Proposal “dif-investment-funds-october“ (Active)Back

Title:DIF Investment Funds - October
Owner:TheDIF
One-time payment: 512 DASH (46646 USD)
Completed payments: no payments occurred yet (1 month remaining)
Payment start/end: 2019-09-15 / 2019-10-15 (added on 2019-09-10)
Final voting deadline: in 12 days
Votes: 231 Yes / 186 No / 1 Abstain
Will be funded: No. This proposal needs additional 451 Yes votes to become funded.
External information: dashcentral.org/p/dif-investment-funds-october
Manually vote on this proposal (DashCore - Tools - Debugconsole):
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Proposal description

What is the purpose of the DIF?

The Dash treasury system can create no more than a maximum amount of Dash at month-long intervals. While this model works for funding many of our needs, it’s often not ideal for interfacing with the traditional business world.

Some months, we're presented with more good opportunities than we can afford to fund. Then during other months, we have more funds available to us than we have good opportunities to put them toward.

The Dash Investment Foundation (DIF) solves this problem by providing the network with a way to save units of Dash over time. Those funds are then ready for use when well-researched, great opportunities knock.

In short, the DIF can act as a “savings account” for the Dash network. We're here to actively research investment opportunities, and when good ones arise, we’ll come to you (the Dash network) with a governance vote/poll to determine whether you’d like us to use your saved funds to pursue said opportunities.

What is the DIF's investment process start-to-finish?

  1. Parties seeking investment approach the DIF (if they were not actively approached by the DIF first) and pitch their opportunity
  2. The DIF does due diligence on the opportunity to assess its potential
  3. If deemed a good opportunity, the DIF submits a decision proposal/poll to the Dash network along with supporting analysis and information
  4. If the network decides in the affirmative, the DIF will use its reserves (and any additional requested funds, if necessary) to execute the investment
Who is running the DIF?

Amanda B. Johnson.............Internal Organization and Investor Relations

Michael Lewis.......................Investment Analysis and Technical Background

Jan Heinrich Meyer...............PR and Business Networking

Hytham Abdel-Karim............Investment Analysis and Thinking Outside-the-Box

Glenn Kennedy......................Legal

Casey McDonald...................Accounting

To Be Decided.......................Investment Management (upon reaching $300/Dash and/or at least $1mm in reserves)

What will the DIF invest in, and why?

We’ve chosen the following three high-growth industries because they’re ripe to increase global use cases for Dash. Furthermore, it will be advantageous for the Dash network to have influence (via financial partnerships) with key businesses in these industries, because influence often leads to Dash integrations which may not have happened otherwise.

Blockchain:
Anything to do with crypto trading, buying/selling cryptocurrency for fiat, and future DApps on the Dash platform. 

Payments:
Anything to do with crypto payment service providers, payment terminals/points-of-sale systems, loyalty programs, remittance services, and gift cards.

Consumer Tech:
Anything to do with web and mobile services, household and/or consumer electronics, and related fund management.

Why is the DIF asking for funding each month?

Reason #1:

A predictable monthly amount makes sure that Dash’s stakeholders, as well as all proposal owners, can budget ahead of time, rather than getting blindsided by a big DIF ask during a single month. The more predictable that treasury asks are, the better masternode owners/shareowners can do their jobs.

Reason #2:

We must prevent a scenario in which the DIF is forced into a breach of contract by the network. This could happen if the Dash network first agrees to pursue an opportunity (for example, via a multi-month funding proposal specific to one opportunity), but then de-funds the agreement before all payments are made. This could happen even if the proposal doesn't lose any votes over time, but is simply surpassed by other projects which get more support at the time.

Remember that the Dash network is a fluid body — its stakeholders change month-to-month — and the DIF must not risk breaching legally-binding contracts with outside companies due to the network shifting its priorities, which has happened in the past.

Why 9% of the treasury this month?

This amount was judged as enough to be able to do something meaningful with in the next year or two, but not so much as to be unduly disruptive. Regardless of percentage asked, remember that any funds allocated to the DIF remain under network control at all times. The supervisors and directors maintain a fiduciary duty to the network.

What's more, 9% is not set in stone. It may decrease or increase over time as the network's resources change, and as voters develop specific desires and expectations of the DIF.

What is the DIF going to do next?

  1. We’ve already received inquiries from 10+ businesses within the payments and blockchain industries. We’ve informed these businesses that we’re still in the negotiating phase of acquiring capital and a mandate from the Dash network, and that we’ll be able to more confidently interact with them after two or three funding cycles.
  2. In the meantime, we’re screening the inquiries we have received (and continue to receive), as well as doing background research on the more promising ones.
  3. We’re developing a PR and communication strategy to maximize our impact.
  4. We're launching a poll in the coming days via DashWatch that will ask the network for confirmation of its preference of the asset type(s) in which the DIF’s reserves are stored.

Final two notes: 

1) You will notice that this proposal is being made from a new, generically-named account. The prior DIF proposal (that covered two years of administrative costs) came from account “difkennedy,” while this one is made by “TheDIF.” You will notice, however, that the payout addresses are the same on both.

2) The DIF’s constitution, which is currently under review by the directors, is viewable here.

UPDATE Sept 12: Constitition has been approved by directors.

-----We're looking forward to receiving your support and are happy to answer your thoughtful questions.-----

Show full description ...

Discussion: Should we fund this proposal?

