eduffield
Core Developer
Introduction
One of the greatest challenges of building a crypto currency platform is ensuring you create a decentralized system of governance to manage, fund, maintain and expand the project. This key element is absent in every currency to date, the natural response is to create a not-for-profit foundation that is tasked with maintaining the core protocol and promoting the coin but is not really connected to the coin holders in any meaningful way. This approach has a few issues that have been made evident from the experience of older crypto currency platforms.
Current crypto foundations are not related to the currency itself by any mechanism that is included in the protocol and are not designed to outlive early adopters when they lose interest. The foundation then struggles to get funding until it implodes and core development of the protocol is left scrambling for funding or depending on charity that can’t be counted on and does not allow for proper budgeting and planning. Donations are also unfair to donors because there are always free riders that benefit from the effort done by others without contributing. Other projects have financed themselves premining coins or doing pre launch sales, which is not a great solution either because control of the funds is centralized and at that stage it is impossible to quantify the future needs of the project.
Through the network of full nodes and the collateral requirement, Dash already counts with a decentralized network of masternode operators that are invested in the future of the currency and that as a group can act as stewards of the core protocol development and promotion. We propose a decentralized management system based on the masternode voting mechanism. Masternode operators are not the only ones interested in the success of Dash, but they are the most stable ones because, unlike miners, they can’t reuse their asset for any other purpose or coin.
A portion of the future masternode revenue share schedule (beyond 45%) would be held in escrow by the network itself, in the name of the operators, to be executed in the development and expansion of the ecosystem through the vote of the masternodes in different budget proposals. These funds would be directed to supporting development and promotion of the coin, masternode operators would vote on specific budgets and projects to be funded, thus defining the direction the coin is taking. This would be done in a completely transparent way where there is a public portal where new initiatives are proposed and masternodes can vote on them. Something like a decentralized kickstarter or Lighthouse, that can be used for anything that creates value within the ecosystem.
This would be a 100% decentralized system powered by the masternodes, where budgets are set and paid directly from the blockchain. The blockchain could hire core developers this way and introduce a new concept of paid blockchain contractors, where people work for and are directly compensated by the network, through the decentralized votes of all masternode operators. One advantage of this model is it can survive early adopters. If early masternode operators sell their coins, the new owner can set up a masternode and with it acquire the right to vote on the budgets and projects. This guarantees there is a working system of maintenance as people come and go, making the network capable of sustaining itself on its own without depending on specific actors.
Masternode Voting And Setting Budgets
The system would work as a decentralized voting mechanism setup in the software, where budgets for specific projects are proposed, then the masternodes as a whole vote on them. Each project, if it passes, is added to the total budget and paid directly from the blockchain to the person doing the work. With this, we could hire core developers and pay them directly after approval of the work in a decentralized fashion.
A masternode would vote using the command “masternode vote yay” or “masternode vote nay”, votes would then propagate across the network, would be tallied then the instructions followed by the network itself. Budgets being discussed could be seen by using the command “masternode budget show”.
A well defined decentralized system of governance will allow a crypto-currency network to endure and survive its original creators. Later generations of masternode operators would have a clear way to support the system that is defined by the protocol applying wisdom of the crowd techniques and the bond of trust established by the masternode collateral to create a decentralized management system.
This would create incredible value within the currency, allow us to be more agile and compete with other payment systems like Bitcoin and credit cards on a global scale.
After a period of time, we should have a strong team of productive paid contractors paid from the blockchain rewards. This should create a lot of value for us as we should have a very stable network, with faster implementation of core services that will make Dash successful.
Updated Reward Schedule
To guarantee the long term sustainability of the blockchain, the network would keep a portion of the block rewards in escrow and the masternode operators would be tasked to act as stewards and invest in the maintenance and expansion of the network. This will result in faster development and promotion, creating a virtuous cycle that benefits all actors, including miners, masternode operators, investors and users. More importantly, this gives the blockchain itself a self-preservation mechanism that is beyond the control of any individual.
Currently masternodes make 42.5% of the mining reward, this would cap at 45%, then future increases would instead be held in escrow by the network waiting to be executed in its maintenance and development by the masternode operators, creating the first self-sustainable decentralized cryptocurrency platform.
The masternode operators establish a social contract with the network they benefit from and are bound to act as caretakers, dedicating a portion of the network rewards to furthering the ecosystem. This has a ripple effect that benefits all parties involved especially the end users.
The value from the projects is expected to be much greater for everyone as this would benefit not only operators but also miners and users. This is not different from the miners contribution to the ecosystem. Because miners don’t keep 100% of the block reward, like it happens in other PoW cryptocurrencies, we have masternodes and a much healthier network that increases the value of the reward that miners perceive. Besides that, masternodes will be able to vote on the introduction of this change, making the first distributed decision the actual creation of the system, similar to establishing a Constitution.
This approach of distributing the normal block reward in a way that considers all critical elements a crypto-currency needs for its long term viability, e.g. mining, full nodes, development and promotion, is really revolutionary as it is done without changing the emission or creating any additional inflation for investors. The network just distributes the available resources in a way that is beneficial to everyone and it has already proven to be successful with the introduction of paid full node operations(masternodes).
