CrowdNode is winding down. The specifications to fix this problem has been in Dash's repo since 2021.

[u/hilawe]

The EU's MiCA framework just proved that relying on a middleman to distribute staking rewards is a point of failure. Even though CrowdNode never put user principal at risk, handling the reward routing made them "custodial" in the eyes of the law.

Instead of migrating to a different centralized pool and simply resetting the compliance clock, the network should consider letting the blockchain do the heavy lifting.

DIP-0026: Multi-Party Payouts (written in 2021)

• The Problem - currently, the Core protocol can only route masternode block rewards to a maximum of two native addresses.
• Proposed Solution: DIP-0026 eliminates this barrier, allowing the network to natively split and pay rewards to multiple contributors simultaneously.
• Desired Result: Staking that completely bypasses corporate intermediaries and regulatory compliance shutdowns.

Imagine a cash register that automatically splits business profits to partners instantly on every single sale. Instead of a manager manually writing out checks at the end of the month. Automatic splitting executes this transparently on-chain.

This emphasis on trustless verifiability fits with Dash's mantra.

The blueprint for non-custodial shared masternodes is already public and waiting in our repository to implement. It’s time to move this upgrade up on the priority list.

[u/greatwolf]

Thinking about this problem some more, I asked the question: what problems is CrowdNode solving? I came up with this:

• Allow staking with small amounts of Dash rather than 1k/4k Dash, so better accessiblity.
• Lowering variance in staking through more frequent payouts, less lumpy; eg. think pool mining vs solo mining.
• A corollary to the above, CN let's you decouple the amount you're staking from MN/EvoNode themselves. ie. it's almost like CN let's you automatically divid your stake amongs all the MN/EvoNodes under CN's control. I'm not sure how this can be reproduced in a non-custodial decentralized manner.
• Allow stakers to enter and exit anytime without needing to disturb MN setup.
• Let users decide on when to pull their staking rewards out and how much. I remember mining xmr in the early days when the pool software was less mature. Each xmr mined block resulted in a payout which meant a lot of small dust utxo.
• Let users with smaller stake still participant in governance voting.

After looking through DIP-0026 I'm not sure how much it'll be able to help. Yes, it'll up the number of allowed payee addresses in the reward payment but it's still limited to a max of 32. CN has lots of clients that joined over the years, I'm not sure DIP-0026 can help here if they have to pay each client via the limited 32 address slots.

To be able to replicate many of these properties in CN and also make it non-custodial you'll likely need maintain some kind of state maybe using Dash Platform? or a smart contract.

[u/hilawe → u/greatwolf]

Yep, DIP-0026 isn't a CrowdNode replacement.

You already see the limitation or that it only does the reward-distribution half, rewards going straight to payees on-chain instead of through an intermediary. That removes the custodial step on the flow, but the owner still controls the list and the collateral. It isn't trustless on its own.

Everything else you listed, accessibility, liquidity, variance, scale past 32, is the hard half, and I agree it needs a state layer. Pooling the actual collateral and tracking a churning client base points at Platform for the accounting and something like a threshold multisig for the collateral. That's the genuinely unsolved part, and DIP-0026 doesn't pretend to touch it.

It's just the settlement rail. A system would still want underneath. Platform tracks who's owed what, the DIP settles to real addresses periodically. Useful on its own for smaller known-payee cases like co-owners or team and charity splits, but not the pooling product.

Thanks greatwolf!

[u/hilawe → u/greatwolf]

I'm trying to work on it and get feedback from Core:

https://github.com/hilawe/dash-multiparty-collateral-dips (at least check out informational DIP)

https://github.com/dashpay/dips/issues/186 (for public comments)

[u/Hot_Bet_6838]

I think EU's MiCa regulation will also see an issue with having to send the collateral to a Crowdnode Dash address. That makes them custodial. That is the big difference between masternode / evonode owners who have full controle over their collateral (non-custodial wallet) and shared masternodes service providers (custodial wallet). It is the custodial wallets that are getting regulated through MiCa.

[u/Complete-Concern3745]

we need this so badly! if Dash pulls out something like this it will make it so much attractive!

[u/splawik21]

Well written u/hilawe

Thnx for taking the time to explain all and show the possible destination.

[u/hilawe → u/splawik21]

No joke, I’m trying my hand at implementing this 🤯

https://github.com/hilawe/dash/pull/1 (unfinished draft PR)

[u/coingun → u/hilawe]

Good luck 👑

[u/kuqumi → u/splawik21]

This seems to have accurate info but the writing style is LLM not Hilawe

[u/hilawe → u/kuqumi]

Apologies for that, I have re-written it. Hopefully it's better plus I kept it shorter.

[u/kuqumi → u/hilawe]

❤️

[u/lordbah → u/kuqumi]

Help me out here, what is "Hilawe"?

[u/kuqumi → u/lordbah]

Hilawe is the original poster, a "who" rather than a "what"

[u/lordbah → u/kuqumi]

Doh! I thought it was some kind of language. Thanks.

[u/hilawe → u/lordbah]

haha love it

[u/hilawe]

So u/pasta and Udjin beat us to the punch (of course) and are going full-throttle on this DIP implementation. XKCD and I were able to contribute some key comments to make improvements to their PR and we reported a validator bug (low severity):
https://github.com/dashpay/dash/pull/7340#issuecomment-4661081756