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2 points,1 day ago
As mentioned in our proposal, the DIF would like to give the network the choice on how we handle any designated investment funds. We would like the network to participate in a poll to decide how we do this. Please see the link for further details:
https://poll.dashwatch.org

Thanks

The DIF Team
Reply
1 point,14 hours ago
the poll is faulty. There is no 0% option.
Reply
0 points,12 hours ago
While this is welcome, I don't understand why you did not use the mno-dif discord room to discuss which options should be included in the poll. I keep hoping that the DIF supervisors will discuss things with the MNOs BEFORE decisions are made.
Reply
0 points,11 hours ago
I might have suggested this alternate poll...

usd
usd stablecoin
BCH
BTC
DASH
ETH
LTC
XMR
gold custodial
silver custodial

100%
50%/50%
33%/33%/33%
25%/25%/25%/25%
Reply
0 points,11 hours ago
The the DIF Supevisors could use the results to make a final decision that is informed by the poll, not simply one of the poll options.
Reply
0 points,17 hours ago
I wanted to make a small contribution so that we all think, I hope that my words make the companion think.

I think from the comments read that many people do not understand the idea of ​​DIF, and I am surprised to see so much feedback & votes negative, when we there have been two previous votes for its launch, and the only logic I can think is that the people who are reviewing and voting they not knows nothing about CV, Business Angel world :

I will explain briefly,

First the previous proposals for the DIF have served to:

a) The constitution as ->legal entity<- of the investment fund of a DAO (high disruptive, the first in the world, and of great relevance).

b) The first election of their supervisors the MN voted and every year there are elections. And we have remember the DIF is legal entity owned by the DAO, always!!.

b.2) There are 3 'external' supervisors to help:

- 2 external professionals,
- Ryan - DCG CEO who during the first year does Advisor tasks, without vote. He has not wanted to be an active part, to avoid discussions of centralization, when he is the MOST QUALIFIED person for his career into the Dash community people for this task.

1) DIF is not the only crypto investment fund in the market.
There are several fund, Binance, Nem, Decred and other projects have launched theirs. (The speed of action in this industry is VERY IMPORTANT). And that should be thought by voters.

2) The DIF has legal entity status to interact with the ->real world<-, with a duration about 2 years with the funds already allocated for its management.

3) An investment fund needs FUNDS and the first phase has explained that 9% will be requested from the DAO it every month re-evaluating as the dash value go in the market.
The supervisors with their advisors, have decided that to avoid the loss of VALUE 'decentralize' to: dollar, dash, and gold.
While el DIF & ->DAO<- evaluating projects where to invest which can take months. (doing survey)

4) Supervisors have indicated that there are negotiations for the DAO to have agreements with 'legal entities' this phrase is very important.
A legal entity can be:
- Institutions (universities, institutions of a state-country, etc.)
- Companies, businesses.

5) The DIF has indicated that it is audited by Dash Watch and will launch surveys, and that it is developing a 'white paper' on the fly.

6) There is a channel in Discord to talk about this, and almost no one until this proposal has indicated anything to help supervisors with better-actions, suggestions, etc.

7) The DAO donated dollars Millions to ventures. If that had been piloted by the DIF+DAO, Dash proyect would have had legal protection and maneuverability.

I hope we all contribute our grain of sand and give an opportunity to all the efforts that are being made in this great DAO project to interact with the real world. And in 2 years we can see the successes and failures.

I just hope you read, study, think and vote. Thank you.
Reply
6 points,2 days ago
This proposal sounds very different to what the DIF was originally supposed to be, it's like you all got your heads together and you have changed the original plans. The DIF isn't supposed to be making it up as it goes along. Also, it seems right now that the DIF is attempting to run before it can barely crawl.

Particularly for this proposal, but also for the future, I have concerns about how the DIF will function. There are some very important questions that need good solid answers before the network has the confidence to vote such a proposal through.

The DIF will be a trusted, not a trust-less, entity with large monetary assets being handled by a small number of individuals who's backgrounds we don't fully know, so here are my questions:

1.) How will all the activities, expenditures and monetary reserves of the DIF be properly audited and how often; so that we (the network owners) know that what is reported as being invested in is correct or that what is held in reserve (Dash, Dollars or Gold) actually exist and are there?

2.) How will it be ensured that individuals who have access to funds and subsequently to the Gold and USD cannot easily access those funds with the knowledge and joint or multiple authorisation of others in the DIF?

3.) How will the DIF report to the network on the investment activities and of the ongoing performance of investments?

4.) Is the DIF planning to report back to the network on their activities in a similar manner to what DCG do on their quarterly calls?

5.) How will the rest of the Dash network be affected if a contract with a third-party goes bad and hypothetically they decide to sue the DIF for damages, recourse, etc?

6.) The network is putting a huge amount of trust in the DIF and it would most certainly be the end for it, and hugely damaging to Dash's reputation as a whole, if there were a scandal of missing funds or fraudulent activities that came to light down the road. What is being or has already been put in place to mitigate such risks?

So far there has been a lack of information coming from the DIF on how the DIF wil function and like who to finalises investment decisions, contracts, etc. This suggests that either the DIF doesn't wish to answer or that they do not have answers to give; both of which are concerning when large sums of funds are already being requested.

Finally, as with any trusted entity having so much control, influence and responsibilities there are risks of abuse, without high transparency from the outset. Without high transparency it leaves the potential for an unaccountable black hole, open to fraudulent activities and potentially creating a massive risk to the entire reputation of Dash if something wrong.

