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Proposal “coreteambd0319“ (Completed)Back

Title:Core Team Business Development (March)
Owner:glennaustin
One-time payment: 610 DASH (65825 USD)
Completed payments: 1 totaling in 610 DASH (0 month remaining)
Payment start/end: 2019-02-15 / 2019-03-17 (added on 2019-02-08)
Votes: 873 Yes / 131 No / 15 Abstain

Proposal description

Dash Core Group March 1st Funding Proposals
DCG is submitting 2 funding proposals for the March 1st budget cycle:
1) DCG Compensation: $209,000
2) DCG Business Development: $41,000

This proposal
This is cross-posted here

What is this proposal about?

This proposal funds the Dash Core Group’s ongoing business development expenses. The last time funding was requested for the Dash Core Group’s business development budget was in October 2018.

A look back at 4th quarter business development activity
Since our last funding request, the business development budget has been used to fund a large number of integrations, promotions, and co-advertising efforts.  Productivity increased in 4Q2018 with 10 integrations and the release of our Kriptomobile partnership results.  4Q2018 compares favorably to 1Q2018 - 3Q2018 when we averaged 8 integrations per quarter.  

Our 4Q2018 integrations were as follows:
  • Exchange Strategy Pillar:
    • 5 partners
    • Coincola, HBUS, Panda Exchange, Digifinex and IDAX
    • Digifinex now accounts for our #23 and #25 highest 24 hr volume trading pair
    • IDAX now accounts for our #27 highest 24 hr volume trading pair
  • Venezuela Strategy Pillar:
    • 2 integrations and 1 integration enhancement with the Kriptomobile update (2.0)
    • Exclusive relationship with all Church’s Chicken locations in Venezuela
    • Biz Dev Capabilities Team creation of web app for DiscoverDash.com to support Kriptomobile 2.0
    • Update on Kriptomobile released (2.0) which included increased DashText promotion with the Krip K1 model, launch of DiscoverDash.com web app and results released:  66,000 phones sold with 53,000 sold in Venezuela
  • High Chargebacks Strategy Pillar:
    • 1 Partner, ePaymints.  Channel partner with several active discussions ongoing
  • Additional High Value Integrations:
    • FuzeX partnership announced and officially signed at Money 2020
    • Integration of Uphold into Android Dash Wallet with iOS to follow
We have tried to provide as much detail as possible in our partnership descriptions. Unfortunately, many items, such as partner level cost is commercial in confidence and we are unable to share. Disclosing exact dollar amounts would additionally impact our ability to negotiate future partnerships and complicate existing ones as the commercial terms would be made public and visible for them to directly compare. Generally speaking, the integration deals we directly fund are low-cost as evidenced by the large number of integrations and promotion activities funded by the previous proposal. Larger requests are directed to the DAO for funding decisions under separate proposals.

