Proposal “Save_the_Dash_Trust“ (Active)Back

Title:Save the Dash Trust!
Owner:TheDIF
Monthly amount: 2 DASH (119 USD)
Completed payments: no payments occurred yet (2 month remaining)
Payment start/end: 2022-05-13 / 2022-07-11 (added on 2022-05-21)
Votes: 686 Yes / 19 No / 6 Abstain
Will be funded: Yes
Manually vote on this proposal (DashCore - Tools - Debugconsole):
gobject vote-many b5dfc1d5d9666af8e8cdeefc8da01bd3b8ed5f3da14cf49563e736aba8161a45 funding yes

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Proposal description

This is not a request for funding, rather a public announcement to ensure awareness among MNOs. Please consider voting Yes to allow us to recoup the proposal fee.


What is the Valkyrie Dash Trust?

It's an investment vehicle that allows accredited investors and institutions to invest in Dash without touching the actual coin: https://valkyrieinvest.com/trusts/dash-trust/ Trust shares are an easy and fully compliant addition to a traditional investment portfolio. It was prominently featured in the recently published CoinTelegraph report.

Valkyrie, the company running the Dash Trust and other digital asset trusts, is also a DIF portfolio company.


Why is it important?

Many traditional investment funds and individuals are interested in adding crypto to their holdings, but do not want to bother with seed phrases, hardware wallets and exchange accounts. They want to have a person to call with any problems, proper tax accounting done for them and not worry about legal compliance. The Valkyrie Dash Trust is currently the only investment vehicle that offers these investors access to Dash.

The SEC-registered Dash Trust can be added to an IRA, for example (a type of tax-deferred retirement saving in the US). You can't do that with your Ledger or a Kraken account.

For residents and companies in New York, even if they'd be willing to engage with crypto directly, this Trust is the only legal way to invest in Dash. Due to the restrictive BitLicense requirements, exchanges like Kraken or Coinbase do not provide access to Dash in New York. Without the Dash Trust, the world's number one finance center is shut out from Dash.

Opening up Dash to the demand from otherwise unserved institutions and individuals would support the Dash price and benefit the entire community.


What's the problem?

Setting up the Dash Trust was part of the deal for our (DIF) investment in Valkyrie. Valkyrie wouldn't have launched a Dash Trust on their own. Marketing it was supposed to be a cooperation between DCG and Valkyrie, see this budget proposal, point 4 once you click "Show full description" and babygiraffe's answer to agnewpickens' comment.

Then Valkyrie managed to get their Bitcoin ETF approved and that took over their attention and resources. On the DCG side, the budget that was based on a price of $190/Dash was hit by a significant price drop and and they ended up prioritzing the Miami car topper campaign.

At the end, no marketing was done at all to promote the Dash Trust apart from some social media, like this interview with Ryan Taylor. Without marketing, it was virtually unknown outside the Dash community and languished with only two investors and insignificant funds.

Operating the trust incurs expenses for Valkyrie. To make it a sustainable product, they quoted a target of USD 5m worth of Dash under management. After about 10 months of operation with no growth in subscriptions, Valkyrie announced to shut down the Dash Trust at the end of May.

With the help from Ernesto and Glenn from DCG, we were able to get a grace period until end of June.


How can I help?

Temporarily park some of your Dash in the Dash Trust!

If we manage to grow subscription volume by end of June, Valkyrie will keep the Dash Trust open indefinitely. I'm sure if we show a solid growth trajectory towards the $5m target, June is probably not a rock-hard deadline.

In the longer term, we'd like to pick up marketing to new investors again as initially planned and meet the target that way. The Cointelegraph report is a great tool to kick that off. We may post another proposal for a dedicated marketing budget in cooperation with DCG and/or through a well-connected individual from the community. However this will not come to fruition by June.

In the meantime, we need a stop-gap solution to keep the Dash Trust alive. We all know we have several multi-MNOs among us. If that's you, please chip in by moving some of your Dash to the trust!  You may get slightly less rewards compared to running your own node but you may gain much more in the long run from rising prices when the trust gains traction. Of course you can take your Dash back to running your own nodes at that point.

And if you do know high-net-worth individuals, family offices, investment funds, please introduce them to the Dash Trust!


Why are you posting this as a proposal?

This case has been discussed on Discord and Telegram over the last few days. We can't expect everyone in the Dash community to check those chats all the time. This is the place where we can reach the most MNOs and a proposal is the only way to post anything here. Thanks for voting Yes to reimburse the proposal fee!

Show full description ...

Discussion: Should we fund this proposal?

