We know DACs can generate and distribute profits... but how does a DAC manage operating expenses?
Currently BTSX is able to effectively manage OPEX for security via the delegate pay rates, but how can funds be raised/allocated for marketing, maintenance, development etc?
There is an important thread on this subject (https://bitsharestalk.org/index.php?topic=9603.0
where folks are struggling with the use of dilution/inflation/debasement to fund a marketing campaign.
Issuing new shares to raise capital, or printing money to stimulate an economy, are common practices in centralized systems that work reasonably well (corporate share issues) to horribly (fiat debasement).
Dilution/inflation/debasement schemes end badly more often than not (ie. current global economy, denarius through USD) and have a disturbing tendency to funnel value from the many to the few.
A decentralized system has no need to dilute/inflate/debase nor should such schemes be permitted under any pretense.
BTSX Revenue = Transaction fees etc.
BTSX Expenses = Security via delegate pay
BTSX Profit = Revenue - Expenses = Burn
It is not a reasonable/sustainable to assume the only OPEX will be paying delegates to provide network security.
Suppose (ha!) a new class of delegates, Super Delegates, are created to manage these other operating expenses - marketing, development, legal, etc:
- One superdel position is created for each operating expense, ie. Brian would be the Marketing SD, Dan would be the Development SD, [a lawyer] would be the Legal SD etc.
- The superdel is responsible for administering fund allocations to further the interests of the DAC in the most effective and efficient manner possible.
- If the superdel is not effective, he/she is voted out and a new superdel voted in.
- A short grace period (term) would be required to allow Superdels some time to implement their platform, say three or six months. Thereafter any Superdel candidate with a higher percentage of votes can replace the current Superdel. Upon being appointed the new Superdel then has the grace period, etc.
- Superdel fund allocations that are not used by the end of the year are burned, ie. unused value is returned to shareholders.
Now... how are the pay rates/allocations set and adjusted?
Each Superdel pay rate/allocation is determined in exactly the same way as delegates are elected, by shareholder vote:
- The entire burn is available for OPEX, ie. security and Superdels
- Whatever is left over after security is paid is eligible for Superdel allocation
- Whatever is not allocated to Superdels is burned
A quick/simple example of how this mechanism would operate:
Currently marketing is a high priority; shareholders vote Brian in as the Marketing Superdel and allocate 100% of the burn to Marketing.
Over the next three months Brian rolls out marketing campaigns that flop.
Meanwhile MeTHoDx has been killing it on the message boards and has all kinds of good ideas backed by the community. Brian's grace period expires and the community votes in MeTHoDx as the Marketing Superdel. He goes to town and market cap skyrockets.
BTSX hits a $1T cap and plateaus; all demographics have achieved critical mass and marketing campaigns no longer meaningfully impact market cap.
Shareholders vote to reduce the Market Superdel allocation and thereby increase the burn. Market cap starts ticking up because of the increased ROI to shareholders.
Shortly thereafter Big Gov/Bank collude to introduce legislation aimed at dismantling decentralized finance platforms.
Shareholders vote to allocate 100% of the burn to the Legal Superdel. The legal Superdel receives the fiat equivalent of millions of USD in funding and is able to retain a high profile legal team who successfully challenge the proposed legislation.
Once the AGS funds are spent the training wheels come off - a mechanism such as this is the only way to ensure DACs don't crash once Daddy lets go.
Such a system will make DACs truly sustainable by giving the DAC the means to grow, adapt and evolve.
For consideration and review.