Additional detail on how we spend business development funds
  • On average, 28% of these costs are for the direct benefit of the Dash User and to drive transactions via discounts, waived fees or a small amount of Dash.  
  • In such cases, the partner also has “skin in the game”.  This can consist of matching discount levels or fee waivers, absorbing incremental direct costs of their own, negotiated permanent fee reductions, dedicated developer resources, partner supplied PR and marketing channels, etc.
  • Total onboarding cost consists of:
    • Direct integration costs  (I.e. API fees, compliance costs etc…)
    • Indirect integration costs (i.e. cost of resource redeployment etc...)
    • Promotional activity    
      • Variable expenses such as fee waivers, contests or discounts to promote usage
      • Limited marketing through channel partners
  • Co-investment grants:
    • Integration grant programs
    • Joint marketing and promotion efforts
    • This includes Alt Thirty Six, BlockCypher and Uphold
What will the funds be used for?
The budget being requested in this proposal is to cover a number of initiatives. This budget will include funding for:
  1. Promotional and integration costs associated with:
    1. Kriptomobile expansion
    2. Alt Thirty Six
    3. Unannounced partnerships
  2. Onboarding expenses to support up to 6 current negotiations with potential partners
We continue to minimise the cost of integration wherever commercially possible. One way we are bounding expenses is by focusing on the top-line growth benefit of a relationship with the DCG business development function, for example through incentivizing users to drive transactions, or adding value in non-monetary ways.
  • Create innovative ways to work with both existing and new partners, such as the multi-party Kriptomobile partnership which could not happen with passive networks
  • Highlighting the value of access to Dash’s PR services and social media channels to gain exposure for their business
  • Highlighting the value of referrals and cross-sales opportunities DCG facilitates between its partners
  • Contests that reward transactions with contest entries
  • End-user discounts that are both time bound as well as limited in budget
  • Reclaiming unused Dash, such as we’re doing with the Kriptomobile partnership by ensuring the paper wallets expire. DCG can then sweep unclaimed funds and redeploy them to other efforts
This approach is seeing incredible success in an environment where ICOs in particular have purchased integrations at astronomical prices.  DCG does not engage in “pay to play” negotiations. We will continue recommending such offers to still be submitted to the network and provide potential partners with the resources on how to do so. Should they choose to submit a proposal, the Masternodes have final say on whether funding is provided for that partner.

Requested funding is as follows for the March 1st budget cycle:
605.00 Dash ($41,000 USD @ $67.5 per Dash)
    5.00 Dash reimbursement for the proposal cost
Total: 610 Dash

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Discussion: Should we fund this proposal?

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6 points,2 months ago
Kriptomobile has it's own proposal for 220/month. What is the case for this additional funding in this proposal?
Reply
0 points,2 months ago
The following response is being posted on behalf of the DCG Business Development Team:

We are working with Kriptomobile to leverage the platform created by their phones in order to expand Dash user base in LatAm, and we started in Venezuela. They are constantly evaluating other markets where their solution has potential for high growth. Once we find markets where the complete cycle of acquire-store-spend presents a good opportunity for growth we will evaluate with them a joint entering strategy and may deploy some of the funds.
This is in addition to other incidental expenses on our side, development of tools such as automated sweeping paper wallet that we need for Krip but can be used for other engagements.
Reply
2 points,2 months ago
Is the use-case for crypto-currencies at dispenaries drying up? ie. have been hearing that ppl can pay with credit/debit cards at dispensaries
Reply
0 points,2 months ago
The following response is being posted on behalf of the DCG Business Development Team:

You are correct, there are dispensaries who offer credit/debit card payments, however they find that there are a number of issues for those dispensaries that chose to do it. Those who have merchant accounts through state banking entities are labeled high-risk merchant accounts usually reserved for companies with high-chargebacks. As of today, major banks will not provide services to Cannabis businesses in the U.S The costs for these high-risk accounts are high, on average around 20%. In addition, Visa, Mastercard, AMEX, and other major credit card networks do not process cannabis payments in the U.S. Therefore most of the dispensaries that offer credit card payments to their customers do so illegally. Visa and Mastercard for example, have departments that investigate violations of terms of service. These departments regularly catch and penalize these dispensaries offering credit payments through their networks. These punishments include loss of licensure for dispensary and merchant bank account closures. One popular way for dispensaries to offer credit card payments is by being categorized as a different type of business (nail salon for example). Check your receipts following a purchase in a legalized state and more often than not, it will have some sort of discrepancy (will reflect a non-cannabis purchase and/or from a non-cannabis related store).
Reply
3 points,2 months ago
update, there is a big bill before Congress related to dispensaries+banking:
<Banks want a hit of the marijuana business. Will they get to partake?
A House subcommittee takes up the SAFE Banking Act, which would allow banks to provide services to legal pot businesses.