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0 points,14 days ago
Erm, there is an elephant in the room and it is Valkyrie's statement on the Dash Trust at Consensus. Care to address this?
Reply
1 point,1 month ago
my 2 cents. Advertise this in NYC exclusively. I have advised 2 public CEOs from NYC on crypto and they really struggled with buying Dash. There must be pent up demand.
Reply
0 points,25 days ago
https://www.cnbc.com/2022/06/03/heres-whats-in-new-yorks-new-bitcoin-mining-ban-.html

''The New York bill, which previously passed the State Assembly in late April before heading to the State Senate, calls for a two-year moratorium on certain cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions''

I think New York is increasingly getting more hostile to crypto, especially to proof of work crypto. Looks to me very difficult to attract crypto investors in New York, when they are planning to outright ban proof of work mining operations there. I suspect they will extend this two-year moratorium to altcoins that use PoW as well.
Reply
1 point,1 month ago
Can you please contact me? Sven in the DIF channel on Discord or on the Telegram @dash_chat group.
Reply
2 points,1 month ago
What does the Dash Trust actually do? I mean, if I put funds into the trust, what happens to my coin, how many coins need to go in? What's the risk?
Reply
0 points,1 month ago
"What does the Dash Trust actually do? ... if I put funds into the trust, what happens to my coin"

You can think of it as an SEC-registered version of CrowdNode. They keep your funds in BitGo custody, run masternodes with it, add the rewards to your balance and charge a fee for their service.

One of the main differences is that they also allow deposits and withdrawals in fiat and would buy/sell Dash as required on their end. So if you're an investor thinking and operating only in USD or EUR, you can do that and never have to touch the coin.

"how many coins need to go in"

It's explained in the proposal. USD 5m is the target to make it a sustainable product. Even if we don't hit the $5m by June, we should at least show a solid trajectory towards that goal. Every bit helps. Minimum investment per individual is $25k.

"What's the risk?"

Biggest risk is Dash price development. They are literally holding Dash. If Dash tanks, so do your Trust holdings.

Then of course there is a certain custodial risk. BitGo has your coins in custody. In theory, they could get hacked and lose your funds. There may actually be insurance against it, I'll have to look that up. Bankruptcy is NOT a risk because your trust shares are legally yours. In case of an insolvency, your trust shares would not become part of the bankruptcy assets. Overall, I consider the custodial risk extremely small.
Reply
-1 point,1 month ago
@TheDIF
Under "Key Facts" they mention 1) For Accredited Investors Only
No mention at all, how this relates to non-U.S. citizens! As if non-U.S. citizens do not even exist out there.
As far as i can tell, "Accredited Investor"-status is a government-sanctioned invention or definition by the U.S.
Most other countries in the world do NOT discriminate people about what they are allowed to invest in, based on their net worth and/or income, or any status they have to proactively apply for. What a mountain of shit.

The amateurs who created this bogus investment vehicle, should have known that "For Accredited Investors Only" equals failure with almost certainty. Its like begging for failure.
Not to mention the $25k minimum investment, which right now is almost 500 Dash.

Why was this trust not simply moved to a much better jurisdiction, instead of paying taxes to the hooknosed FEDs?
This hardly makes any sense.
Reply
1 point,1 month ago
"No mention at all, how this relates to non-U.S. citizens!"

The trust is open to non-U.S. citizens and non-U.S. residents.


"Accredited Investor"-status is a government-sanctioned invention or definition ... status they have to proactively apply for"

Yes, for the US it is defined by SEC regulations. But no, you do NOT have to apply for it. There is no official certification or anything of that sort. The SEC simply obligates financial institutions to make sure that certain products are only sold to people who meet these criteria. How the institutions do that is up to them.

Products for accredited investors tend to be more risky and certain legal protections don't apply in those cases, i.e. you can't sue for loss of value by claiming you were misinformed by the bank or issuer.


"Most other countries in the world do NOT discriminate people about what they are allowed to invest in, based on their net worth and/or income"

IDK about "most", I haven't counted, but similar regulations do exist in many major economies. The entire EU, for example, has the concept of "elective professional client", which is essentially the same thing. Of the top of my head I know Canada and Singapore also have these rules and I'm sure there are many more.


"The amateurs who created this bogus investment vehicle, should have known that "For Accredited Investors Only" equals failure ... Not to mention the $25k minimum"

The "amateurs" have so far built a company that has more than quadrupled our (DIF's) equity investment in their company - all based on crypto investment products for accredited investors. The reason for the Dash product's failure is explained above under "What's the problem?"

Please understand that the Dash Trust is not aimed at you or the typical MNO. It's literally aimed at the "accredited investor"-type people: wealthy individuals and institutional investors with a more traditional background. It's the only such tool Dash has. It's supposed to be our version of the successful Grayscale trusts.

The fact that we're asking MNOs to help out here is purely a temporary stop-gap solution to buy us more time as explained under "How can I help?"


"Why was this trust not simply moved to a much better jurisdiction"

Please read again "Why is it important?" and it should be obvious. You can't offer IRA savings from another jurisdiction. You can't serve New York from another jurisdiction. You can't serve the type of people and institutions this is aimed at from another jurisdiction.


"instead of paying taxes to the hooknosed FEDs?"

The trust is not paying any taxes. They provide the necessary forms and reports to make filing easy for you, but you are responsible for paying your own taxes. And btw, the FED has nothing to do with tax collection.
Reply
0 points,1 month ago
So, if I even had $25k in Dash to put up, unless I were accredited, I still couldn't participate anyway, right?
Reply
0 points,1 month ago
You have to show to Valkyrie that you meet those criteria. It's pretty much up to you what you send in, even a letter from your accountant saying that you meet the criteria would work.
Reply