Alarm bells! 🚨 re ZOMG

Governance
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(Note: I am not speaking for ECC in this post! I haven’t had time to consult with the rest of ECC and align on a shared vision about these issues — none of them have reviewed anything below — and since these issues do not directly affect ECC, I’m going to just fire off these comments to keep the discussion going, but be aware that ECC itself may or may not support all of the following, especially if this somehow starts interacting more directly with ECC’s responsibilities. Also, a lot of the other ECC’ers might have very different opinions and ideas, and their ideas might be better than mine. :-))

Uh-oh! What’s going on!

This, combined with this:

… makes me think the Zcash community should seriously consider making some structural changes to make the ZOMG more attractive and more effective for the kind of busy and skilled people who we want, and should do so before authorizing the next ZOMG to start spending large amounts of the community’s money.

A good next step would be to gather information about what worked/what didn’t from the current ZOMG members, from the first year of grant applicants and recipients, and also solicit recommendations from people who would potentially be good candidates for a future ZOMG, if we can find such people.

Also (as I coincidentally happened to do just a couple of days ago) gather best practices from other organizations that have done this successfully.

If it doesn’t look like the second round of MGRC/ZOMG is set up to be successful (and to my eyes, it currently doesn’t), then the Zcash community should seriously consider putting it on hold while deciding how to improve the structure. It doesn’t make sense to throw all that money into it (8750 ZEC per month which is worth $1,312,500 per month at today’s prices!) when that ZEC could just be stored up in the MGRC/ZOMG Zcash address while we as the community institute a better structure, and then that improved structure would have that much more money.

I’ll be honest: I always thought the MGRC/ZOMG had structural problems that could lead to these kinds of outcomes. (What I’m writing here is largely consistent with what I wrote a year and a quarter ago before the first MGRC/ZOMG had even been elected. :slight_smile: )

In my humble opinion, for a ZOMG-type structure to be highly successful the people who do the work need to be well remunerated in order to compete with the other demands on their valuable time, their pay should be incentive-aligned with the ZEC holders (ie when the price of ZEC goes up they get paid more and when the price of ZEC goes down they get paid less), they need their own budget which they have sole control over and can use for whatever they think is best to serve their mandate (eg hiring people, running marketing campaigns like the Ethereum Foundation folks recommended, etc.), and when they step down they need to rotate out incrementally so that we preserve institutional memory and follow-through.

Having four out of five members step down at once means the institution basically has a “stroke” — loses much of its memory and people can’t rely on its behavior next year to be consistent with its behavior this year, or for it to follow through on things it started. On the other hand, if two rotated out this year, and then another two rotated out next year, that would be fine.

(Additionally, having four members step down at once is a red flag :rotating_light: which means something is wrong and the community should try to identify the real problems and not just accept the standard “Oh everything is fine but I want to spend more time with my family” line. :wink: )

My interpretation of what’s happening here is basically that the structure was flawed, but that the first year was moderately successful thanks to heroic efforts on the part of individuals, notably ML and Shawn. With most of the heroes quitting, that’s a really clear warning sign (:rotating_light:) in my eyes that we as the community should not double down on the same structure and hope to get lucky twice.

I also think this is a good opportunity for the Zcash community to “think outside the box”. What about setting up a new organization outside the USA? Or setting up a DAO on Ethereum? Or having the Zcash consensus rules donate money to The Gitcoin DAO?

Regardless of anything else, my personal strong opinion is that above all, any changes the the community makes to these structures should increase and not decrease Zcash’s decentralization. Zcash already has excellent resilience and openness due to the current degree of decentralization that it already has, but we can and should continue to improve that.

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It’s so sad to hear that ZOMG members are stepping down.

I love to hear from members who are stepping down. That will help pave better path for broader Zcash ecosystem.

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When @sarahjamielewis left us, her final words were “If you want trivial responsibilities, take on trivial projects.”

Return to a MAJOR Grants REVIEW committee, rather than a limited five person DAO paying people to make memes and running YouTube in India and most problems will fix themselves.

I read the original zip to be limited democratically elected member check on a portion of funding that the community could prevent zcash from becoming a developer mine. Still think that is a small effort to decentralize power in zcash is something Zcash desperately needs.

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So the members are bailing after funding expensive memes & we still don’t have a public dashboard/spreadsheet of the accounting? Nice…

In the past, I was a board member of an org that provided mammography equipment to impoverished communities where women were dying for lack of detection. The end goal was clearly very important.