By Renae Merle
February 13 at 6:27 PM >

<Congress urged to fully open banks to marijuana industry
By The Associated Press February 13, 2019 7:45 pm>

The investment into ALT-36 will turn out to be a big mal-investment if this bill is passed?
Reply
0 points,2 months ago
The following response is being posted on behalf of the DCG Business Development Team:

We agree, that if banking is allowed to work with cannabis business, Dash as a solution for the Cannabis industry would not have the same level of “fit” as it does now in the cash based industry. This is why the pillar focuses on the U.S. and not on Canada. Whether SAFE will pass or not is unknown. An article looking at the likelihood of it passing can be found here https://www.washingtonpost.com/business/2019/02/13/banks-want-hit-marijuana-business-will-they-get-partake/?noredirect=on&utm_term=.e4f77e4ca04c. In a nutshell, the article states that there may not be the political will to pass this considering Marijuana is still Federally, a Schedule 1 drug.

Having said that, if the SAFE Act passes or Cannabis becomes legal, there are a few reasons why the investment into Alt Thirty Six is still a promising one, and why it still makes sense that cannabis remain a key pillar in our adoption strategy.

1) Alt Thirty Six has a first mover advantage.
o Currently one of the only fully legal and licensed payment solutions within the cannabis industry, Alt Thirty Six will be able to cover a good proportion of the market before banks start working with dispensaries.
o In the absence of digital forms of payment, payment behavior can be learned that will result in frequent users finding it easy to pay in Dash for their cannabis payments
o Alt Thirty Six provides fully legal and compliant merchant account services at better rates than the industry. Businesses banking with them, will be using their platform and services at affordable costs, making it not worth the effort to change providers (If it’s not broken, don’t fix it approach)

2) Alt Thirty Six’s Platform allows for payments (i) directly in Dash, and (ii) fiat with Dash as a settlement mechanism
o Worst case scenario, payment behavior does not pick up and users use fiat. If they use Alt Thirty Six’s platform, there will be no change in Dash transactions due to Dash being used as a settlement mechanism in fiat payments on the platform
o In both cases, transactions are immediate or near immediate with Alt Thirty Six, as a result of being powered by Dash, a significantly faster option than bank transfers which can take days

3) Alt Thirty Six’s Platform can be used in any industry by any business that makes or receives transactions
o The platform is also offered to business customers as a fully white-labeled solution
o The versatility, functionality, and features of the platform as a payments solution allows it to be used in any industry. Their current strategy focuses on the cannabis industry but is being used by companies in many different industries

4) Alt Thirty Six platform is highly useful fior both B2b and B2C businesses
o The banking issues within the cannabis industry is often understated. Businesses have had their accounts closed who have nothing to do with the cannabis plant or just have a client that is a cannabis related business. Having a payment solution that covers the needs of B2B and B2C businesses allows Alt Thirty Six to saturate many different verticals within the industry
o Through Alt Thirty Six’s integration partners, Alt Thirty Six is working towards becoming a full featured solution for the cannabis industry for both B2B and B2C businesses. The platform offers many services beyond payments, including: rewards, inventory management, e-commerce, safe cash transportation, smart vaults, etc. This makes Alt Thirty Six attractive to potential business consumers from all types of cannabis businesses

5) Laws can take time to implement
o Legalization on a Federal level or a banking act that allows banks to work in the cannabis industry would not necessarily have immediate effects. It will depend on the wording of the law, but assuming it’s worded without caveats, it may take some time to see things change, providing us with more time to curate user behavior
o There may be caveats in the law however, that introduce difficulties or added costs with working with banks
o A handful of states and the Federal government will likely be the last to legalize cannabis. This is the view by industry analysts, based on our current politics and past data points such as prohibition. They do not see full legalization within the next two years
Reply
2 points,2 months ago
Yes from me.
Reply
2 points,2 months ago
DCG have been saying US-Mex dash remittance is a key area of focus and/or pillar and/or great fit or whatever for a year or more.

How much has been spent on that?

