Dash Network Elected Trust Protectors: Closing the Governance Loop
Dash Core Group (“DCG”) announced in July 2017 the formation of The Dash DAO Irrevocable Trust, with the intent of ensuring the operations of Dash Core Group would be effectively controlled and governed by the Dash network. Work setting up the Trust was completed in late December of 2017 and publicly announced in January of 2018. The Dash network is the ultimate beneficiary of the Trust, and the Trust owns 100% of the shares of Dash Core Group Inc. With this setup, DCG took the first step to ensure that the Dash network would always have full control over the direction of the project, without resorting to the drastic and disruptive step of defunding DCG and developing an entirely new team to replicate its primary functions.
The ownership structure of DCG established a fiduciary duty to the Trust (and indirectly to the network itself). This enables the network to safely permit DCG to accumulate a significant balance sheet of assets for the benefit of the network, allowing it to become more resilient to future market downturns. It also enables the network to replace the leadership team of DCG instead of necessitating replacement of the entire organization should it determine DCG’s performance is unacceptable.
However, thus far, the network has not had direct power over Dash Core Group Inc., other than through the proposal decisions, because the six “Trust Protector” positions overseeing the Trust were initially populated with DCG team members. To complete the process of establishing the intent of the Trust, we are organizing elections for Trust Protectors, who will have the ability to oversee and replace DCG directors. The Trust Protectors will be a new tool in the hands of the network to shape the future of the project.
You can see more details on the legal structure here.
Who are the Trust Protectors?
The Trust Protectors are a group of six individuals that ensure that the Trust operates as intended. You can think of them as a board of directors of the trust. They direct the work of the Trustee, who runs the day to day operation of the Trust, and can replace him at any time. The Trust Protectors also supervise DCG’s board of directors and can initiate the removal of any of the directors if directed by the masternodes through a decision proposal.
Trust Protectors are elected by the masternode network annually. Currently, a subset of DCG’s board of directors act as protectors, since someone needed to be appointed to those positions upon formation of the Trust. Going forward, DCG personnel will be prohibited from running for a Trust Protector position. This will ensure an independent body of Trust Protectors.
The Trust Protector position is currently unpaid. If the newly elected protectors want to amend that policy, they will need to submit a proposal to the network to secure the necessary funding.
When will the elections happen and how will they work?
This announcement is the commencement of the election process (exactly 90 days prior to the elections as mandated by the Trust documents). The elections themselves will conclude on March 31st 2019.
Before the end of January, we will provide the contact details of a third party firm that will vet the candidates. We are currently in the process of selecting a firm and plan to conclude our selection shortly. Anyone interested in running for a Trust Protector position will need to contact this firm during the month of February to verify their eligibility. The designated firm will check that the interested pre-candidates fulfill all requirements (e.g., over the age of 18 and of mental capacity, no prior felonies, etc.) and will publish a list of vetted candidates on March 1st 2019. The full set of requirements will be published by February 1st.
The masternodes will be able to vote for up to six candidates from the eligible list during the month of March 2019. The Trust will use a custom process to collect and tally votes since the treasury voting process is ill-suited for this particular task. Masternode owners will not be required to identify themselves to participate in the process, but will need to sign messages using their masternode private keys to verify their ownership status. More details will follow soon.
On March 31st 2019 our third-party auditor will evaluate the deterministic masternodes list at that time. Only votes submitted from the masternodes on the deterministic masternode list at that time will count. Votes submitted earlier in the month from masternodes that are no longer active will be deemed ineligible and will be discarded. The six candidates with the most votes will be appointed protectors once they fulfill the KYC requirements administered by the Trustee. If any candidate fails to provide the needed documentation, they will be replaced by the next most voted candidate.
We have designed an election process as simple as possible reduce the possibility of surprises. If any unforeseen circumstances should arise and require any type of intervention to ensure a fair and equitable vote as intended, the current Trust Protectors will address those issues with the best interest of the network in mind.
We are all very excited to complete the transition to this innovative trust structure. We hope independent Trust Protectors provide a valuable new option for oversight of DCG while representing the interests of the masternodes beyond what can be provided by the proposal system alone. We look forward to sharing additional details over the coming weeks and ensuring a smooth transition.