Dash (DASH) Token Report

Dash (DASH) Token Report (PDF)

Dash (DASH) Model (XLS)

Dash is one of the oldest and largest deployed protocols within the cryptocurrency ecosystem. It was originally created to address the lack of anonymity within the Bitcoin network and its PrivateSend application is one of its most popular features. The protocol also features nearly instantaneous transactions with its InstantSend features. These two features, along with traditional transactions, make Dash unique with the digital asset ecosystem.
Both InstantSend and PrivateSend are enabled by masternodes, essentially centralized servers within the Dash network, a structure pioneered by the protocol and now embraced by other cryptocurrencies. Unfortunately, Dash’s privacy features are not as robust as other privacy preserving currencies, like Monero or Zcash. PrivateSend is a form of transaction mixing, one of the oldest privacy preserving techniques, and falls short when compared to more modern techniques. InstantSend, a form of transaction locking, is an interesting feature, but one the relies on masternodes and therefore gives up a degree of decentralization.

Those new to cryptocurrencies probably are unaware of Dash controversial origins. Originally launched in early 2014 as a fork of Litecoin under the name “XCoin”, a large number of tokens, approximately 24% of the current supply base ($1.4B at today’s price), was mined in the first 24 hours in what is now called “the Instamine.” Our analysis shows erratic block creation, high variability in block rewards, blocks that are either timestamped incorrectly or clearly out of order, and network difficulty that did not adjust properly. Although there was talk of relaunching the network under more fair conditions, a relaunch never occurred. “XCoin” went on to rebrand as “Darkcoin” and then finally “Dash”, short for “digital cash.”

One of the things we think that Dash got right was their focus on community building. Digital assets are networks that gain strength and value by universal acceptance. So regardless of our opinions on the technical implementation, Dash can overcome these limitations through broad community recognition. 10% of all block rewards goes towards the Dash decentralized governance budget, which gets paid out to projects, that can include community building, that are voted on by the Dash community. Therefore, it is quite common to see Dash sponsorships and advertisements in various cryptocurrency events.

Our economic measurements show a fairly vibrant network, one that is close in size to Litecoin and Bitcoin Cash. Fees are relatively low and transaction throughput is well below its theoretical maximum. PrivateSend represents a large number of transactions within the network, but a low overall value in terms of US dollars. Our valuation work shows a network that is fairly to slightly overvalued based on our top down and bottom up projections but one that is slightly undervalued when looking at ratio analysis, like the Network Value to Transaction Value (NVT) ratio.