Are there any results to show?
Reply
0 points,2 months ago
The following response is being posted on behalf of the DCG Business Development Team:

Hello Bitedge, when we first communicated the strategy to the Community in September of 2018 we organized our work and prioritised focus where we could make immediate impact, and during the same time develop new partnerships where we did not have them.

We cannot discuss details due to commercial sensitivities though we are happy to share that we are in a number of discussions with potential partners in this space. At the same time we are having discussions with potential partners in this space, we will first establish a stable, proper liquid cash out ramps on both ends of the remittance channel. Once this groundwork is complete, we will be able to make significant progress within this pillar.
Reply
2 points,2 months ago
Any money given to Alt36 in this or any other proposal should be in return for equity in their company! No more Free Lunch!!
Reply
5 points,2 months ago
The types of activities we plan to pursue with Alt36 are joint activities to promote the benefits of both Alt36 and Dash. We believe it is important for Dash to be represented alongside partners and promoting our collective solution jointly. This is consistent with the type of approach we take with all of our other key partners, including BlockCypher, Uphold, or Kriptomobile as examples. Joint promotions are pursued only if we feel they are mutually beneficial. Needless to say, it would be unusual to request equity in any of these companies just for sharing in the costs of promotions or integrations that promote the Dash network every bit as much as our partner's service, especially when they are contributing financially to these promotional activities that have a benefit for Dash.
Reply
1 point,2 months ago
This budget will include funding for:
Promotional and integration costs associated with:
Kriptomobile expansion???
Alt Thirty Six???
Unannounced partnerships???
Onboarding expenses to support up to 6 current negotiations with potential partners???

Please provide a proper break down of how the funds will be allocated to each of the individual partners you mentioned.
Reply
3 points,2 months ago
We are unable to provide breakdowns of any specific integration or promotion, except in rare cases. If we disclose the details of particular integrations or promotions, it affects our ability to negotiate future deals on behalf of the network. This would increase the costs of integration or promotion activities. Likewise, our partners strongly prefer that details about their contracts are not made public, as it would impact their future dealings. What we can assure is that the DCG business development budget is reserved for smaller integration or promotion costs, many of which could never justify the expense of a separate proposal or the time required for all of the MNOs to assess each opportunity. As evidence, we have not funded this budget since October, and we've covered the costs of a number of integrations and promotions during that time.

For larger costs - such as the recently approved proposal to expand the partnership DCG began with Kriptomobile - those are submitted to the network as their own separate proposals for the network to consider and vote upon as separate items.

Lastly, we are constantly negotiating new partnerships and integrations. We do not preannounce any potential integrations. Integrations are announced only after the integration is complete and the product or service is launched, unless they are their own separate proposal. Commercial negotiations and funding is needed in advance in order to sign agreements and for our partners to begin incurring integration expenses. We believe that our track record of delivery is evidence that we do not squander business development funds or make large commitments through this budget that would otherwise warrant the bandwidth of all the MNOs to approve on an individual basis.
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0 points,2 months ago
Thank you @babygiraffe
Reply
0 points,2 months ago
@glenbaustin yes please procide a breakdown thank you
Reply
0 points,2 months ago
We are unable to provide breakdowns of any specific integration or promotion, except in rare cases. If we disclose the details of particular integrations or promotions, it affects our ability to negotiate future deals on behalf of the network. This would increase the costs of integration or promotion activities. Likewise, our partners strongly prefer that details about their contracts are not made public, as it would impact their future dealings. What we can assure is that the DCG business development budget is reserved for smaller integration or promotion costs, many of which could never justify the expense of a separate proposal or the time required for all of the MNOs to assess each opportunity. As evidence, we have not funded this budget since October, and we've covered the costs of a number of integrations and promotions during that time.

For larger costs - such as the recently approved proposal to expand the partnership DCG began with Kriptomobile - those are submitted to the network as their own separate proposals for the network to consider and vote upon as separate items.
Reply
-2 points,2 months ago
Glennaustin*
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