Thanks
Reply
3 points,2 days ago
So my initial concern about the supervisors acting as amateur investors has been eclipsed by my concern about the supervisors acting as amateur venture capitalists.

According to my research, for a professional VC firm to fund one deal, they typically have to review 150 deals and seriously examines ten of them -- just to identify one worthwhile project. After the project is funded, its probability of success is 8%, and so the total odds of success are about 0.05% (1 in 2000).

And this assumes that a full-time staff of experienced professionals are doing the work.

It is for this reason that I would like to insure that it is not too easy for the DIF to greenlight any project, and in general, I would like to de-emphasize the VC aspect of the DIF. I believe the DIF is valuable in that it can contract and act as an escrow and also function as a rainy day fund. Maybe it could receive token amounts of equity as consideration for deals, but it should not be spending money expressly for equity.

The idea that the DIF can succeed as a VC is not realistic.
Reply
2 points,2 days ago
I agree we need to assess hundreds of projects if we rely passively on people to approach us. However if we strategically choose our own products and our own dev team to build them. We have complete ownership of the IP and complete control over the choice of products. We could easily introduce several hundred such project ideas into a ranking system that MNOs can vote on. The top voted projects to create products or services could then be entered into the treasury for funding to compete against the random projects we have at the moment.
Reply
0 points,2 days ago
So in that case we go from struggling to FIND the one great project out of 2000 to actually CREATING the one great project out of 2000? You are an optimist.
Reply
0 points,1 day ago
@geert, anyone in crypto, has to be positive. We need to face reality. Crypto is simply not as useful, trusted, needed, accepted, easy to use as fiat currency in 99% of use cases. That is a fact we cannot get away from at this time. However there is that 1%. That 1% is were we should be focusing, selectively working on projects within that 1% were normal fiat simply does not come close to crypto (DASH) in terms of advantages to the user. That 1% is relatively easy to identify. e.g. micro payments or very low cost payments - simply can't be done with fiat currency. Payments were a customer would prefer privacy. Niche markets within hyperinflation countries, one example is parking in Venezuela which is a huge problem. We could create a simple car park payment system using an adapted android phone (terminal and chargepoint) and a simply NFC passive device card. These passive cards cost less than 1 USD each to make. No phone required. People can carry their DASH card. There is a project open now for car parking in Venezuela but they do not yet have a car park payment card. This card could then be charged up with DASH and used to pay for parking. Later the shops within the mall could accept payments from the DASH card. There are hundreds of car parks throughout Venezuela that have parking problems. We could license out the solution to the car park owners with the proviso that their payment solution is Dash exclusive. Since they have no other viable solution at this time this could form a very good product where tens of thousands of people would be exposed to DASH. In addition once we have product such as that anyone in Venezuela that wanted to sell the product could do so if they are granted the distribution rights to our product. People would start using that product and it solves a problem that fiat cannot solve. What I like about this is it would oblige people to have to use DASH since there is no other viable alternative payment system. People then gain confidence with DASH and start using DASH. The NFC contactless passive cards would act like the Oyster card in London. Shops in the mall could then start accepting payments with their DASH card. This product could be adapted for many other low cost payments. This is just one example of a product we could develop - or even buy. e.g. there was one DASH funded project for NFC payment system for events. We could obtain the rights for that technology and adapt it for the network's needs. Then we could license out the rights to anyone world wide that needs a low cost payment system with specific conditions on how they can use the technology. I wrote an article on NFC passive payment systems which you can see here

https://www.dash.org/forum/threads/venezuela-why-nfc-could-be-better-than-evolution-for-granny-and-mass-adoption.42644/

Once we clearly define the market areas were crypto hugely outperforms fiat we can more easily identify products we could develop. I feel this would be much easier than screening hundreds of projects that are may not be related to that 1% area where crypto outperforms fiat currency.
Reply
0 points,1 day ago
We actually agree. I am simply saying that we should not be concerned with getting illiquid equity stakes in these initiatives with the hope that it results in a windfall. Anything we invest in should be something that helps Dash in an a direct and meaningful way.
Reply
0 points,21 hours ago
@geert, I understand where you're coming and agree with all you've said. If we were to invest in a technology it needs to meet defined criteria e.g.

a) Is there a definite problem that exists now that can be solved with the innovation?

b) what are the numbers of potential users of the innovations - are they large?

c) is the problem a real, practical, urgent problem that exists right now and has led to a demand now for a solution?

d) do we have real market intelligence gathered from in the field where the people gathering the intelligence are dealing day to day with that problem and know all of the intricacies of that problem?

e) Can we first introduce a low cost prototype to try it in the field in a number of sites to gather market intelligence before investing in the IP development or purchase of the innovation? e.g. could that NFC payment system we have already funded be easily adapted for a few prototype units and tried in the field before paying for the full technology ownership?

f) would the innovation address a market need now or will it create a market need. We would preferably choose the former.

We should not be trying to create a product and then market it. We should be finding what people already need and giving it to them.

The problem I feel we have right now is that we are funding projects that are nothing more than just "good ideas". But when those ideas are put into the field we see they are not tenable and we lose our investment. What I'm suggesting is we have real - in the field experience with a prototype for a pressing problem that has not other viable solution. After the trial we would have enough information to know if the risk of investment is worth it.

