How to sustainably grow Dash´s Ecosystem? - Dash Infrastructure Program

SimontheRavager

SimontheRavager

Active member
Dear Dash Community,

we are proud to present you our Dash Infrastructure Concept. We would like this to become an universal community program, synchronize all our decentralized efforts and lead to infrastructure proposals. We hope that this will result in bringing Dash to the forefront of the cryptocurrency revolution by actively starting to own companies and redistribute these profits through the Dash Venture Structure.

Link to the Dash Infrastructure Concept:

https://drive.google.com/file/d/1YbOJc0QxvTjCuD3a2o9RkEuSxr5kUh5L/view?usp=sharing

We want to get as much feedback as possible to form this with you together.

Thank you and please have in mind, Dash is bigger than every single one of us, but together we are one :)

In Dash, we trust.

Your Dash Embassy D-A-CH Team
 
How to sustainably grow Dash´s Ecosystem?

Dash Infrastructure Program

First concept draft to be discussed
in the community


Problems and pains in the current Dash Ecosystem

In our opinion one of the biggest problems in the current Dash Ecosystem is that the Dash DAO spends huge amounts of money on infrastructure projects to integrate Dash as a means of payment in several services without getting any benefits except for the integration itself. Meanwhile other Cryptocurrencies don´t pay a single Cent for those integrations.

We spend a lot of money in projects which might turn their back on us after receiving a funding or use their developments and services for other currencies.

Past voting cycles showed that those infrastructure and integration proposals are still popular, which we guess is because of the impact people believe they will have for future mass adoption. We agree with the general idea, but we also think the current approach is not sustainable. Maybe for Dash as a currency but not for Dash as a DAO.

The Dash community, Dash Core Group and several Masternodes have promoted the idea of “thinking big” for several times. Thinking big is exactly what we are doing and now we want to change the thinking into acting.


What will help to grow the Dash Ecosystem sustainably?

During the last six months working for Dash as Dash Embassy D-A-CH, we experienced that most of the time there is no need to pay for integrations, but in some cases there is. Especially when it comes to those limited enabler projects which are efficiently and legally covering the three important growth parts of a public crypto ecosystem.
  1. ATMs
  2. POSs
  3. PSPs
In our opinion it is important that these three parts are addressed by the general Dash growth strategy, but again we don´t believe simply throwing money at those companies would be the right way. So instead of spending money on those companies/projects without getting anything back, we would like to use money from the treasury to invest in those companies by buying shares and take part in the decisions making in those companies.


Investing in crypto-related infrastructure companies (Active Stakes):

Compared to just spending money on infrastructure companies/projects or building them with treasury funds from scratch we believe there are some advantages by investing in already existing companies:
  1. We will save a lot of time and money by using existing companies and infrastructure instead of creating them ourselves

  2. We will be able to take part in the strategic decision making and influence those companies in the direction that Dash needs them to go.

  3. We will no longer be a replaceable currency but a stakeholder.

  4. We will benefit from all income streams generated by those companies and relieve pressure from the Dash treasury
Our treasury´s massive strength is playing out now because we can start to buy companies. Other coins don't even have a plan to scale or worse, they don't even have funds to pay their developers. Even our largest competitor BCH has only limited money for active development. We are already moving decades away from other projects, if we start to develop our public ecosystem together with partner companies by partially owning them.


CASE 1: Buying into an ATM company/group

We received an offer to buy stakes of an Crypto-ATM Group with the strategic orientation to run ATM companies in several countries of Europe (2 are already running). We could have the early bird chance to get our own “Dash ATM” stakes and/or revenues/incomes and have a real say in the future development of a Dash ATM network in Europe. We would plan to do an extra proposal and ask for funds, if we get into detailed negotiations:

Benefits
  • Massive ecosystem build up in synchronisation with coming evolution releases

  • Standard ATM branding should be at 50% in Dash and 50% in BTC

  • Direct say in an ATM company to have it operate in favor of Dash

  • The stake or revenue sharing contract will be directly legally owned by the Dash Embassy D-A-CH UG and should produce profits very soon and therefore reduces the need for funding from the treasury in the long-term

CASE 2: Buying into a POS/PSP company

We received 2 offers. The first is to buy in an European POS/PSP Startup. The second is to build our own together with partnering companies and their whitelabled solutions. Both opportunities could be our chance to start a Dash POS/PSP company, which will grow Dash´s Ecosystem and provide profits. We would plan to do an extra proposal and ask for funds, if we get into detailed negotiations.

