I wanted to provide some background on ZCG compensation and clarify the rationale for the current proposal. I’m sharing this information for context and not to persuade community members to support an increase in compensation for ZCG members.
The Major Grants Review Committee (MGRC) was established under ZIP 1014, which designated the Zcash Foundation (ZF) as responsible for administering its funds. In August 2020, ZF outlined its obligations to MGRC, including providing administrative support for logistical tasks, payment processing, and record keeping. At that time, it was also decided that ZF would provide committee members a stipend for their work, set at $500 per month per member, based on an assumed time commitment of 5 hours a month and a rate of $100 per hour. The rate was based on the “fair-market value of a non-technical executive at a non-profit with a yearly budget of $5 million a year."
Toward the end of the program’s first year, the inaugural ZOMG committee expressed concerns about the level of support provided by ZF. While I won’t delve into the specifics, you can read more about the discussions here and here. One key concern was that committee members were dedicating more than the originally estimated 5 hours per month to overseeing the program. As a result, they advocated for adjusting the expected time commitment and increasing the corresponding stipend. The program was temporarily paused for four months while ZF and the community worked to refine it. When the program resumed in January 2022, ZF updated the stipend, increasing the time commitment to 15 hours per month at the same rate of $100 per hour, for a total of $1,500 per month.
In 2022, a new committee took over and renamed the program Zcash Community Grants (ZCG). The issues between ZF and the committee were resolved, and we had a strong working relationship. ZCG committee members remained mindful of the concerns about time commitment and informally tracked their hours. Toward the end of the year, the committee submitted a request to the ZF Board to increase the time commitment to 30 hours per month and total compensation to $3,000 per month. This request was based on the average time spent reviewing grants, overseeing the program, and the additional effort required to enhance marketing and outreach to the developer community for higher-quality grant applications. The Board rejected the request; however, they approved a compensation adjustment for the 2023 committee to $1,725 per month to account for inflation.
At the end of 2023, the Zcash Foundation announced that, due to market conditions, it would need to cut costs and would no longer provide stipends to the ZCG committee starting in 2024. In response, ZCG proposed amending ZIP 1014 to allow committee members to receive $1,725 per month directly from the Major Grants Slice of the Dev Fund. Given the market conditions, ZCG members decided not to request an increase in their stipend. The proposed amendment was approved with overwhelming support from the community.
The rationale behind ZCG’s current proposal of $1,725 + 10 ZEC is twofold: First, based on the current price of ZEC, ZCG believes it fairly compensates committee members for the average hours they commit each month. Second, it ties incremental compensation to the price of ZEC, meaning if the price decreases, so does the additional compensation. Conversely, if the price increases, ZCG anticipates that the workload will also increase, as higher prices tend to attract more investors, community members, developers, and ultimately grant proposals. Higher prices also mean ZCG has additional funds to allocate toward grants. Some have raised the legitimate concern that if the price of ZEC were to rise significantly, committee compensation could become excessive. In response to this concern, it’s worth noting that elections are held every six months, which provides the opportunity to reassess compensation and adjust as needed.
I hope this background and the clarifications about the current proposal are helpful information. Please let us know if you have any additional questions or concerns.
Thank you.