We would also need to know the entire potential market and whether it would be viable to implement such a product e.g Could people in Venezuela actually afford a $1 NFC passive card? Is the NFC DASH card stable or can funds be lost if it close to a magnetic field etc. All of this market research would have to be done first before investing.

However the best way to find innovations is for "Lead Users" to post to us their problems. Lead users are the earliest users of a new product or service which they develop for themselves to solve a new problem. We need to find these Lead Users and the best way to do that is have them come to us. We could create a "Payment Problem Board" in which anyone world wide can post their payment problems to see if "DASH innovations" could solve them.

There is an informative youtube video by MIT on how to reliably identify new "lead users" for products or services that are in demand but have not yet reached the mainstream market. We need to understand these concepts because that is where DASH is. We are at the cutting edge, where the lead users are. We need them to come to us and from that we will know what solutions we could invest in.

If you're interested in how to find new innovations by identifying "lead users" see this video by MIT:
https://www.youtube.com/watch?v=31iUEuwi740
Reply
2 points,2 days ago
Just want to highlight these key points from the DIF themselves:

- The storage of the raised funds will be decided by DAO poll (the same way the supervisors were elected)
- The use of raised funds will be decided by DAO poll (all funding decisions will be put to DAO vote)

To me it seems like the goal of this proposal is for them to build up funds gradually, which will cause less disruption to the DAO versus them coming for lump sums - the DAO will still get to vote on all decisions.

Alternatively, if this (and any subsequent DIF proposals) do not pass then the other avenue will still exist, in that a proposal can come before the DAO and offer equity to the DIF, though this hasn't been explored yet (I imagine there are legal considerations and costs that would have to be factored in).
Reply
0 points,2 days ago
Where did you get the information contained in your second bullet point?

Let's see what the updated constitution say. Frankly, I would rather see the DAO ultimately pick the investment manager and not the actual investments.
Reply
3 points,2 days ago
'...the DAO is the ultimate authority and the DIF will put a final decision to the DAO on any potential investment...' - quoting Walter from further down in the proposal comments (I also confirmed this directly before posting).
Reply
0 points,2 days ago
We need to know exactly how 5,000 masternodes make a decision in Walter's calculus.
Reply
1 point,2 days ago
I would like to suggest some changes to the DASH treasury system that would involved DIF assistance.

The problems with our current treasury system:
With our current treasury setup , and with the proposed DIF we passively wait for organisations to approach us with a good idea to boost DASH adoption. This strategy is fraught with the following problems:

1. There is no coherent long term strategy for building DASH adoption

2. We do not own 100% of the intellectual property.

3. If DASH owned 100% of the IP of an asset we build, we could then license these solutions out to organizations or individuals to build their business around around selling these solutions. This would form automatic marketing and promotions for DASH either through their existing network or starting a new market.

4. We do not know what the real motivations are of the people approaching DASH for funding. Many times we see people take our money and deliver nothing of value except promises and a good idea.

5. Without 100% asset ownership DASH is not building lasting value. Instead we are building short term promotions at best which end when the organization funding leaves us or we stop funding them.

6 . For an IT industry such as DASH the value of the network is in the Intellectual property. If we do not own this intellectual property we are losing huge amount of value.

7. By passively accepting projects we have no control over those projects. We have no control over the leadership of those projects and we have no control of quality of those projects. We also do not own the IP as stated previously.

8. We cannot overlook the project work to ensure the proposal owners are doing what they say they are doing. Too much is going on trust.

9. Most of the treasury funded projects do not have a business plan or a long term self sustainability plan. This is a waste of our investment money.

10. Currently there is no upfront screening of the organizations or individuals bidding for treasury funds. We have no clue if they are trustworthy or not. This is an untenable situation and needs to change urgently in my opinion, otherwise we are just wasting our treasury money.

11. We have no control over branding the solutions we develop. Case in point KuvaCash. Brand awareness is essential for us and hugely underrated at the moment by DASH management in my opinion.


Instead this is the improvement I suggest for the Dash Treasury:
We put together our own Dev team to create innovative solutions to problems that normal fiat cannot solve.

1. We create a project ranking system in the new Nexus govenance system. In this MNOs can suggested projects to build specific products, services or software that the network needs. Preferably software or hardware products where crypto can outperform fiat currency or would be impossible with normal fiat currency.

2. MNOs would vote for which projects we believe are the most important. At the end of several months of populating this project ranking system with projects and voting on the projects that would bring most value to the network these projects would be submitted to the treasury for funding.

3. If the MNO selected project wins funding then DIF would take over to identify developers that could build the product or service that we need. The requirements are however we own full 100% intellectual property rights.

4. We could hire a project managers to run and oversee the development projects for us.

In this way we would eliminate all the weaknesses of our current treasury system.

We would own 100% of the IP or product created.
We would have full transparency on how the funds are being used.
We could chose strategic service and projects that would boost DASH adoption the most e.g. software or services that only cryptocurrency could handle and not fiat currency. I would preferably choose projects in which it would oblige customer to have to use DASH as the only reasonable alternative. Projects in which current fiat simply could not complete with crypto. Or new markets in which crypto massively outperforms fiat. If we carefully chose the development projects we could choose to develop solutions to problems that normal fiat cannot solve and people around the world could then have their own business marketing these solutions through a license agreement. We would get free marketing as a result.
We could develop dozens of such off the shelf products.