During the course of my duties it became apparent the recordkeeping was murky at best which necessitating my leaving the position to protect against liability. People said I was overreacting & continued their loose practices. The government tax authority eventually also found their documentation to be murky.

Though the org survived the audit, the lack of transparency created by the board members tarnished the reputation of the org. Nobody wanted to be on the board & nobody wanted to be a donor. The real losers were the women who needed the equipment.

In our current situation with ZOMG, the real losers are the masses of people globally who need privacy & financial freedom. I’m afraid some people have taken their eye off the ball once again.

I used to wonder why charity boards were mostly comprised of older, retired people. Now I understand it takes a certain level of maturity & realistic assessment of time commitments to keep your eye on the ball.

I hope going forward, the duties of the board are realistically assessed & goals clearly outlined to truly move forward the progress of providing privacy & financial freedom, as well as public transparent records of finances & funded project progress.

In the case of ZOMG, the current abandonment of board seats hurts the overall sentiment of ZEC, not just the org or the individual members. Throwing more money at board seats is not the answer as that will only serve to attract more people attracted to large sums of money.

Sometimes it helps to start at the goal & work backwards to create a reasonable process, instead of starting with the self.

I hope everyone takes these cautions with themselves as votes are cast for the next board.
The end goals of ZEC are very important.

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I would be in favour of keeping the ZEC to give the community enough time to find a way to generate a place that at the same time reflects the value of the common treasure and the possibilities to write documents together that reflect e.g. certain innovations.

It would be very interesting to adapt the ZIP model. A wonderfully “simple” model to document open democratic processes and enable 100% voting.

I imagine that we can write open, living documents together that reflect a general consensus.
What do you think about creating a website that combines a private voting mechanism, a ZIP-based open innovations forum and the shared community treasure?

I am convinced that if we can find an effective way - to transparently document protected, open, democratic processes and combine them with effective sharing of common resources - we could become a model for many startups/DAOs.

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I 100% agree with the first part. Particularly if that means more supervision and guidance from MGRC. Our grant-funded project could have used a lot more of that. I would happily vote to increase their salary 10-fold if this means there is always someone available to discuss the status and ideas of potential and current grant-funded projecs.

As to the second part. I would be cautious there. Price of crypto is mostly decided by factors outside of MGRC control. A bear market is inevitable on long timescales, and that would mean going back to square one (MGRC not being paid enough and therefore not putting in as much of their time).

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This will sound a bit radical, but instead of giving ZEC away, what if we burned ZOMG money to increase scarcity and just let people build on their own?

This would also eliminate many of the problems and pressure many have already mentioned here.

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I don’t think crypto prices are that fluid, but I’m not an EMH believer. Doubt we would see any price increase, and that burning would be direct evidence of failure.

If drastic measures are being considered, I would support abandoning MGRC entirely and setting aside that slice for post halving post proof of stake transition for ECC/ ZF wind down, assuming that developer allocation is not renewed. (Although, I’m picking up from zooko that he would like ECC to continue forever)

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Burning the coins:

  1. Acknowledges that they were set aside for governance purposes
  2. Acknowledges that more government might not be what we all need
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If ZOMG implodes the funding will build a war chest for the next attempt - this isn’t something we give up on.

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I’m going to push back on the narrative being presented here, ie: that ZOMG has somehow not been transparent with what it’s doing or how it’s spending funds.

First of all we have detailed meeting minutes and a public website that not only detail what was spent where, but also detailed discussions about why the decisions were made.

Nobody has asked for a more detailed spreadsheet of what ZOMG is holding until the recent proposal for a ZOMG Dashboard two weeks ago. And even then the goal of the dashboard proposal wasn’t to display an accurate accounting from ZF, it was going to be a estimate of what ZOMG should be holding:

Whereas the solution I suggested was to make the majority of the internal spreadsheet public with actual numbers provided by ZF accounts (ZEC and USD holdings) so users can compare block estimates with actual holdings:

This would provide a third level of transparency that the community can reference in addition to the website and minutes. I still plan on bringing this idea up with ZOMG/ZF this Tuesdays meeting.

Until then every ZEC that ZOMG has granted is open for anyone to see on: https://grants.zfnd.org/

And rationale for the spending can been seen at: Community Grants Updates - Zcash Community Forum

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We are fortunate that the problem with ZOMG is due to dissatisfaction and lack of appropriate candidates rather than an attempt at take-over or sabotage. I think we have just uncovered an enormous liability. Rather than shutter the operation, perhaps some of the current members might agree to stay on an additional term to shadow-stagger new members, and with the sole intention to idiot- and sabotage-proof ZOMG for future generations: finalize dashboards, enable greater transparency, and develop some sort of protocol that could shift ZOMG into autopilot incapable of self-harm by intention or neglect. With specific goals, and a bit of legal aid, the time commitment could be largely reduced, and would be a great service to the community in these times of need to avert future times of crisis.

