Reclaiming unallocated dash treasury funds

Introduction

Dash makes 10% of its coin emission available through its treasury. Proposers submit budget proposals for masternodes to vote on. If masternodes vote in favor of a proposal it gets the requested funds. This happens in 1 month cycles. Full details here.

Dash should decide whether unallocated treasury funds will be reclaimed in the future and how this will be done. This decision should be put to masternode votes and be implemented in the protocol. This will allow us to make better budget decisions and help make dash sound money.

Unallocated treasury funds

Available funds that are not used in treasury cycles are not burnt, rather they are never created. Evan (dash creator), Ryan (Dash Core CEO) and others have said these unallocated treasury funds could be reclaimed in the future.

As stated at several points in the past, dating all the way back to 2015 when the governance system first launched, the possibility exists to “resurrect” unused funds and allow them to carry over from previous periods. Although the protocol does not currently support this functionality, we as a network can choose to implement that without affecting the committed emission limits. This would provide the network greater flexibility to “save” its treasury budget for when the funds are needed, and eliminates the perceived need to spend funds simply because they would otherwise be wasted. Funds saved in this way are likely to be worth a great deal more when spent in the distant future, for a much greater purpose than simply filling up the budget limitations each month.
We could easily resolve the question of whether unused budgets should be rolled over to future periods through a simple network vote.

Source: An Open Letter From Evan and Ryan Regarding Dash Marketing – dash.org forum June 28th 2017

There are 2 main advantages to clarifying if and how unallocated treasury funds will be reclaimed.

  1. Allow masternodes to make better budget decisions. We will know if we don’t fund a proposal, whether those funds are gone forever or if they can be used for something better later.
  2. Help make dash sound money by clarifying the coin emission/inflation. Working with a dash core dev we estimate unallocated treasury funds are about 45,000 dash, that’s $35 million USD and 0.6% of all dash and it’s growing every month. Its reasonable for dashians to want certainty over such a large amount of the money supply.

The rough calculation for unallocated treasury is


current theoretical max coin supply – current coin supply

which is approximately


7,784,590 – 7,739,590 = 45,000

We should not leave this issue unresolved until dash is a huge ecosystem and there are more good proposals than the reducing treasury allocation can fund. Delaying a decision will make it a bigger and nastier issue later.

Options for unallocated treasury funds

The courses of action available fall into 2 main categories

  1. Reclaim unallocated treasury funds in the future.
  2. Do not reclaim unallocated treasury funds in the future.

Then there are multiple ways to do either of those things with details that need to be implemented in the protocol.

Reclaim unallocated treasury funds in the future

When and how? Here are some options.

Roll over
Roll unallocated funds over to the next treasury cycle so the total available every treasury cycle is the normal 10% of coin emission plus all unallocated treasury funds from previous cycles. This would give us a huge available budget but we would be under no pressure to use those funds since unallocated funds would be rolled over for the future, potentially for hundreds of years.

Eventually when the monthly treasury allocation reduces and we have a lot of good proposals we can gradually start dipping into the rolled over funds.

Maintain available treasury funds at a certain level
When the 10% of coin emission available for the treasury gets below a certain level, keep it at that level rather than letting it continue to decline with coin emission reduction.

For example, the current dash treasury is 6652 coins per cycle. That will reduce to around 100 by around 2077. We could keep it at 100 until all unallocated treasury funds are exhausted.

The funds available during the 100 coins per cycle phase would be made up of both the normal 10% of coin emission plus however much previously unallocated treasury funds are required to bring the total to 100. Within that 100 dash per cycle phase there would still be unallocated funds in some cycles, they would be tacked on at the end of the 100 dash per cycle phase to extend it even more.

This would greatly extend the life of the treasury system, keeping it humming along at 100 dash per month for hundreds of years, long after it would have otherwise stopped.

Accumulated unallocated treasury fund operating in parallel with the monthly treasury cycle
Have a separate fund of accumulated unallocated treasury from which masternodes can award funds to proposals like they can from the monthly treasury cycles. When proposals are made, the proposers have to nominate if they are making a proposal to the monthly treasury cycle or to the accumulated unallocated treasury fund.

Something completely different and separate from the existing treasury system
Make unallocated treasury funds available as a special project, bounty or emergency fund. We could use these funds for a completely different component of the budget system which does not exist yet.

For example, make a bounty system where masternodes can request something and then proposers bid to be chosen by the masternodes to reserve the bounty. The successful bidder then receives 1/3 of the funds at the start of the project, 1/3 of the funds at a milestone in the middle of the project and 1/3 of the funds upon completion.

Do not reclaim unallocated treasury funds in the future

Again, there are a few ways to do this with details that should be settled on.

Burn them all
The only way to be sure that unallocated treasury funds are not used in the future is to create them and burn them. Dash would have to create and burn all past unallocated treasury funds and implement a protocol change to create and burn unallocated treasury funds every cycle in the future.

Change nothing and keep options open
We can keep the status quo of not creating or using or burning or doing anything with unallocated treasury funds. There are 2 arguments in favor of this

  1. Maximum flexibility for the future. If we implement any of the above options now we will be committed to it. It will be difficult to change what is done with unallocated treasury funds in the future. If we do nothing we have all the above options available to us later.
  2. If it ain’t broke don’t fix it. Dash is doing well enough and the devs have a big enough workload as it is. There is no need to tinker with things that are not problems.

If this is what we are going to do it should still be clarified by Dash Core as the “official” plan/decision and put in the docs. It could still be the result of a masternode vote.

What’s next, masternode votes?

The question of what to do with unallocated treasury funds should be put to masternode votes. Unfortunately it’s not possible for masternodes to choose between more that 2 options in a governance proposal, they can only vote yes, no or abstain. This means we would need to change the voting system to allow multiple choices or we would need to do a series of rounds of votes.

We could start with a simple vote on “Should unallocated treasury funds be reclaimed in the future?” (with abstain signaling change nothing and keep options open) and based on the result of that (if it’s not abstain) put a series of options of how to do it to rounds of voting where the least popular option is eliminated each round.

At 5 dash for each vote this would be costly but well worth it. If masternodes voted yes to “Should unallocated treasury funds be reclaimed in the future?” and were then presented with 4 options of how to do that in the 1st round, then 3 options in the 2nd round and then 2 options in the last round, it would total 10 votes costing 50 dash ($37,000 USD).

Alternatively an individual or group could pick one particular course of action that they favor, such as roll over as mentioned above, and propose that as a stand-alone vote.

Leave a comment

Your email address will not be published.