I have several concepts for software / products we could develop which normal fiat could not address that we could build products for. However I would prefer not to post these publicly at this time.

The DIF could proactively use our network and other online services to source a team that could build these products for us. We would build valuable intellectual property and if we chose correctly we would get free marketing from organisations that would be issued a license to use our inventions.

In effect, we would commission our own Dev teams to build unique solutions that only crypto can solve, and solutions that could be used by millions.
Reply
2 points,1 day ago
Fuck IP and everything you said. Respectfully.
Reply
0 points,21 hours ago
@mikenewhouse and for all the other "Fuck IP" supporters consider these scenarios:

With ownership and license terms it means we can get greater adoption, and more people using DASH. How? We can make the license to IP innovations freely available for anyone that wants to promote DASH. Without IP ownership and a license we actually limit the distribution of our innovations.

Below I will use the example of the NFC payment system as an example but we could use any innovation we pay for and develop. The following are just a few possible scenarios but there are hundreds of others that can arise without IP ownership and licensing of our innovations.

Case 1 . The Dash Treasury funded the development of an NFC payment payment system for use at events. The core team contributed to that project and supported it. There was a few events that used that NFC DASH payment system and the developers that built it now have ownership of it. Therefore we paid for that development and we do not own it which means we cannot make it freely available to other projects that need that technology we paid for. By not having ownership and IP rights of the developed products we have actually severely limited the distribution of that technology that we paid for. If we had had an agreement that we own the IP we could have distributed this to other users through an open license.

Case 2. Following the "Fuck IP" advocates idea of no IP how would you deal with these scenarios:

We give our NFC payment technology that we develop for anyone and everyone to use as they want. Now imagine someone takes that technology puts the DASH branded sticker on it and programs the terminal so that it rips off customers by charging hidden higher fees than advertised on the screen. Our DASH brand is now damaged due to misuse of our IP. With a license we can state the requirements of the license to ensure the customer is protected. We must have the IP in order to do that.

How would you propose that we stop people from using our technology to rip others off? By the time we discover that our technology is being misused our Brand name could be damaged. Without a license terms to our technology we have no legal way of protecting our brand or going after people that are misusing our technology.

Case 3: We learn about a particular market area, we invest money to develop lead users e.g. the Parking project in Venezuela. We identify a key market area for DASH, we build contacts and teams to work in that field, we do the market research, we identify a product that fits that niche, we invest in the product e.g. NFC parking payment system in Venezuela. Then we give the NFC payment system we develop out for free to anyone with no license. Monero take our innovation, put their branding on it and patent it so that we cannot use our own innovation. Without a license and IP rights we cannot protect against this scenario.

Case 4. We give out our NFC payment system and the user of the technology does not follow security best practises for using the technology. Due to the lax security standards customer's money is stolen by employees that hack to steal from customers transactions, by the time the boss finds out about it several hundreds customers have been ripped off and the crooked employee has left the company.

Case 5. We give out our NFC payment technology without a license and a new company develops and builds on our base technology to create new features. Those new features could address a whole new market for DASH. However the company that took our work does not want to share those new innovations that they built on top of our code and patents their extensions to our code effectively blocking DASH from addressing that market in the future.

By having IP ownership and setting a fair and reasoned license agreement and terms of use, we not only can ensure more widespread use of our innovations but also we protect the customer and the DASH brand name.

There is a spectrum of IP ownership and license that we need to consider case by case to ensure that Dash's goals and core values are adhered to.

At one end of the spectrum we have the "Fuck IP" approach and the other end of the Spectrum there is complete lock-down of all aspects of the technology rights with strict license controls and patenting. My point is we need to choose at what level between these two extremes will lead to optimal uptake and use of our innovations. A license agreement that will ensure to protect our customers and the DASH brand and give us some recourse if licensees do not use our innovations in line with DASH’s core values of openness and integrity.

There is an informative youtube video from Harvard regarding selective IP that addresses these issues and shows how the IP ownership and licensing can actually increase people using the innovations, not limit it.

https://youtu.be/4KArQHLcJ4k
Reply
1 point,16 hours ago
What happened to the Evolution patents?
Are they a good example of succesful use of IP?
Reply
0 points,14 hours ago
I wrote a detailed response and then accidentally closed the screen :(

Sorry not overly convincing arguments. IP will not stop criminality. Dash has already figured out what level of IP is appropriate, same as most other open-source projects. As it relates to the DAO giving out money we either need to be disciplined and only give it out if the tech developed is open-sourced or we take equity in the entity. Protective patents address your more valid concerns.
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2 points,3 days ago
Up till this proposal I thought the DIF was used by the network to secure investments, basically that if we funded a project that the DIF would get shares of that project on behalf of the MN network.

When I read your purpose for the DIF, as a savings account, well that's not really the same thing. It's close, but I think that wording is important here.

So if I understand things correctly the point for this reserve is to be able to always be solve-able vis-a-vis contracts. For example if 200k is needed for a venture, but it's not possible to get that from the treasury, a (multimonth) proposal will be submitted, if the first month passes then the network will signal its support and the DIF can enter into a contract and use its reserve as backing. Is this all correct?

If this is the case I think the reserver should be 100% in Fiat, because most likely contracts will (for now) have to be in written against Fiat.
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1 point,3 days ago
After much thought, I would like to propose the following rules for the DIF to approve a deal and spend money for that purpose.