It’s wonderful, ideal to have star members at the top of their game or brilliant retirees with time to burn in between tee times guiding and inspiring Zcash, but often, likely, we will only find average folks–maybe even bad actors!-- to serve. This system should be resilient enough, bulletproof even, to accommodate their terms of service, and decentralized enough to allow, no matter who occupies those seats, the finest minds available on topic to weigh in on its decision and direction.

And I’m always for venturing outside of box.

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At present, the organizational structure of ZOMG is obviously weaker than ECC and ZF, but it has more funds.

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This is great. I’m glad you pushed back.

I’m sorry it took a formal grant proposal & a strongly worded public post to achieve a solid answer…I look forward to the modified-for-financial-privacy spreadsheet you previously mentioned, before everyone vacates the board seats.

I’m personally not worried about the grant in question. If the functions are being fulfilled that is the important thing.

That said, the amount of progress ZOMG achieved towards stated end goals for the money spent is shockingly low in my opinion. Hopefully future boards are able to make more prudent choices in expenditure.

I am worried about ZEC as a whole & the viability of ZOMG. I stand by my assessment that positions on a board of this type are best served by people at the stage of maturation in life where they understand they’ve accumulated “enough” & its’ time to give back…People who are at a stage of life where they understand their valuable time is not what can be extracted from a project based on hours of work, but rather how much their expertise & experience can give to the org & its stated end goals per hour of work. If people are too busy to meet the demands of the position perhaps they are not suited to the position at this time. This should be assessed honestly when considering future board positions.

It’s normal for people in the accumulation stages of life to underestimate the amount of effort necessary to achieve an organizations’ goals. Hopefully we have all learned from this & will put forth candidates for the next board who are willing & able to spend the time required to achieve meaningful progress.

I’m glad to have your answer & am sorry it took so much to attain it.

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ZIP 1014 is the end result of months of discussion, multiple rounds of voting on multiple proposals (ZIPs 1001 thru 1013), and discussions between ECC and the Zcash Foundation (ZF). During that process, the idea of a “third entity” was explicitly proposed, in a proposal from Mario Laul and Chris Burniske that was withdrawn following community feedback, and by James and Joseph Todaro, in ZIP 1006 (“Blocktown Development Fund Proposal: 10% to a 2-of-3 multisig with community involved Third Entity”), which was rejected by both the Community Advisory Panel (ZCAP) poll (by a margin of 34 votes to 9) and the Forum poll (with 60% voting “No” and 26% voting “Yes”).

There was also ZIP 1009 (“Dev Fund Strategic Council Approach”) from Avichal Garg,which proposed creating an independent, community-elected “Strategic Council” to decide how the Dev Fund should be allocated. This was also rejected by both ZCAP and the Forum poll.

Instead of voting to create a third, independent entity, the Zcash Community opted to allocate a portion of the Dev Fund (the Major Grants slice) to “fund independent teams entering the Zcash ecosystem, to perform major ongoing development (or other work) for the public good of the Zcash ecosystem”. The ZCAP expressed no clear preference as to whether the Zcash Foundation should have independent authority in determining Major Grants, or whether there should be a new Major Grant Review Committee elected by the Zcash Community (both options received 34 votes). The Zcash Foundation opted to advocate for an independent, elected Major Grant Review Committee (since rebranded ZOMG).

The Major Grants Review Committee was specifically not established to be an independent entity, but a grant review committee tasked with allocating funds to independent teams, whose decisions would be independent of both the Foundation and ECC.

@zooko - I appreciate that you were disappointed that ZIP 1014 did not create a third entity to sit alongside ZF and ECC. However, ZIP 1014 represents the clear consensus of the Zcash community and, as I’ve described in the thread that Chris started, the Foundation is taking clear steps to address the issues he and other members of the ZOMG Committee have raised.

While the burden to address those issues lies clearly with the Foundation, I believe that ECC can also help make ZOMG a success. I’ll give two examples of how I think ECC can help.

