Dash Investment Foundation (DIF), which claims to be the world’s first non-proprietary, memberless investment fund, recently purchased its first physical gold shipment.
This move, announced on June 12, marks the launch of its Dash Rebalancing Strategy (DASH) for gold before being implemented in blockchain startups. The strategy aims to increase the value of the capital held by DIF.
Dash’s rebalancing strategy for gold
The rebalancing strategy was developed by Demelza Hays, a DIF investment consultant and former Forbes 30 under 30 participant. The goal is to accumulate more Dash and more gold by rebalancing the two uncorrelated assets.
„The main idea is to sell Dash for gold when Dash exceeds 50% of the bag; and to sell gold for Dash when Dash falls below 10% of the bag. This ensures a counter-cyclical trading strategy that sells assets up and buys assets down.
The completion of this first purchase order, from an initial figure of six, marks the beginning of a long-term, actively managed rebalancing strategy using the purchase and sale triggers.
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Money to burn
However, the fund only invests capital in the rebalancing strategy when it would otherwise be inactive. DIF allocates 10% of the Dash block rewards through the network’s autonomous treasury system, with a mandate to earn money.
It has an additional mandate to support the Dash network, so these funds are distributed to blockchain startups in the form of loans or investments. Any project can apply for funding, which goes through a two-step process before being submitted to a final decision by the masternodes.
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While capital awaits its implementation, the rebalancing strategy should ensure that it continues to grow. But the benefits of the strategy or the investment depend on the network, as Hays explained to Cointelegraph:
„Any money obtained from our investments can be used to buy Dash on the open market, which we then burn. Burning Dash reduces the supply and, in theory, should increase the price of Dash. This is one way the fund can give back to the community without having a beneficial end owner.
In a recent call to investors, Bitcoin Evolution announced that it had more than doubled its trade payments with the help of new retail partnerships in Latin America. It also confirmed a price increase in the first quarter of 2020 of almost 60%, its best quarterly performance since the fourth quarter of 2017.