The DIF Supervisors must be unanimous in their decision to fund the deal, and the DAO must be polled (yes/no) for no less than three weeks, and the poll results must be at least 67% in favor.

I believe this is the only way we can prevent the DIF from wasting our money. I would like the above rules written into the constitution.
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0 points,3 days ago
Agreed that the Dao should be polled. I would suggest that instead of going for unanimity (which is consensus) you go for consent. Consensus means everybody must be on board, consent means no one wants to leave. Which basically means any supervisor can veto it. Adding this to the poll makes for a very strong system which is also flexible enough. Please see my comment below :-).
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3 points,4 days ago
Can we suggest amendments to the DIF constitution?
Who wrote the constitution?
Were the masternodes involved?

Because I have a long list of changes I would like to propose.
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2 points,3 days ago
Please let us know the changes to the DIF you want to introduce
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3 points,3 days ago
Thanks for asking. First let me say that I am a researcher that works in voting systems. I develop voting systems as part of my research. I will now write my suggestions in several points so people can comment them individually and vote on each of them singularly. Some are related to others, but many are independent.
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5 points,3 days ago
First of all I think that the 6 supervisors should not be all elected together, but in two rounds at half a term distance. So either they stay for 1 year, and 3 are voted on the 1st of July and 3 of the 1st of January, or they stay for 2 years, and 3 are elected in the odd years and 3 in the even years. This makes sure that there is time for people from one generation of supervisors to work close to the people of the previous generation. So that we don’t find ourselves with a whole new bunch of people who don’t know the job all at once. With only 6 people this is a serious risk.Should they last 2 years or 1? I am agnostic about it, but since they need to make 1 general meeting a year, probably having them for 2 years would probably make sense. The important thing is, don’t elect them all at the same time.
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3 points,3 days ago
3: Right now supervisors vote on majority. In general in committees people don’t vote in majority, but using a sort of consent. Which basically means if someone has a problem with something they try to address that problem. I speak about the difference between consensus, majority and consent in a youtube video https://www.youtube.com/watch?v=AN0rn42WNCA . I think supervisors should vote using consent, which means that any of them have veto power. But when they use it they need to explain why, and actively work along with whoever made the proposal to write a new proposal that is acceptable for them. This is how many systems work (I developed one called Vilfredo, that does it. But out there there is sociocracy, holacracy, and as I said many groups tend to work in this way in an unofficial way). We should make it the standard.
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3 points,3 days ago
Also I don’t think we should elect them with Approval voting. Approval voting is a really cool system, I love it. I use it very very often. But it is good for single winner elections, not for multi winner elections or committees. When you elect a committee there are other things you need to consider. For example how well does the committee work together as a team (we are not going to consider this, this time, but it is one of the things that in electing committee is important). How well does the team represent the people voting them. This is the key issue here. If you use approval voting you might have all the position taken by people who represent the same group of people. Imagine (this is an extreme case, it would not happen like this but I trust you will understand the weakness I am trying to address) 51% of the master nodes want to control the supervisors over the 49%. Now the 51% present 6 people, and the 49% present other 6, and the 6 people from the 51% are all elected, and none of the 49% are elected. You have practically taken away representation from half of your master node. This sounds implausible? What about when people who are similar (we call them clones in voting theory) and quite popular all present themselves. They win all the positions, but because they are so similar they will check for the same things, see the world from the same way, and not enrich the DAO supervision capability. So what do I suggest? A system which is called greedy-approval-voting. Basically you use approval voting, then you find the person with the most votes and elect that person. Then you discard all the votes for all the other candidates from any master node who voted for that person. That master node is already represented by one person. Now you count on the remaining master nodes. And so on. With 6 people you end up really representing tiny minorities (which might be too much). With 2 elections of 3 people you represent up to 3 poles, which is optimal.
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2 points,3 days ago
5: I would also add that meetings should all be public, or if we develop the technology public to the masternodes. I know this is a problematic point as many startup have key ideas they don’t want to share. Right now who asks for money from the DAO does not ask masternodes to sign an NDA, and it is not really feasible (or it is? With cryptographic signatures, and a different version of the documents being shared? Any cryptographer out there? ). So making all meeting public would lower the DIF power, making it more similar to the Dao. On the other side this might become an advertisement about what Dash is doing (I am, for example, following Aragon developers meetings even though I haven’t invested in Aragon… because well, they develop in Ethereum). In any case this suggestion is independent of the others, and I would even see well two different DIF one with public meetings (to which I would grant more money as a MNO) and one without public meetings.
And yes meetings of the Dash Trust should also be public but this is another story.
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2 points,3 days ago
4: I don’t like the fact that supervisors can modify the constitution even with a supermajority vote. This is particularly something where I would want to have all supervisors consent. And then two votes from the master nodes at distance of 3 months. This is how many constitutions are changed (the Italian one for example), and the 3 months of distance makes sure things cool down enough that people don’t accept something and later regret it.
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1 point,3 days ago
6/6: There are a lot of other things that I would like to see happen to Dash to make it become a mature Dao where the Dao takes direct actions instead of just answering to requests with simple yes/no/abstain. But here are just the points for the DIF constitution.
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2 points,4 days ago
Who came out with the idea of the DIF? Did the Dao (we, the masternodes) in the past asked earlier for this? On what base?