Benefits
  • Massive ecosystem build up in synchronisation with coming Evolution releases

  • Our own POS/PSP, which we can move in the direction we want to and directly manage the merchant access to it through regional Dash Embassies

  • Dash fees must/should be lower than for the other cryptos provided

  • Direct say in the POS/PSP company to move it in the favor of Dash, if we get a major stake

  • The stake will be legally owned by the Dash Embassy D-A-CH UG and should produce profits very soon and therefore reduces the needed funding from the treasury in the long-term

  • Affiliate program for Dash Embassies when they find new merchants willing to use our native in-house Dash POS/PSP.

  • The POS Development will be designed in accordance with the needs of our network

Who will benefit from the stakes and incoming profits?

The incoming profits will be used to fund the expenditures of the Dash Embassy D-A-CH UG to relieve the pressure from the treasury in the long run. This means the Dash Embassy Concept turns from being a cost center to being a profit center. It would be the first time in the history of Dash funded organisations.

As soon as the legal frameworks are ready, we want to transfer a stake to the Dash New Zealand Trust Structure or the Dash Venture Structure, which Dash Core Group has just finished. As soon as massive profits come in, these will also be redistributed to the MNOs via a working Dash Venture profit distribution mechanism.




This document was provided by:

Your Dash Embassy D-A-CH Team


Autors:

Jan Heinrich Meyer (@essra)
[email protected]

Klaus Hipfinger (@SimontheRavager)
[email protected]

Rafael Schultz (@blockchainpunk)
[email protected]
 
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Personally, I'm not so hot on the ATM idea because the incentives for running them basically come down to end user fees. The POS idea, however, I like. Though I there would need to be some kind of mechanism to ensure you do actually follow through with the Dash Ventures part. And I also need some confidence that the necessary people and skills are in place to run the operation effectively.
 
I think both ideas are worthwhile, but it would really just boil down to the market research and projections. The need for a Dash-owned payment processor has come up several times in the past: https://www.dash.org/forum/threads/we-need-a-payment-processor-native.28691/#post-182408

I do appreciate Dash Embassy DACH looking toward becoming self-sufficient as well as doing so in a way that would also enhance its explicit goals and those of the network, that's really an optimal solution and pursuit for a Dash funded organization. I really hope we hear more info about Dash Ventures soon, because there are a number of projects whose success and value to the network will depend upon the precise nature of how that will operate.

The other advantage of these initiatives is that they represent a "test case" for what could emerge as standard operating procedure for all region embassy projects, a model which could easily be transplanted elsewhere.
 
I like it, sounds like it could be part of a greater Dash Ventures strategy to identify all the key players and invest significant stakes in them. I think it would make the most sense when the Dash price recovers into the thousands again.
 
What I miss in the list, although perhaps it won't necessary be labelled as infrastructure, is use cases. ATM, POS or PSP all of these are not services on their own, they are supporting services to enable utility. You don't use a POS to use a POS, you use it to pay for a meal at a restaurant.

For existing use cases in the first world there is literally no reason outside of idealism to use cryptocurrencies over fiat. Because A. crypto is hard to get for consumers due to KYC requirements and B. business owners don't want to hold it because if it goes down due to volatility, it reduces their profit margin (and they will need fiat because taxes will be paid in it for the foreseeable future). At best you will get:
Consumer buys crypto with fiat --> Consumer pays merchant in crypto --> Merchant sells crypto for fiat

Compared to:
Consumer pays merchant in fiat

Crypto does have a few competitive advantages though, and in my opinion we should focus on those:
The first advantage is that it actually requires less infrastructure than regular payments networks (except for cash). This is primarily an advantage for developing countries. It is easier to implement a crypto based electronic payment system there than a banking system. You only need a phone and internet while a regular payment network also needs offices and servers. It is also easier to send money across borders and to the unbanked. Be that in the form of remittances or paying them for work.

The second advantage which is also a benefit in the first world is that the protocol is open. You can code away with it practically integrating it everywhere, be that physical or digital. But for that to be an advantage you have to look at uses that are not feasible with regular payment systems. For example with crypto you could build a game where you can earn real money that you can spend both in the game and outside of the game, without any third party ever controlling the funds and no risk of losing funds when the servers are shut down. Or you could build a Patreon like website where you can make micro donations or pay per day. And these are probably still pretty bad ideas, because I'm not that creative.

So my long post actually comes down to this question. Why do you focus on investing in infrastructure instead of investing in utility? Because it is likely the latter that is a necessity for crypto to take off and the former that will automatically follow after it (we had paper letters before the internet and shops before credit cards).
 
