2025 ZCG Compensation

Governance
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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.

5 Likes
22

So the committee members received a 15% pay increase for 2023 and would now like a 27% pay increase for 2025 (at current price of ~$47 per coin).

These are high percentages, my preference would be annual cost of living increases maybe benchmarked to global inflation (which would typically be in the 3% to 8% range).

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Here’s another option: ZCG gets some additional ZEC, but it’s locked up and paid out after X years. This way the value of what they actually get after X years depends (at least roughly) on how well they performed at driving Zcash adoption.

In general I think ZCG is underpaid. As a thought experiment, imagine you had $6M+ of your own money, but you couldn’t spend it yourself, and you needed to hire 5 people to decide how to spend it for you. Would you want to pay them as little as is reasonable, so that the most amount of money possible remains available to be spent, or would you want to pay them a lot, so that you can hire the best possible people to make the best possible spending decisions? What’s the right trade-off?

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24

Just tor clarification, I got that number based off of what an approximate 10 ZEC pay increase would be when ZEC was a $55. I’m not advocating for this amount for a ZCG raise , Iwas simply doing a calculation.

And with today’s price volatility that amount is now down to around $2,205.

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This is similar to bonus payments, you only receive if performance met the marks. Since its only part of the equation, I kind of like the idea. (details could change)

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I frankly don’t think the performance of the ZCG even warrants the current pay. I think the ZCG has had the least impact of the three dev fund recipients even though they have gotten the biggest share of the dev fund. There was the Zcash media grant, the debacle where they initially approved a big grant for QEDIT to develop surveillance tools, and multiple other decisions that I don’t agree with. I don’t buy the argument that this pay rise will meaningfully increase the quality of ZCG members because the main limiting factor on candidate quality is the small size of the Zcash community. If the FPF would commit to actively trying to recruit people outside the Zcash community so we can significantly expand the candidate pool I would be open to increasing the pay, but until then I will vote against a pay rise.

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Yeah, higher pay + a greater effort to attract candidates makes a lot of sense. I agree with you that just increasing pay probably won’t automatically attract amazing people without some kind of active effort to seek out those people.

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28

What if sometime next year 1 ZEC is worth $1,000?

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I think that is part of the built-in incentive. Everyone wins

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30

The previous 15% raise was agreed to on the basis of inflation, but the correction for predicted hours vs actual hours was denied.

My interpretation of the current discussion is not primarily about another inflation raise, but asking again to “match compensation to actual hours”.

31

What are the ZCG’s key performance indicators (KPIs)? Perhaps an increasing market price of ZEC, and growing the estimated count of global Zcash users?

It could be interesting to consider a bonus incentive structure determined by how KPIs improved during a member’s term.

Or send a portion each of member’s compensation into a trust/lockbox that cannot be withdrawn for X years to naturally incentivize long-term planning, decrease sell pressure.

I’m supportive of a modest increase in compensation, at minimum to something inflation-adjusted to the date of the decision. (“$2,000/month inflation-adjusted 2024 U.S. dollars paid in ZEC at the 24 hour average market rate at time of each paycheck as determined by Coinmarketcap” perhaps)

Another incentivizing idea would be to derive it based on ZEC’s market cap. Perhaps the ZEC market cap divided by 500,000, with a floor compensation of $2,000/month.

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I thank you all for your diverse opinions on this matter. I believe that the amount of 20 ZEC is a good reward as mentioned above. At the same time, it can potentially increase the price of the token, as regular participants will not want to ‘drain’ the coin for free)

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The results are in.

The community has approved an increased stipend of $1,725 USD per month plus 10 ZEC per month.

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