What Is The Dash DAO?

The Dash DAO is a Decentralized Autonomous Organization. Unlike traditional organizations, there is no head of a DAO. There is no CEO or centralized leader dictating the actions of the organization. In the Dash DAO, decisions are made by the masternode network, a decentralized and permissionless network that anyone in the world can be a part of. There are currently around 5000 anonymous masternodes distributed throughout the world. 

In traditional cryptocurrencies like Bitcoin, 100% of the blockreward goes to the miners as a reward for securing the network and adding new blocks to the blockchain. In Dash, that reward is split where 45% goes to the miners, 45% goes to the masternodes, and 10% goes to a grant system, colloquially called the Treasury. Once a month there is a superblock where the 10% slice of the blockreward is distributed to proposals that have been submitted to the network and voted upon by the masternodes. It is this distribution of newly created coins as voted upon by the masternodes is what makes Dash a DAO. 

One of the main advantages of a DAO is that there is no central point of attack or failure. In a traditional organization with a hierarchical structure, if one were to compromise the head of the hierarchy, either by hacking or by law, one could effectively shut down that organization. Since there is no centralized hierarchy in the Dash DAO, there is no single point of failure. This organization, which Dash pioneered, has turned Dash into a literally unstoppable force. No amount of force, coercion, or law enforcement can stop Dash from functioning. 

Because of this voting mechanism, Dash is considered to be a “governance” coin as the network has a structured means of effecting change by voting on which teams get funding. Bitcoin and other traditional cryptocurrencies do not have a structured form of governance. This leads to a lack of coordination of direction and does not give the community a means to have a tangible say in how the project is developed. If the community doesn’t like what the developers of that project are doing, their only recourse is to fork the project and start a new coin which leads to a dilution of talent for both the original project and the forked project. With Dash on the other hand, since the development team is funded by the proposal system, if they development team isn’t performing as the community demands, the masternode network can vote to defund the team and instead fund another development team. 

This lack of governance also leads to centralization of developmental control. With non-DAO’s, since the development team isn’t funded by the network directly, development is at risk of being compromised by external corporations or other legacy establishment organizations. A prime example of this is how Bitcoin’s development has effectively been taken over by the Blockstream. By having the development team funding controlled by the masternode network, the development of Dash is truly decentralized and resistant to corruption as the development team can’t be compromised by outside forces. 

In order to truly understand what the Dash DAO is, one must understand the underlying structure. Please stay tuned for future posts explaining how each of the elements of the Dash DAO work and how they relate to each other.