It is not clear to me the relation between the DIF and the Dash Trust. Especially considering some people serve in both (which seems not a good idea).

Also I saw the meetings of the Dash Trust were not transparent nor available. And I fear the same will be for the DIF. All this is moving the Dao in a direction of less transparency, less direct control from the Dao, and more toward a representative kind of system. Do we really want this?

All the power resides in the Dao is like saying that in a democracy all the power resides in the people, which is true, but as power becomes less direct and more people get in the way, there are more opportunities for power to be used in the wrong way. Who is to control that this money is not given to someone's friend? Something not possible under the direct dao management. The Dash Trust? The same that should control over the DCG and that has the same people as trust protectors and DIF supervisors?

You see why I have a problem?

But maybe I am missing informations. Was there a previous history? Something was not working (like the 5 dash being too high) and thus we asked Ryan to come up with a solution? Do masternode even have a way to voice their opinion except with yes/abstein/no votes?
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-3 points,4 days ago
Unknown MN accounts coming out against the first ever owner less investment fund. Don't allow these troll MN accounts to persuade you. They greatly fear what Dash is attempting to create, like they have feared what Dash has created in the past. They do not want to see a world where decentralized projects can control more than just their own investment money.
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1 point,3 days ago
Calling someone a troll MN simply because you disagree with them is something a troll would do. Who are you anyway? Actually, who cares? This is a DAO not a popularity contest
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2 points,4 days ago
It's not enough to SAY that you are decentralised. By this standard even representative democracies are decentralised. Masternodes must have much more direct power in DIF.
Before judgine me as an enemy of decetralised projects hear my full proposal on how the DIF should be managed.
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-1 point,3 days ago
But we shouldn't resort to troll comments like yours to convince our fellows
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2 points,4 days ago
I am inclined to vote for this, but I would like to see the DIF's constitution completed before I do. IMHO, this should have been done BEFORE the website and social media went live.

If the constitution is not completed by this cycle's voting deadline, I will probably vote no.
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1 point,2 days ago
As per the update posted today in the proposal's last section, the constitution has been approved by both directors. Thanks.
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2 points,4 days ago
Fair comment. We are working hard to get the constitution finalised. We also intend to poll the MNO's for confirmation of its preference of the asset type(s) in which the DIF’s liquid reserves are stored. The result of this poll will also need to be added to the constitution.

Thanks

Walter
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1 point,4 days ago
Sorry, but it's not enough to ask the masternodes to confirm it. How can we suggest edits? How can different versions be compared and voted on? I would suggest several changes in the way the DIF voting works, and the DIF is controlled by the masternodes. I think until all this is in place I will also vote no. Read it as a "not yet"
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0 points,4 days ago
please provide a version of the constitution that can be commented.
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3 points,4 days ago
What i do like about the DIF is that for now they want to poll the network on each promising looking investment opportunity. I think thats a good way to get a feeling for how the network views these investment opportunities.

I'm not totally sold yet on reserving 9% of our budget this month for DIF''s reserve build up. Is it just a reserve build up or are certain promising investment opportunities already part of that 9% of budget / 512 Dash calculation ?
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5 points,4 days ago
I'm sorry, but it was always my understanding that the DIF would take the equity offered in exchange for a successful proposal and manage it, not go off on it's own looking for investments and making deals?!
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1 point,1 day ago
This is what I understood, as well. That the DIF has been created to do exactly what the now deceased DASH Foundation was intended to do.
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4 points,4 days ago
https://www.youtube.com/watch?v=1F9oXntVfNc&feature=youtu.be

timestamp 55:45

''DIF is a memberless and ownerless investment fund that can make investments on behalf of the DAO or can take ownership of proposal owners equity''
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2 points,4 days ago
Voting no.
The breach of contract should not be a problem if the contract is written correctly in the first place.
The DAO changing its mind is a strength not a weakness.
The 10+ companies referenced is insulting. Tell us who they are or don't mention them at all. Treating it like a treat and us like dogs is a bad forewarning of what we are getting ourselves into.

If the DIF wants 9% of the budget, they need to do a much better job explaining why. The DAO budgeting system is not perfect but being able to enter into contracts, take equity, etc is a great upgrade to its capabilities.

All this other stuff is fluff and/or a power grab. We have created an entire ecosystem and process here for the DAO treasury. Explain to us, why, in details even a moron like myself can understand, why we need to disrupt this flow and add complexity, counter-party risk, and human politics.

For instance, the DIF will be paying the 5 dash fee for the proposals they like- with funds from the DAO treasury - what? Seems pretty corrupt to me. Small detail now, big in the future. We are making these people gatekeepers with way too much power. When let's be real, noone knows if they are qualified.

I might sound unreasonable, unnecessarily conservative, and rude. But that's ok. Don't fix what isn't broken.

If the DIF can come to us and say, listen McDonalds wants to integrate Dash but we need to do this, this and this, that is another story.
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3 points,4 days ago
"Don't fix what isn't broken." - OK, so Ryan just wasted 2 years coming up with this whole solution for no good reason?

The charges of this being a "power grab" are unfortunate and I think they are misinformed. The DAO controls the DIF 100% and has direct authority - via blockchain governance - on:
a) how much Dash is put into the reserve
b) what is funded
c) how it is funded
d) who is put in place to supervise the organisation on behalf of the network.

I'm not sure what magical super powers you think you've granted to Supervisors? is there something we've missed from the list above?

