DASH (DASH), or Digital Cash, is a cryptocurrency with optional privacy features and a form of decentralized autonomous organization. The coin is down 95% from the all-time high established in December 2017. The market cap ranks 15th on the BraveNewCoin market cap table and currently stands at US$734.98 million, with US$179.74 million in trade volume over the past 24 hours.
The project is a Bitcoin fork created by Phoenix, Arizona based programmer Evan Duffield in January 2014, originally known as XCoin. The project was rebranded to DarkCoin and then renamed DASH in 2015. Ryan Taylor is the current DASH Core CEO with Duffield acting as strategic advisor.
DASH uses a two-tiered PoW (PoW) and Proof of Stake (PoS) consensus model. PoW mining verifies the ledger using a two and a half minute block time. PoS occurs through Master Nodes and serves higher functioning tasks including governance and unique sending features. The block rewards are currently split between three entities; 45% to PoW miners, 45% to the Mater Nodes, and 10% to the DASH treasury.
Around ~18,000,000 DASH will be mined, with block rewards decreasing by 7% per year until no rewards exist. Inflation is currently 7.8% per year. Upon release in 2014, two million of the 18 million coins to ever exist were mined on the first day, which some have referred to as an ‘instamine.’ However, only 15% of the total circulating supply is currently held by top 100 accounts, a metric that is lower than Bitcoin, where 16% of the total circulating supply is currently held by top 100 accounts.
On the network side, hashrate and difficulty have fluctuated wildly over the past three months after falling rapidly from record highs. DASH uses the X11 hashing algorithm, which was developed by Duffield, and is comprised of the following hash functions: BLAKE, BLUE MIDNIGHT WISH (BMW), Grøstl, JH, Keccak, Skein, Luffa, CubeHash, SHAvite-3, SIMD, and ECHO. The X11 algorithm cycles through each of the 11 algorithms, in order, during the hashing process.
DASH can be mined by several Application-Specific Integrated Circuits (ASICs) currently on the market, including the Bitmain Antminer D3. Several X11 ASICs were released in late 2018, most of which are not profitable at an electricity cost of US$0.06 per kilowatt-hour (c/kWh). FusionSilicon is slated to release an X11 ASIC in March. Overall, mining profitability is currently sitting near an all-time low.
Each DASH Master Node requires 1,000 DASH, currently valued at US$83,480, which acts as collateral during governance functions in order to prevent Sybil attacks or "ballot stuffing." Despite the hefty price tag, Master Nodes have continued to increase at a steady rate since 2015. There are currently 4,838, meaning that 56% of the DASH circulating supply is currently held as collateral. The Master Node share of the block reward is split between all the nodes, meaning that as Master Nodes increase, payouts per node decrease. Master Nodes currently earn ~6.84% per year, but are also subject to DASH price volatility.
Master Nodes can send transactions using InstantSend or PrivateSend. InsantSend enables a type of off-chain 0-confirmation transaction which bypasses miners entirely. This is done through a transaction locking command with a wallet or client showing an intention to lock funds from a specific input to a specific output.
PrivateSend is essentially a coin mixing service, similar to CoinJoin, which combines identical inputs from multiple users into a single transaction with several outputs. For this reason, DASH is often labeled as a ‘privacy coin,’ along with Monero (XMR) and ZCash (ZEC). Although PrivateSend and mixed transactions (charts below) represent a low percentage of overall total transactions, these functions have been steadily increasing since 2015. The total number of private transactions on DASH are far fewer than that of XMR or ZEC.
The MN governance model also enables a decentralized voting mechanism for DASH related projects, paid for through the treasury block reward. These DASH related projects, and their related budgets, are voted on by Master Nodes. Each project, if it passes, is added to the total budget and the person or entity doing the work is paid. While the mechanism has resulted in various projects being funded by the network, a substantial amount of proposals over the past few months focused on marketing and promotion in South America.
Largely in part due to Duffield’s Arizona connection, DASH has also funded or partnered with many Arizona based initiatives. In August 2017, the treasury set aside US$50,000 for Blockchain Research Laboratory (BRL) funding, and in November 2017, DASH and Arizona State University (ASU) opened a BRL at the university. In January 2018, DASH unveiled a US$300,000 initiative with ASU to accelerate research, development, and education in the blockchain field.
The total transactions per day on the network (line, chart below) have been cycling from 8,000-14,000, excluding a stress test performed in November when transactions spiked heavily and more than 3.5 million transactions were sent in one 24 hour period. The average transaction value per day (fill, chart below) peaked late in 2017, and has continued to steadily decline. The average transaction value is currently just over US$1,000. Average transaction fees are currently sitting near pre-September 2015 levels, at US$0.014 (not shown).
The 30-day Kalichkin network value to estimated on-chain daily transactions (NVT) ratio (line, chart below) has oscillated between 20 and 70 throughout 2018 and early 2019. An NVT held below 20 should signify bullish market conditions. Inflection points in NVT can be leading indicators of a reversal in asset value. A clear uptrend in NVT suggests a coin is overvalued based on its economic activity and utility, which should be seen as a bearish price indicator, whereas a downtrend in NVT suggests the opposite.