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People first need to understand that crypto works as easy as fiat money, but with more important benefits like Dash has. Being fast, cheap and secure. Human behaviour is strong habit driven. So people understand ATMs and how they work. They will very likely understand how crypto ATMs can be used. The same usecase exists when you pay at a Crypto POS, which works for the costumers like using their NFC banking cards, but now via smartphones. Acceptance is often related to usability and must be as simple as possible for the costumers. In fact isn´t that exactly resulting in utility with a working infrastructure? @Aezel
 
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For the consumer transactions are currently free in most cases so Dash is not cheaper for them. Looking at the whole chain I know crypto could be a few percent cheaper, but I really doubt it is enough to make people switch and I suspect that, if it does turn out to be sufficient, Visa, Mastercard, etc will reduce their fees.*

For consumers credit/debit card transactions are already instant so that's not really a perceived advantage either. And most people don't care about security, they probably should but reality is they don't. What is the incentive to use crypto if it is just "as easy to work with as fiat money"? Why change a habit if the benefits are really small or even non-existing?

I strongly believe that new use cases, things that are not possible or somehow very difficult with fiat will be what will initially drive crypto adoption. People must really want to use it. Core seems to understand this as they focus on the legal cannabis industry, where the advantage is much larger at 10-15% (the idea is good, execution may be lacking). And Evolution will make it much easier to use Dash in software/web platform. Crypto will really only be easy to use once a significant part of the population owns some, until then it will continue to be a pain to get it.

How many of your friends have you successfully converted to crypto beyond just speculating/investing?

(Ideally I hope you and your team do an awesome job getting Germany on crypto and prove me wrong. I just fear that I'm not).


*I'm not even convinced a decentralised system can do transactions fundamentally cheaper than a centralised system. Don't forget that Dash transactions are currently highly subsidized by the block reward and there is also a lot of fat in the fiat system that could be shed if real competition turns up.
 
I think it's wonderful that you are thinking about sustainability. Unsustainability is in my view is the biggest single threat to the DAO, the ecosystem and the network. If benefits provided by Treasury expenditures are not net equal to or greater than the value supplied to get them, the losses compound over time. I believe that is what has happened and why we are now trading in the $140s. I think it unlikely that investors will continue to support Dash even at this low level if we don't get our spending under control.
Thank you for bringing awareness of this vital issue and for making effort to address it. I wish to help you and support this effort.
 
@billyjoeallen Thanks for your support. Sustainable use of our funds is key to future success. This absolutely means to own other companies and businesses. We should learn to understand that we are not a bank giving credits with zero interest rates to startups. Time to change this and claim our stakes in funded projects. The Dash Embassy D-A-CH wants to become an exemplar for that.
 
Hi GrandMasterDash,

Good to know that, thanks for your feedback. I want to explain you why we have choosen this way. We have talked and are in talks with some ATM, PSP and POS companies and learned that starting a PSP or buying into an PSP for Dash would cost us into the millions. The old banking and card industry is so strong, that you can only get into this by knowing the right people and throwing a lot of money at them. POS companies like Paytomat already got funded heavily by us but we don´t have any stakes in them, thats pretty sad and a waste of money. There is a high competition in this field. With the uphold partnership we already have a strong partner for POS. We are currently working with the BizDev Team of Core to make deeper ties with them.

The ATM market in contrast is still a young market with just a few players coz all this hardware stuff and insuring it and transporting the money is tricky. You need people respectively companies knowing how to not only make this work but also keep it running. In our opinion we have found these people. The additional thing is, that we do not only want to get into a single ATM company in one country, which in fact would be costly enoug. No, we buy into a ATM Group. A company which is a holding structure founding and owning ATM companies in every single country of Europe and we could have a stake in it deciding where the journey goes.

Okay, but the profits earned will be reinvested in reaching out Dash further. For example if there is a need of a "European" POS Solution, coz something goes wrong with uphold or others don´t work because of regulatory issues, this Group has then the financial power to buy into a PSP or POS company we like or need.

Basically this builds the foundation for future Dash investments without the need of further treasury funding, because ATMs are very lucrative.

Best Regards
Simon
 
SimontheRavager said:
Basically this builds the foundation for future Dash investments without the need of further treasury funding, because ATMs are very lucrative.
Click to expand...

Lucrative based on ATM fees? I can see how ATM-BTC fees could subsidise lower ATM-DASH fees, but how do we ensure this actuallyt happens beyond a gentleman's agreement?
 
With legal binding signed papers :) The law is your friend, gentleman agreements have no value. They break with the first struggles.
 
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