Dash — what investors are missing (part 2 — the treasury)
Welcome to my three part series on “what investors are missing about Dash”. If you missed my first post you can find it here.
In this post I am going to explore the implications of the Dash treasury system during/after the next bull market and how they differ to the last bull market.
If you don’t know how the Dash treasury system works then you can find an overview here but for simplicities sake, basically 10% of the block reward is allocated every month to what’s called the Treasury and Dash stake holders (owners of 1000 dash) get to vote on how these funds are distributed. During the last run up, that equated to around $10 million USD per month (at the peak). However the problem with the last run up was that if you gave these funds to an individual team, there was no way to hold that team accountable to the task that they said they would perform. So what ended up happening was that funds would often be allocated to teams that didn’t do the job they promised to do, or funds would just go completely unallocated.
These issues plagued Dash during the last run up. The good/honest teams didn’t want to take too much money as they knew that the network would not legally own these funds anymore and in turn would have no way of recourse if funds were mismanaged. The not so good teams would happily take funds, some would deliver but many wouldn’t. So at a time where the treasury was generating $10 million USD per month, the network had no real way to allocate these funds, as the good teams wouldn’t take them and the not so good teams wouldn’t necessarily deliver.
However this time it’s going to be different because of one “not so simple” legal structure that the Dash Core Group created. During this bear market Dash Core Group implemented what is known to be a first of its kind; a Trust in which is owned by the Dash Network or more specifically the Masternode Owners (1000 dash owners). What this trust has allowed the network to do is take control of Dash Core Group Inc (the company) and therefore own all assets on its balance sheet. That is why I say “this time it will be different” as when the network funds Dash Core Group, it is technically putting the money into its own pocket and can have some recourse if Dash Core Group mismanages the funds.
So what does this mean…. Well it means that any left over money from monthly treasury cycles can easily be put onto Dash Core Groups Balance Sheet, which gives them more resources to execute on their vision. It also means that Dash Core Group will be comfortable asking for excess funds, as they know that the funds are legally owned by the network. This more than just effects DCGs balance sheet, it also means that Masternode Owners will be less inclined to give the green tick to questionable proposals, where owners can run with funds, which means less wasted money and more competitive proposals.
This alone should make you think that the next cycle is going to be wild for Dash but it doesn’t stop there. Dash Core Group also created/spun off into the Trust, the worlds first ever ownerless Investment Foundation. The Dash Investment Foundation to be precise. This investment foundation is a seperate entity to DCG and its purpose is to make investments on behalf of the Dash Network that either generate a return or lead to adoption of Dash. The DIF (Dash Investment Foundation) has been slowly building its balance sheet but it has been restricted by the size of the monthly budget system ($570,000 USD). However when this next bull market kicks off, the Dash Network is going to have another entities balance sheet to stack whilst still legally owning the assets on that balance sheet. This will give rise to an Investment Foundation that can flex its power across the crytpo/fintechsphere and provide inroads for Dash in many new and exciting ways!
So to summarise (and keep it brief) most investors are missing the fact that over this bear market Dash spun up a Trust who’s beneficiaries are the Masternode Network. This trust now owns the Dash Investment Foundation and Dash Core Group Inc. Which means both these entity’s can mop up any excess funds during any treasury cycle, leading to a strong balance sheet and other proposal owners having to develop more competitive proposals. Remember, other proposal owners are competing with Masternodes funding their own balance sheets, so it is not going to be easy.
Dash finally has the foundations in place to flourish for years to come, so bring on the next bull market!
My next article will explore the implications of Dash User Accounts and how they help solve the supply demand issues that have plagued crypto for years.