Active and unique addresses are important to consider when determining the fundamental value of the network using Metcalfe’s law. Daily active addresses (fill, chart below) are pushing all-time highs, even after several stress tests on the network. Active addresses have continued to steadily increase year over year. Furthermore, there are over 9,575 members in nineteen DASH groups on meetup.com and over 23,000 subscribers on Reddit’s /r/dashpay.
Turning to developer activity, over 155 developers have contributed a cumulative 1,024 commits to the DASH repos in the past year. Most of these commits have been in the DASH Documentation and the DASH website repo. The DASH protocol repo (shown below) has had 550 commits in the past year with Dash Core v0.13.1 released earlier this month. Dash Improvement Proposal three, which restructures the way masternodes operate, was also locked in by the network this week.
Most coins use the developer community of GitHub where files are saved in folders called "repositories," or "repos," and changes to these files are recorded with "commits," which save a record of what changes were made, when, and by who. Although commits represent quantity and not necessarily quality, a higher number of commits can signify higher dev activity and interest.
DASH exchange traded volume is dominated by Bitcoin (BTC), with substantial volumes also coming from Tether (USDT), Ethereum (ETH), and the US Dollar (USD). The majority of trading has occurred on p2pb2b and Chaoex. Custodial solutions for DASH include both Trezor and Ledger hardware wallets, as well as Abra, Electrum, and Jaxx mobile wallets. On the UpHold wallet service, DASH was the most popular cryptocurrency from January 2018 & January 2019. This week, the spend.com app also announced support for Dash on the Spend Visa card. At the institutional level, BitGo has DASH support, with Coinbase potentially adding DASH for custody purposes in the near future.
The bear market of 2018 hit DASH particularly hard, retracing all gains made after March 2017. As price forms a potential bottom for trend reversal exponential moving averages (EMAs), volume profile of the visible range (VPVR), the Ichimoku Cloud, and chart patterns can be used. Further background information on the technical analysis discussed below can be found here.
On the daily chart, the 50/200EMA has been bearishly crossed since March 20th 2018, with no candle closes above the 200EMA since this ‘Death Cross.’ The 200EMA will eventually act as a mean reversion target, currently at US$140. Price has also been bound by a tight downward channel, which has been almost a mirror opposite of the upward channel that brought DASH to record highs in December 2017. VPVR (horizontal bars, chart below) suggests price is above the block of volume around US$73 with significant resistance at the psychological level of US$100. There are currently no active, high timeframe, bullish divergences.
Turning to the Ichimoku Cloud, four metrics are used to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.
The Cloud metrics on the daily time frame with doubled settings (20/60/120/30) are bearish; price is in Cloud, Cloud is bearish, TK cross is bearish, and Lagging Span is below Cloud and above price. A traditional long entry will not trigger until price is above the Cloud. However, if price remains in Cloud with a bullish TK cross, price will likely move toward the opposite end of the Cloud at US$117. This is known as an Edge to Edge trade.
The Cloud metrics on the twelve-hour time frame with doubled settings (20/60/120/30) are more bullish; price is above Cloud, Cloud is bearish, TK cross is bullish, and Lagging Span is above Cloud and above price. A bullish Kumo twist will likely occur within the next few days, triggering a long entry. This will be the first time since Cloud metrics on this timeframe are 100% bullish since late 2017.
Price has also formed an Adam & Eve (A&E) double bottom. The hallmarks of the A&E pattern include a descending volume profile but with V and U-shaped price action which increased in volume once resistance is broken. The 1.618 fib and measured move for the pattern yield targets of US$117 and US$136 respectively.
For the DASH/BTC pair, trend reversal indications are similar to the DASH/USD pair after price remained above previous multi-year horizontal resistance. On the daily chart, price will likely move above the Cloud and toward the 200EMA at 0.025BTC over the next few weeks. This will be the first indication of bullish strength since early 2018. If a sustained bull run does occur, price will likely remain oscillating between 0.05 BTC and 0.1 BTC for the indefinite future.
Fundamentals suggest a network with low transaction volume and minimal use of the optional privacy features. However, daily active addresses continue to increase, reaching record highs, with active development initiatives coming over the course of this year, including a restructure of Mater Nodes which improve usability. Unlike other coins from the class of 2014, which have largely fallen by the wayside, DASH has likely survived due to both the Master Node and treasury component. Mater Nodes also discourage a vast majority of the circulating supply to ever see the open market, and the treasury has continued to fund DASH related development and marketing to sustain the coin over the past four plus years.
Technicals show a potential end to the strong bear trend throughout 2018, as is the case for most cryptographic assets. The litmus tests for a trend reversal include price position relative to both the 200EMA and the Cloud on the daily timeframe. Signs of bullish reversal includes Cloud Edge to Edge trade and Adam and Eve double bottom setups. Overall, price will likely trend upward throughout most of 2019.