Perhaps I’m being slow here but can someone tell me how NEM development and expansion is financed? In particular, I’m thinking about the success that dash has enjoyed by allocating 10% of rewards and then having their masternodes vote on proposals (internal and external).
I like what NEM has achieved so far but I also really like dash’s funding model Can someone enlighten me please and / or tell me if there are any plans to do something similar.
I do agree with you. Having a treasury is a beautiful way to finance the promotion and development of a cryptocurrency. That way a Decentralized Autonomous Organization can take care of itself and is not dependent on external resources (contributed by parties with potentially an agenda of their own).
With a POW chain you can always make more blocks and give some of that towards development. In NEM, we knew that was going to be possible, so we set aside some funds from the start to fund development. Just guessing I’d say we still have 90% or more of those funds so we have money for a long time for development.
He is a full report on our funds. https://blog.nem.io/update-sustainability-fund-final-redemption-numbers/
I am also looking into getting a voting center built, at which point we can hopefully get some more community styled voting options and governance going.
Not to mean harm, but I think an ongoing and autonomous fund is much better received by the wider business and crypto community. In dash’s case, anyone can submit a proposals and the blockchain pays them automatically if they get 10% net yes votes. There is no central or manual body approving things and that’s really what people are attracted to; that the blockchain is directly paying them, potentially on an ongoing basis.
Regarding voting (and development in general); as a relatively large investor in other crypos, I would say NEMs goal should not simply be to get the jobs done, but to take a more aggressive approach in getting things done. Crypto is such a fiercely competitive and unforgiving space.
From the FAQ page- How was NEM distributed initially?
8,999,999,999 NEM were distributed to 1,500 initial stakeholders and to several multi-signature secured funds for marketing, distribution to late redeemers, operational costs, development, node rewards etc.
I am interpreting this to be NEM were a part of the DEV funding negotiations to the stakeholders and secured funds.
Some links to back this up:
Another doc for proposals are made is here… not sure how current this is… but a start?
This fund seems very centralised and subjective. When the fund runs dry, what will keep the momentum going?
I apologise if my comparison with dash grates a little but I truly believe the reason they are the #3 crypto is because of their autonomous and ongoing funding model. I’m not saying they’re perfect (far from it), but it is their killer feature and NEM would do well to copy them.
Even though NEM is #8 on CMC, I feel NEM is running a very low profile and it’s a shame because I’d love to see it blossom.
To me- based on the amount of $$ a person needs to harvest ($1200 at current XEM value)- the amount of money a person needs to run a supernode ($41,000 at XEM current value)… 4.2 million aside for other project proposals (at current value) -
there has to be some sort of mechanism for extracting or running off this latent value. For it to just be sitting in nodes and transaction fees does not make sense to me. I ran across this document of the NEW Foundation where Trusts are setup. Perhaps this is being used to pay salaries of those in Foundation - somewhat like Dash…but at a higher more executive level (it seems).
That was very useful, thanks.
I consider dash and NEM to be hybrids of old and new, but it’s looking like NEM is far more centralised and old-school. I’m not so sure NEM can last in it’s current format because it seems to me, when things go wrong, this foundation can be held to account far more easily. If I understand correctly, end users and Supernodes have zero voting rights so I can’t even use the analogy of “share holders”. Sure, they might allow people to vote on some things but it doesn’t look like the blockchain will be paying them directly, it seems just a handful of people in the foundation will distribute at their own discretion. It’s a shame really, I had higher hopes of NEM.
i dont see Dash and NEM as hybrids… NEM is formalized. But - until they lay out what the criteria will be to be a member of the foundation… that will be the moment of Truth for a lot of people. The put this in a letter- not a video. So its a bit impersonal IMO. Dash has videos and put faces with names… and of course run off the masternode system. I find it very strange that people would be paying close to 41k for a supernode right now on NEM… but could potentially not be a member? Who knows? They havent laid the criteria out yet. So I guess Ill just wait and see then make my assessment of all this.
Given Dash setup- seems similar to NEM’s doc… in that they both are establishing Foundations with members.
Yes, but dash isn’t keeping money back to pay it. Dash Core could theoretically be defunded any time by the Masternodes, though it’s highly unlikely to happen any time soon! There’s a lot of behind-the-scenes work that dash does and their youtube channel is getting better at communicating such things.
So it seems NEM is a lot more centralized than Dash right now. In the beginning that might not necessarily be a bad thing though. While Dash was always limited to its 10% treasury regardless of the value of the currency, the NEM Foundation can spend higher amounts at the beginnen and then reduce that number when XEM value increases.
But as jabo38 said, plans are already in motion to introduce some kind of community voting. And a community could vote for introducing a treasury some day, when the funds run out.
So I would strongly suggest to establish a treasury eventually, because then NEM is a self perpetuating DAO.