into the bank.
3. There are a lot of burnt funds that could be resurrected to give the bank some starting Dash, including all past unused treasury funds and all burnt 5 Dash proposal fees.

...There will be a feature in the wallet for coins to be gathered together from different users and create master nodes so that such long term deposits can pay interest based on Masternode income. Shouldn't such a feature be voted on before it is offered or even mentioned?

This is a fair point. This feature will increase node count and therefore reduce node payout. I personally think the upside will outweigh the downside as it provides a good incentive for regular people to stop banking at central banks and start being their own bank with Dash. This would surely boost the price of Dash, and the price increase would hopefully be enough to keep current node operators happy. I would vote for it, as I think it would vastly increase the value of Dash.

Also interested in how masternodes will remain incentivized when the block reward approaches 0 or becomes very small.

Blocks will be created for the next 100 years or so, so even if there isn't a solid plan yet, there's plenty of time to work on it! I think the current plan is fees will slowly fill in as block rewards decrease.