In 2015, Dash created cryptocurrency’s first decentralized autonomous organization, or DAO for short. Yes, it appeared even before the infamous project of the same name (The DAO) that self-destructed and ended up taking half of the Ethereum network with it. DAOs can be complicated creatures, with lots of features and nuances that are not readily visible to the casual observer. Dash’s DAO has an interesting structure, but it’s one that can lead to some misconceptions.
One of the biggest misconceptions that I’ve seen over and over and over again is the title of Ryan Taylor. Mr. Taylor is not Dash CEO, he is the CEO of the Dash Core Group. This erroneous statement has been repeated in headlines, and in more articles and videos than I can count. I understand the confusion, as it’s not something that’s explained regularly, but this mistake does tend to hurt Dash in an industry that values decentralization.
Ryan Taylor, the CEO of the Dash Core Group, not Dash.
What’s commonly understood (Dash CEO)
Most publications that interview Ryan Taylor or report on something that involves him have had the tendency to refer to him as “Dash CEO“. I’m not sure about you, but when I hear that someone is CEO of a company or organization, that means that this person calls the shots. The buck stops with him. How does that apply to Dash? Well, I’m sure that some people, upon wrongly hearing that Dash has a CEO, would think that he could change the issuance of Dash to give more to him and his cronies. Or he could eliminate Dash’s PrivateSend feature because he saw a documentary about how private cryptocurrencies fund terrorists. Basically, having a Dash Chief Executive Officer is against the very raison d’etre of cryptocurrencies.
There’s no way that this misconception has not affected Dash over the years. Who knows how many willing investors or contributors steered clear because of the belief that Dash is centralized around one man? This simply needs to be cleared up.
What’s actually reality
Dash has a ground-breaking system that melds new-world technology with old-world legal systems. This straddling of the two worlds leads to some pretty innovative solutions when it comes to project organization. Here’s how it works.
The stewards of the Dash network are masternode owners. Masternodes are advanced servers that power Dash’s decentralized second-tier network. They perform valuable services for the main network such as providing security, enabling fast and optionally private transactions, and voting on budget and governance issues.
The Dash Core Group, of which Ryan Taylor is currently CEO, is the Dash DAO’s largest contractor based out of Delaware, USA. They are responsible mainly for the development of Dash’s core code, but they have some other functionalities such as a small marketing team. I say they are the largest, because they are not the only contractors that receive funding from the decentralized budget. There are quite a few organizations that make up the DAO.
The beautiful new Dash logo was a direct result of a masternode vote.
So, in what ways, and how exactly can the masternodes (the stewards of the Dash network) affect the Dash Core Group (the DAO’s largest contractor)? Well, the masternode network has two tools at its disposal to affect the change or direction it wants to see the currency go in. I like to call them the hammer or the scalpel.
The hammer is to simply defund the Dash Core Group. Every so often, the Dash Core Group must return to the network to receive the funding it needs to continue operations. If the masternode network is displeased with the progress of DCG, they may vote to defund the whole operation. While being an effective mechanism to ensure that DCG is performing adequately, this method is very messy. Problems that could arise is lack of development on the core code leading to stagnation, and coders going rogue and absconding with key aspects of Dash that may never be seen again. It would be foolhardy to think that these things couldn’t happen with a blunt defunding.
The Dash DAO needed a better option. Something more precise than the defunding hammer. The scalpel they came up with is highly innovative, but it’s also what causes the confusion within the ranks of casual observers. Enter the old-world legal system. What Dash did was to create an irrevocable trust that owns the Dash Core Group. This trust is based in New Zealand and has the power to affect change within the Dash Core Group in a more granular way than a complete defunding. For example, if the trust was not happy with the performance of a single member of the executive, they could vote to remove and replace just that underperforming member. Ryan Taylor, the Dash Core Group’s current CEO, falls under this umbrella as well.
That’s all well and good, and gives Dash a better option to affect change, but you may be wondering: Who owns the trust? Who decides when and how to enact these changes? That’s the cool part. The decentralized masternode network, which is controlled by no one, and votes on every important Dash DAO issue, owns the Dash DAO Irrevocable Trust. This has never happened in Earth’s history, a decentralized entity owning a registered company through a trust. Truly groundbreaking.
The Dash DAO Irrevocable trust allows the MNOs to remain anonymous.
What this relationship means
So, to recap, the decentralized owners of Dash’s masternodes own the Dash DAO Irrevocable Trust. The Dash DAO Irrevocable Trust owns the Dash Core Group. So, in effect, the masternode owners own the Dash Core Group and all of its intellectual property (code being the biggest one, but all the aspects of their operations). Now you may be wondering, why didn’t Dash set it up so that the masternode owners directly owned DCG? Well, this is where the preservation of one of cryptocurrency’s core tenets comes in.
If the masternode owners were to apply to own DCG directly, they would have had to undergo KYC and the names and information of all of the masternode owners would have had to be revealed. Sellers would have to let them know, and buyers would have to register. This would be a terrible disruption to Dash’s current functionality, and not feasible. So, this was the solution Dash arrived at, which allowed ownership of DCG through a trust, and provided a more efficient means to affect change without the blunt and messy option of a complete defunding.
An example of this dynamic in action
By now, you should definitely understand that Dash does not have a CEO. Let’s take a look at what could happen hypothetically if Ryan Taylor rested on his laurels and stopped working hard in the promotion and development of Dash:
- The decentralized masternode owners (MNOs), becoming increasingly discontent with Mr. Taylor’s performance, reach the decision to remove him from his position.
- A governance vote, put to the network and voted on by the MNOs, overwhelmingly passes in that governance cycle.
- The Dash DAO Irrevocable Trust, following the wishes of its ownership group (the MNOs) and using its power as owner of DCG, officially relieves Ryan Taylor of his position as CEO of Dash Core Group.
- Ryan Taylor would be legally bound not to take any intellectual property from DCG upon his dismissal.
As you can clearly see in this example, it is the decentralized masternode owners who call the shots in the Dash DAO. They vote on proposals, governance motions, and monitor the performance of the Dash Core Group. They have the power to affect change in every aspect of Dash’s operations. As such, Dash is very much a decentralized entity and respects the cryptocurrency ideal.
So, the next time someone tells you that Ryan Taylor is Dash CEO, point them in the direction of this article and politely inform them that they are mistaken.
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