Due to a number of questions about the so called Dash "instamine issue", the purpose of this document is to provide an official statement from the Dash team about this matter. Our intention is to provide Dash investors and users with information to help them understand the currency history and technical issues at the beginning of the project and draw their own conclusions on the impact.
Facts about the instamine
- There was no pre-mine in Dash
- ~1.86MM first 24h, ~2.02MM first 48h according to https://chainz.cryptoid.info/dash/#@inflation
- That represents approximately 10-15% of the total money supply that will ever be issued
- This coin issue rate exceeded the published emission schedule by a wide margin
Dash started as an experimental project from a talented developer that was looking to see what he could do with a crypto-currency. There was no expectation that it will become what it is today. It has really grown organically. Adversaries of the project try to present the instamine launch issues in a negative light, the reality is different:
- XCoin as it was called at the time was based off of the Litecoin code base, which unbeknownst to the developers contained restrictions on the frequency and extent of adjustments which the network could apply to mining difficulty.
- Because of these restrictions, and the popularity of mining the coin, the network produced a large number of blocks with the maximum allowable coins in each block. These went to whoever was mining and not to the developers only. There were many people mining at the time who solved these blocks.
- Once the issue was recognized, the founder of the coin issued a fix within a few hours to adjust the difficulty more quickly than the algorithm included in the Litecoin code.
- Once the immediate issue was resolved, he proposed options to fix the initial distribution issue by airdropping new coins to address criticism and resolve the issue. The community disagreed with the proposal and voted it down with most arguing that the distribution was already acceptable by that time (April 2014) and that the airdrop would create more problems than it would solve.
- The only two members of the development team at the time were Evan Duffield and InternetApe. InternetApe sold all his coins early on, and is no longer involved with the project. All other members of the current team joined later. InternetApe was able to accumulate 160K DASH over the first weeks of the project so that should provide an idea of the range a founding member was able to accumulate. So the launch issues and high rewards happened to everyone equally and there was no bad intention, just part of a young hobby project that later became a much more serious project.
- These early mined tokens had no value at the time and many people just traded them OTC or sold them in exchanges very early on. There was no benchmark and no way to know Dash was going to grow and become a bigger project so most first day miners just sold their coins.
- Dash is now a three year old project that has already gone through three major rallies that helped with distribution and those first day miners and early investors had opportunities to exit and be compensated for their early support of the project all the way up to 17 USD/DASH. Coins have been redistributed and thanks to that early liquidity many people that are not miners were able to buy on exchanges and get involved. Three years later, Dash enjoys a very healthy distribution.
- Though the lead developer purchased additional holdings on the open market, he is not the largest holder of Dash. The largest investors have all bought their coins from exchanges. We are happy that Evan does hold a good amount of Dash so that he is motivated to continue working on the project as the development team has done over the last three years.
It was a difficult launch but the project has acquired value because of three years of development and hard work and this will continue into the future. Dash is earning its place with no VC funding or ICO. Growth has been organic as the community expands and the project delivers innovations. Based on the presented facts, investors and users are going to have to decide for themselves if they want to support the project and buy Dash having all necessary information about the project history.
- The birth of Darkcoin by Evan Duffield: https://dashtalk.org/threads/the-birth-of-darkcoin.162/
- Was Dash Instamined? From Legacy Dash FAQ: Legacy FAQ#WasDashInstamined?
- Was The Instamine A Positive Thing For Dash?: https://dashdot.io/alpha/?page_id=118
- Dash: Full interview with The Daily Decrypt at labitconf: https://youtu.be/rNZcO2vm7Jc?t=13m10s
- Dash distribution and price: https://bitinfocharts.com/darkcoin/visualization.html
- BCT threads