How Does Dash’s DAO Work? | DASH: Detailed

Well, hi, there. I’m Amanda B. Johnson, and you’re watching DASH: Detailed.
What is a ‘DAO’? Or, its long version, a ‘decentralized autonomous organization?”
These things aren’t in dictionaries yet, you know.
A DAO can be summed up as an organization of people who communicate with each other via a ‘network protocol,’
which is a fancy way of saying they talk to each other with their computers.
And with this protocol being communicated with computers, two things are achieved in a DAO:
one, consensus, or an agreement upon what the protocol should do,
and two: the execution thereof.
Bitcoin was the first DAO, and its participants are its miners.
The protocol is the Bitcoin protocol, the miners decide what it should look like, and bam — there you have it —
the most basic, rudimentary DAO.
And hence, all digital currencies that are forked from Bitcoin or similar to it are also DAOs — basic ones.
So why am I talking to you about the Dash DAO?
What’s so special about it?
Well, a lot, actually.
Now let me start by saying we would do well to remember that DAOs cannot function without a sort of money incentive.
Now you’ll remember that in all digital currency networks, the base layer of people generating the blockchain —
they can be called ‘miners’, or in proof-of-stake they’re called ‘stakers’; in yet other networks they’re called ‘witnesses’ or ‘validators’ or ‘forgers’ or any number of things
— all different words for one role: the people who generate the blockchain.
And they get paid to do it.
Now, lead developer of Dash Evan Duffield
smartly realized that it takes a lot more than the single job of mining
to run a network that hopes to one day act as currency for millions of people.
And since, as I mentioned before,
DAOs cannot function without a monetary incentivize,
Duffield realized that the ‘block reward’ — which is the new coins created in any network (another word for inflation, really) —
ought not be going 100% to the one job of miners.
So many other jobs need to be filled.
And hence was Dash’s more sophisticated DAO born in August of 2015
Let me show you its makeup.
Dash’s block reward is divvied up in three parts.
45% goes to its miners.
Another 45% goes to its masternodes — we’ll touch on that more in a moment.
And 10% is set aside to hire whatever other jobs or fund whatever other expenditures the Dash network deems necessary.
Now, this might seem like a small, insignificant detail: the block reward is divided.
Big deal.
But actually, it makes all of the difference,
because it enables the hiring of everybody who works for the Dash network,
rather than miners consuming the entire revenue stream of the network.
With this 10%, Dash is able to hire —
mind you, without grants, without corporate sponsorships, without deep-pocketed foundations —
its own developers, marketers, researchers, administrators, auditors,
and anyone else the network might deem worthy to hire at some point in the future.
And the DAO aspect of it all is how these people are hired,
which is to say, they are voted in money.
See, in addition to performing the essential functions of PrivateSend for fungibility
and InstantSend for instant confirmations,
the masternodes also get to vote on how to allocate this 10% of the block reward.
Their votes are seen as the best way of deciding who Dash should and should not hire to do what, or not do what,
because each of the masternodes has locked down at least 1000 Dash as collateral,
meaning you have to prove that you have a significant stake in the outcome of these votes in order to vote.
And these funds have been used not only to hire on the aforementioned list of roles
that any decentralized organization might need,
but also to, for example, purchase the domain;
to purchase a prototype of a vending machine that’s been used at conferences to showcase how Dash’s instant confirmations work;
to purchase development hardware;
to sponsor conferences;
heck, even to cover the attendance costs of the people that the network sends to conferences sends to give speeches there.
In fact, dear Internet friend,
this show — DASH: Detailed —
is funded directly by this 10% of Dash’s block reward.
As a testament to the efficacy of its DAO
(and any good DAO has but one goal — to increase the value of the network),
the market capitalization of Dash,
since its DAO got more sophisticated about 10 months ago,
has tripled, increasing from under 20 million US dollars to nearly 60.
Well, that’s Dash’s DAO in a nutshell.
And you may be wondering, how can one get involved? How does one become a masternode?
Especially if one does not own 1000 Dash?
What an apt question you ask,
and I’m happy to report that the next episode of DASH: Detailed will be geared precisely toward you,
and contains some unexpected information that goes by the name Decentralized Masternode Shares.
Oh, my.
Until next Wednesday, I invite you to visit any of Dash’s social channels.
There’s, of course, the subreddit dashpay.
The forum,
And in the description below,
you will find an invitation link to Dash’s Slack,
where free Dash sometimes rains from the sky.
And finally, a hearty congratulations to Fort Galt,
which is an entrepreneurial community in Valdivia, Chile,
which is now accepting Dash for real estate.
If you or yours or someone you know is beginning to accept Dash in their business and you’d like a free shout-out on this show,
just shoot me an email at amanda at, and we’ll get you hooked up.
See you next Wednesday.
What stands between digital currency and mass adoption?
Some say there has yet to be a ‘killer app’ invented…


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