The initiative signals the roll out of its Dash-to-gold strategy to restore balance before being implemented by blockchain startups. The plan intends to boost the value of the capital possessed by the DIF.
Demelza Hays, an alumna of Forbes 30 under 30 and DIF’s investment consultant, formulated the rebalancing strategy.
The objective is to amass as much Dash and gold as possible via rebalancing the two unrelated assets.
“The main idea is to sell Dash for Gold when Dash breaches 50% of the portfolio and to sell Gold for Dash when Dash falls below 10% of the portfolio. This ensures a countercyclical trading strategy that sells assets high and buys assets low.”
The successful completion of initial purchase, from an original tranche of six, signals the start of a long-term pro-actively administered rebalancing strategy utilizing purchase and sale initiatives.
Nevertheless, the Foundation only uses funds for the rebalancing strategy and not for anything else. If not for the rebalancing strategy, the funds would be lying idle.
The DIF sets aside 10% of the Dash block rewards via the network’s self-administering treasury system, with a directive to generate funds.
It has an additional directive to back the Dash network, so these funds are disbursed to blockchain startups by the way of loans or investments.
Any venture can request funding and go through a two-step procedure before a final decision is taken by masternodes.
The rebalancing plan is purported to guarantee the growth of funds which have been set aside for investment.
Nevertheless, the earnings received from the strategy or investment will be used for the advancement of the network as Hays detailed below:
“Any money made on our investments can be used to buy Dash off of the open market, which we then burn. Burning Dash reduces the supply, and theoretically should increase the price of the Dash. This is one way the Foundation can give back to the community without having an ultimate beneficial owner.”
During an investor call, Dash revealed that it had come across commercial payments twice that on the network with the assistance of fresh retail collaboration in Latin America.
During the first-quarter, it recorded a 60% appreciation in price, reflecting the best quarterly performance since 4Q17.