Dash uses a two-tier network of masternodes to enable features like instant transactions, private transactions, and decentralized governance. Masternodes require a collateral of 1000 Dash to participate. They facilitate features like InstantSend for near-instant confirmations and PrivateSend for concealing transaction histories. The masternode network also funds projects and oversees governance through a decentralized budget and voting system. Dash aims to further develop these capabilities and improve scalability with upgrades like Evolution scheduled for 2018.

1. Dash
Josh Chu

2. Problems
● The issues of bitcoin
○ DAO (Decentralized, Autonomous, Organization)
■ Decision making
■ Funding
○ Instant
○ Privacy

3. Idea
● Second tier network - Masternode network
P2P supernode network Dash masternode network

4. Masternode
● Prove Of Service (POS)
○ Governance and Treasury
■ DGBB (Decentralized Governance by Blockchain)
○ InstantSend
○ PrivateSend
○ (Evolution)
● Paid from the block reward
● How to be a masternode?
○ 1000 Dash

5. ● Normal block
○ 50% for miner
○ 50% for one masternode
■ Maintaining a list of total masternodes
■ The lucky paid masternode is randomly selected from the top 10% of the list
■ Moving the masternode to the back of the list
● Superblock (every 16,616 blocks, approximately 28.8 days)
○ All for the budget proposal winners
Block Reward
10%45%45%
treasurymasternodesminers

6. DGBB (Decentralized Governance by Blockchain)
● Budget system
○ Making decisions by the owners of masternodes
○ The owners of masternodes vote for or against proposals
○ The approved proposals (budgets) will be funded
● Three components
○ Proposals
○ Votes
○ Budgets

7. DGBB
Proposals
● A request to receive funds
● Can be submitted by anyone
● 5 dash
○ destroyed on submission
● Submitting on dash wallet
● Cannot be altered once submitted

9. DGBB
Votes
● Cast by masternode owners
● Can be changed at any time
● Counted every 16,616 blocks

11. DGBB
Budgets
● Proposals which receive enough votes
○ (yes votes - no votes) > (total number of masternodes / 10)
● Can be nullified
● Processed (paid) in order of “yes votes - no votes”
○ More popular budgets get payment priority
● Approximately 6650 dash (in 2017) are available for each budget cycle

12. InstantSend
● Compete with nearly instantaneous transaction systems for point-of-sale
situations while not relying on a centralized authority
● Widespread vendor acceptance of Dash and InstantSend could
revolutionize cryptocurrency by shortening the delay in confirmation of
transactions from as long as an hour (with Bitcoin) to as little as a few
seconds

13. InstantSend
Process
1. Authority nodes, 10 masternodes, are selected via election algorithm
2. Authority nodes authorize InstantSend transaction and form a consensus
3. Sender and receiver receive 5 confirmations

14. InstantSend
Election algorithm

15. InstantSend
Example

16. PrivateSend
● Decentralized mixer for creating an on-demand system of removing the
history from coins on the network
● Mix inputs with the inputs of two other people

17. PrivateSend
Process
1. Break your transaction inputs down into standard denominations
○ 0.01 Dash, 0.1 DASH, 1 DASH and 10 DASH
2. Sends requests to random masternodes
○ No identifiable information is sent to the masternodes, so they never know "who" you are
3. A mixing session begins when two other people send similar messages,
indicating that they wish to mix the same denomination
○ The masternode mixes up the inputs and instructs all three users' wallets to pay the
now-transformed input back to themselves. Your wallet pays that denomination directly
to itself, but in a different address (called a change address)
4. Repeat this process a number of times with each denomination to fully
obscure your funds
5. This mixing process happens in the background

19. Evolution
● DashDrive
○ A decentralized shared file system that lives on the second tier network
● DAPI
○ A decentralized API which allows third tier users to access the network securely
● DashPay Decentralized Wallets
○ These wallets are light clients connected to the network via DAPI and run on various
platforms
● Second Tier
○ The masternode network, which provides compensated infrastructure for the project
● Budgets
○ The second tier is given voting power to allocate funds for specific projects on the
network via the budget system

20. ● Governance
○ The second tier is given voting power to govern the currency and chart the course the
currency takes
● Quorum Chain
○ This feature introduces a permanent stable masternode list, which can be used to
calculate past and present quorums
● Social Wallet
○ We introduce a social wallet, which allows friends lists, grouping of users and shared
multisig accounts.

21. Bad masternodes
● Masternodes must ping the rest of the network
● Selecting 2 quorums
○ Quorums A: the closest nodes to the current block hash
○ Quorums B: furthest
● Quorums A checks the service of Quorums B each block
○ Masternode A1 (rank 1) checks Masternode B1 (rank 2300)
○ A2 (rank 2) B2 (rank 2299)
● Approximately 1% of the network will be checked each block
○ The entire network be checked about 6 times per day
● 6 violations to deactivate a masternode

22. Masternodes status
● 4500 masternodes at mid-2017
○ 41 countries
○ over 100 ISPs
● The block reward is approximately 3.6 Dash
● The selected masternode receives 1.8 Dash per payment
○ An average of 7 Dash per month
● The block reward decreases by 7.14% approximately once per year
● The annual return on investment (ROI): approximately 8.4%
○ Decrease over time

23. Schedule
● November 2017: 2MB block size increase
● June 2018: Evolution v1
○ DashPay
○ DAPI
○ DashDrive
○ DashCore v13.0 release

24. Reference
● Dash Official Website, https://www.dash.org/
● Dash Official Documentation, https://dashpay.atlassian.net/wiki/spaces/DOC/overview
● Dash school (video),
https://www.youtube.com/playlist?list=PLiFMZOlhgsYKKOUOVjQjESCXfR1cCYCod
● Dash Whitepaper, https://dashpay.atlassian.net/wiki/spaces/DOC/pages/5472261/Whitepaper
● Duffield, E., Schinzel, H., & Gutierrez, F. (2014, September 22). Transaction Locking and
Masternode Consensus: A Mechanism for Mitigating Double Spending Attacks. Retrieved from
https://dashpay.atlassian.net/wiki/download/attachments/75530298/Dash%20Whitepaper%20-
%20InstantTX.pdf?version=1&modificationDate=1474823226296&cacheVersion=1&api=v2
● How Dash 'InstantSend' Protects Merchants from Double Spends (video),
https://www.youtube.com/watch?v=HJx82On8jig
● How Dash's 'PrivateSend' Works Under the Hood (video),
https://www.youtube.com/watch?v=vgCId3wJc5Y