One of the greatest challenges of building a crypto currency platform is ensuring you create a decentralized system of governance to manage, fund, maintain and expand the project. This key element is absent in every currency to date, the natural response is to create a not-for-profit foundation that is tasked with maintaining the core protocol and promoting the coin but is not really connected to the coin holders in any meaningful way. This approach has a few issues that have been made evident from the experience of older crypto currency platforms.
Current crypto foundations are not related to the currency itself by any mechanism that is included in the protocol and are not designed to outlive early adopters when they lose interest. The foundation then struggles to get funding until it implodes and core development of the protocol is left scrambling for funding or depending on charity that can’t be counted on and does not allow for proper budgeting and planning. Donations are also unfair to donors because there are always free riders that benefit from the effort done by others without contributing. Other projects have financed themselves premining coins or doing pre launch sales, which is not a great solution either because control of the funds is centralized and at that stage it is impossible to quantify the future needs of the project.
Through the network of full nodes and the collateral requirement, Dash already counts with a decentralized network of masternode operators that are invested in the future of the currency and that as a group can act as stewards of the core protocol development and promotion. We propose a decentralized management system based on the masternode voting mechanism. Masternode operators are not the only ones interested in the success of Dash, but they are the most stable ones because, unlike miners, they can’t reuse their asset for any other purpose or coin.
A portion of the future masternode revenue share schedule (beyond 45%) would be held in escrow by the network itself, in the name of the operators, to be executed in the development and expansion of the ecosystem through the vote of the masternodes in different budget proposals. These funds would be directed to supporting development and promotion of the coin, masternode operators would vote on specific budgets and projects to be funded, thus defining the direction the coin is taking. This would be done in a completely transparent way where there is a public portal where new initiatives are proposed and masternodes can vote on them. Something like a decentralized kickstarter or Lighthouse, that can be used for anything that creates value within the ecosystem.
This would be a 100% decentralized system powered by the masternodes, where budgets are set and paid directly from the blockchain. The blockchain could hire core developers this way and introduce a new concept of paid blockchain contractors, where people work for and are directly compensated by the network, through the decentralized votes of all masternode operators. One advantage of this model is it can survive early adopters. If early masternode operators sell their coins, the new owner can set up a masternode and with it acquire the right to vote on the budgets and projects. This guarantees there is a working system of maintenance as people come and go, making the network capable of sustaining itself on its own without depending on specific actors.
Masternode Voting And Setting Budgets
The system would work as a decentralized voting mechanism setup in the software, where budgets for specific projects are proposed, then the masternodes as a whole vote on them. Each project, if it passes, is added to the total budget and paid directly from the blockchain to the person doing the work. With this, we could hire core developers and pay them directly after approval of the work in a decentralized fashion.
A masternode would vote using the command “masternode vote yay” or “masternode vote nay”, votes would then propagate across the network, would be tallied then the instructions followed by the network itself. Budgets being discussed could be seen by using the command “masternode budget show”.
A well defined decentralized system of governance will allow a crypto-currency network to endure and survive its original creators. Later generations of masternode operators would have a clear way to support the system that is defined by the protocol applying wisdom of the crowd techniques and the bond of trust established by the masternode collateral to create a decentralized management system.
This would create incredible value within the currency, allow us to be more agile and compete with other payment systems like Bitcoin and credit cards on a global scale.
After a period of time, we should have a strong team of productive paid contractors paid from the blockchain rewards. This should create a lot of value for us as we should have a very stable network, with faster implementation of core services that will make Dash successful.
Updated Reward Schedule
To guarantee the long term sustainability of the blockchain, the network would keep a portion of the block rewards in escrow and the masternode operators would be tasked to act as stewards and invest in the maintenance and expansion of the network. This will result in faster development and promotion, creating a virtuous cycle that benefits all actors, including miners, masternode operators, investors and users. More importantly, this gives the blockchain itself a self-preservation mechanism that is beyond the control of any individual.
Currently masternodes make 42.5% of the mining reward, this would cap at 45%, then future increases would instead be held in escrow by the network waiting to be executed in its maintenance and development by the masternode operators, creating the first self-sustainable decentralized cryptocurrency platform.
The masternode operators establish a social contract with the network they benefit from and are bound to act as caretakers, dedicating a portion of the network rewards to furthering the ecosystem. This has a ripple effect that benefits all parties involved especially the end users.
The value from the projects is expected to be much greater for everyone as this would benefit not only operators but also miners and users. This is not different from the miners contribution to the ecosystem. Because miners don’t keep 100% of the block reward, like it happens in other PoW cryptocurrencies, we have masternodes and a much healthier network that increases the value of the reward that miners perceive. Besides that, masternodes will be able to vote on the introduction of this change, making the first distributed decision the actual creation of the system, similar to establishing a Constitution.
This approach of distributing the normal block reward in a way that considers all critical elements a crypto-currency needs for its long term viability, e.g. mining, full nodes, development and promotion, is really revolutionary as it is done without changing the emission or creating any additional inflation for investors. The network just distributes the available resources in a way that is beneficial to everyone and it has already proven to be successful with the introduction of paid full node operations(masternodes).