Thanks

Walter
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0 points,11 hours ago
"so Ryan just wasted 2 years coming up with this whole solution for no good reason?"

I would suggest that he who created this solution should clarify us of what exactly is this solution trying to solve. Because it seems to have created greater problems, by inserting the unnecessay complexity of having a DIF to make decisions on behalf of the DAO... when the DAO is perfectly able to be making decisions directly, instead.

It would be acceptable if the DIF, instead of the defunct Dash Foundation, had the role of "personification" of the DAO, when agreements need to be signed, or rights need to be held. But it was clarified elsewhere that this is already the role of the "Trust"....

... so, what problem is the DIF trying to solve again?

Is it some sort of Venture Capital firm? It is new to me that a Dash communal VC firm (or the lack of it) was seen as a problem here.

It seems to be a luxury, not a necessity. A dangerous luxury, as it opens a sensitive flank of bureaucracy, complexity, corruption, vulnerability.

If I am wrong here, it is certainly because I failed miserably to understand what this solution is about.
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0 points,4 days ago
Walter I think you had to try to misread what I am saying. The DIF is cool. Ryan certainly did not waste his time. The network can own property and enter into contracts, this is amazing. These are the main (potentially only) benefits of the DIF. We can have these benefits without making any more changes at present to the DAO funding system.
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2 points,4 days ago
Also - "The breach of contract should not be a problem if the contract is written correctly in the first place."

There is also the reality that any negotiating position and credibility the DIF has is going to be weakened substantially if a) we don't have the funds, and b) we have to go to the network for x number of months to get the funding before we can close a deal.

We are talking about doing business now, this is a totally different world to the grants-based system us MNOs have been accustomed to. In our grants-based system the DAO has all the leverage, as the proposal owner wants the money in return for promises. It's totally different going into negotiations where money is exchanged for equity. You need a strong hand in any form of business negotiation to get a good deal.

Sure, the DAO is the ultimate authority and the DIF will put a final decision to the DAO on any potential investment, but that's a lot easier for a potential partner to accept than "hey, we'll take $200k of equity but we want 20% of your business not 10%, that's our final offer. BTW, you don't mind waiting 6 months for the money, do you? We haven't got it yet, and there's a chance we may not get some of it at all! We can put all that in the contract though, so we don't get any exit penalties should we change our minds. So do we have a deal then? .."

Thanks

Walter
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1 point,4 days ago
I don't mind. Any company that wants to get into business with a DAO should know what they are getting into. They are coming to us for money, we hold the power in the negotiation.
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0 points,4 days ago
It can also swing the other way when you have a promising investment opportunity where everyone (read: other angels and VCs) wants a slice of the cake because it looks so good. Now who has the power?
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0 points,4 days ago
great so it gets funded and Dash doesn't need to spend any money.
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0 points,10 hours ago
Perfect. It is not DASH's role to buy and own the entire ecosystem around us in order to be successful. Dash aims to be digital cash, and not a VC nor a communist country.

If a great idea needs investors (and was not able to find proper VCs) they can find many possible investors among the private users, MNOs, etc (not only here... crowdfunding, for instance) But, let investors invest and risk their own money.

Dash, having an entity that exists for the sole purpose of spending money, will, most probably, waste money.

It is not ethical to "create inflation" and thus deteriorate each Dash holder's pockets in trial and errors with communal funds.
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-1 point,4 days ago
> the DIF will be paying the 5 dash fee for the proposals they like- with funds from the DAO treasury

To avoid the 5 dash fee (instead of allowing it to be burned, let it be ~~sold~~er... I mean invested), what if they used a the method to vote for the foundation members and trust protectors, like so: https://dashwatchbeta.org/elections
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1 point,4 days ago
Why the downvotes? What's the disagreement here?

Using the same software as we did for elections, we can avoid any 5 dash proposal fees. If there are many investments to consider, that could eat up an unnecessarily large part of the treasury.

Election software: https://blog.dash.org/trust-protector-election-software-93ed67c7455b

Or do you guys not want the DIF to have any "funds to invest" at all, so no voting would be required?
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3 points,4 days ago
Hi, Henry. As you see in the proposal's repeat usage of the term "vote/poll," we are already actively exploring polling as a way to get faster, cheaper answers from the network. Our first poll, regarding reserve asset types, can be expected in the coming days via DashWatch. Thanks!
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0 points,4 days ago
Right now, if nobody else submits a proposal this month, with continuing funding and room left in budget, we can afford this.
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-1 point,4 days ago
Voting Yes.

Let us see what the first decentralized venture fund can do.
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1 point,4 days ago
Voting yes you need a buget to work with and proof yourself
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-1 point,4 days ago
As an "Investment Fund", the DIF ought to have funds readily available to invest - and a far cry more than $40,000. This is a good start, but I would like to see ongoing monthly funding so as to build up a more formidable war chest.
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0 points,2 days ago
Step by Step

That is the objective, Dash project. Now Dash have DIF as a legal entity & , We can do now more institutional & business quality partnerships.

Now, Dash's priority as project with its ->> legal execution arm<<- for partnerships (The DIF) is to make quality partner.

1) Exchange (reduce the Dash fees near to 0 to boost its acquisition).
2) Payment processors (for give international support to business-merchants to low cost)
3) Fintech companies ( more easy for synergies with fiat for have more liquided)

Now we are on a good road to get all that, in the first phase.
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