Ninjastic
PostEdited versionsQuotes to this post
Post
Topic
Board Announcements (Altcoins)
Re: [ANN][DASH] Dash | First Anonymous Coin | Inventor of X11, DGW, Darksend and InstantX
by
afreer
on 03/02/2016, 18:31:08 UTC
Quote from: eduffield on February 03, 2016, 05:40:22 PM
Quote from: afreer on February 03, 2016, 05:28:19 PM
Quote from: eduffield on February 03, 2016, 04:07:37 PM

Option A: If the price falls, we don’t pay out the contracts. In this case we’ve made a contract and burned the bridge with a contractor doing ongoing work. This makes our network unusable long term.

Option B: The proposal system could create unpredictable inflation based on the promises the network is making for USD based contracts.

Option C: We allocate in Dash to avoid all of these issues and don’t support USD based contracts at all.

Option D: We give the foundation a budget to take Dash and convert it to fiat, then it keeps the fiat in a bank account. The contractors would contract with our foundation directly and this bank account would serve as a volatility buffer.

Option E: We allocate only X% of the budgets according to the historical volatility of the currency. This can be calculated by taking two standard deviations from the average price history for a long period of time, then figuring out a high and low price threshold. However, this will still result in contractors getting burned once in a while.


I like Option C.

Because I think the current problems are for contractors who win contracts that involve settlement to a 3rd party in a particular FIAT (which happens to be all USD right now), e.g. acting as an agent between the network and the upstream supplier or a contractor and a subcontractor.  

Dash's contract is between the network and the contractor (regardless of their upstream chain for goods or services) and it would be a minefield to start adding other currencies into the core agreement between the network and the contractor (whether they are a supplier or an agent).

If suppliers are acting as agents for a 3rd party supplier then they really need to carry the fluctuation risk the same as happens in the real world.  For example if I award a contract to manufacture my socks to a company in Guangdong in RMB and they get the cotton from India and INR drops against RMB, that's the supplier's problem, they can't come back and say 'exchange rates changed with one of my suppliers so i want more money than we agreed'.  Likewise if I hire a patent lawyer in London who takes Dash and he needs to pay for searches in USD and Dash drops against USD, that's his risk and it should be priced in it's just part of the risk of being a supplier and that's why we have a market in DGBB, people can compete and price all this stuff in (not yet obviously).

I get that this means that it's going to be harder to honor USD contracts with the current setup, but i think we should find another way, adding other currencies in the 1st tier contract between the network and the supplier is complexity as I see it.  Just thoughts though.

I think we'd be hard pressed to find a lawyer that will take Dash or even Bitcoin directly. The lawyers we've been using want to use Bitpay, which allows them to invoice us in USD. They keep their books in USD, not in Bitcoin, which is very common. We can't really toss away 99% of the possible contractors just because we want them to take market risk, which they're uncomfortable with. I would say it's very important for our growth, to allow us to work with as many contractors as possible.


Sure, I get that it's not a solution as it stands and that became obvious in the last few days with contracts not being honored unexpectedly.

But in that example the lawyer is the subcontractor and the contractor is the legal entity that submits the proposal to 'the network'.  I think whether that contractor is the foundation or a contributor doesn't matter, 'the network' is this as yet undefined and mysterious legal entity that is purchasing the goods/service from the legal entity who put their name on the proposal and is therefore the contractor.  

I say undefined because lots of us talked about before if for example we all got hit by a bus or shutdown in one country, the network is international and would just spring up again with a new team because it can physically pay people to do that without needing any single individual to manage that.  Whatever legal status one jurisdiction tries to apply isn't really going to work in my opinion as I mentioned.  Bitcoin is easy, there is a company running it and no way to replace them if they got shutdown without the whole thing crashing probably.  But Dash is more like Bittorrent - how do you shut it down or who do you sue? Cheesy

But yeah, what's happening right now is 'the network' is awarding contracts to individuals who then arrange something with another party a lot of whom realistically don't operate in Dash and want a FIAT currency, I totally understand that.  But the problems last few days are technical issues with the contracts that can be solved with tweaks in the system.

But the fluctuation problem hasn't really happened yet and on that side I think the contractors (party agreeing to supply the network by submission of the proposal and receipt of the funds) needs to take the risk and do the conversion themselves.  I don't know how we can do that because as it stands now that limits who will be prepared to take that liability / risk like you say and something needs to be improved but I don't think having 2 dynamic elements like DASH/USD in the pricing of the base contract (network <> contractor) would make it easier.

I don't know the solution, just more interested in the dynamics here because it's so untested and new legally, operationally, contractually, etc.

Whatever the solution, the system is really causing waves, Evan as usual you've created a monster and I don't think any of us know the full impact or things 'the network' can achieve now Cheesy Tongue