Several months ago, following a discussion with ZOMG about how to go about inviting RFPs for security audits of software produced by grant recipients, I approached ECC to request introductions to suitable potential auditors. To be clear, this isn’t a request that ECC conduct audits, merely a request to make introductions to auditors who may be interested in responding to RFPs. Having commissioned multiple audits of zcashd, ECC has more and better relationships with auditors than the Foundation has, and this seemed like a fairly innocuous and trivial request.

I’ve also suggested several times that Alex and I meet with the ECC leadership team to discuss how we can cooperate, for example by working together from an engineering point of view, working to identify and remove obstacles to new teams entering the Zcash ecosystem, and exploring ways to better support ZOMG’s work (e.g. by providing technical expertise and advice on how to assess grant applications and milestones).

I was very serious when I said, as I departed ECC, that I wanted to see relations between ECC and the Foundation improve. I believe that the chances of Zcash achieving its full potential are far better if we - the Foundation, ECC, and ZOMG - work together constructively, and I believe we can do so both without compromising our independence, and while staying true to the vision that the Zcash Community laid out in ZIP 1014.

@zooko - I’m now asking you, as CEO of the Electric Coin Company, will you and ECC work with me, the Zcash Foundation and ZOMG, to make ZOMG a success, or are you determined to continue pushing for changes to ZIP 1014?

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Under the terms of the current agreement, which entity has the responsibility of project management once a grant is given?

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Sounds to me like ZOMG needs a complete reset. New name, new goals, new people, etc.

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Dodger, I’m sorry to hear this — it sounds like you are feeling unsupported by me or by ECC. We can definitely get to the bottom of the two specific requests you mentioned below.

I was confused at first about why this thread about the future of ZOMG was perceived as having something to do with cooperation between ECC and Zfnd. Now I have a guess. I think there’s a recurring confusion in these discussions with different people talking about two different things:

  1. What should Zfnd do under ZIP 1014?

  2. Should the community amend or replace ZIP 1014?

(I perceive a similar pattern in this thread:

)

In my post above, I was talking solely about the second topic — should the community amend or replace ZIP 1014! I try not to give others — including the Zcash Foundation — unsolicited advice about how to take care of their own business, and I support the Zcash Foundation, whom I know to be high-integrity people and whom I believe to be doing their best, starting with you, Dodger.

So please don’t interpret anything I’ve said as critical of Zfnd or as asking Zfnd to behave differently. I was talking to the Zcash community as a whole about the option of changing ZIP 1014. While ZIP 1014 constrains ECC, Zfnd, and ZOMG, it does not constrain the Zcash community! They (we, the community as a whole) can make changes to better serve the mission. And in my humble opinion, now, with a year’s worth of experience under our belts, is a great time to use what we’ve learned to make improvements.

So, to respond to your specific question:

I think it is a mistake to think that those are two alternative options. My intention is to do both!

  1. Support Zfnd in all of their work, including their responsibility to administrate ZIP 1014, implement Zebra, and everything else that they are trying to do inasmuch as ECC can help.

  2. Encourage the Zcash community to “think outside the box”, to consider making amendments to ZIP 1014 or to replace it entirely, inasmuch as I can help with that from my role of CEO of ECC.

Note that in both cases, ECC has a very limited role to play. This is by design! It’s part of the the Zcash community’s effective and resilient decentralization that ECC has only a very limited role in Zfnd’s operations and in the community’s collective decision-making.

I followed up on this internally, and it sounds like we dropped the ball. It might have been due to personnel turnover in that department around that time. In any case, we’ll follow up and get you those introductions if they’re still desired.

Okay, let’s do it! We’ll organize a call and invite representatives of Zfnd leadership, and hopefully other leaders from the Zcash community if they can attend. We’ll reach out about scheduling and so on.

Dodger, I hope this clarifies that my intent in suggesting possible governance upgrades for the Zcash community as a whole was never to interfere with the Zcash Foundation’s operations, and I’m happy to support Zcash Foundation however I can going forward.

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Per the ZIP-1014, the Zcash community decided to give the grant decision power to the five-seat MGRC.
And ZF provides the platform to host & track milestones for each grant. The responsibility of project planning, management and delivery is up to the grant recipient team.

https://zips.z.cash/zip-1014

I understand that some individual contributors might not have the capacity for “managing” their deliverable, in this case, I support the idea to break down tasks in to bounties and expanding areas of contributions from individual contributors. Otherwise, per the ZIP-1014 language, the MGRC slice is primarily reserved for: “This slice of the Dev Fund is intended to fund independent teams entering the Zcash ecosystem, to perform major ongoing development…”.

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Are there any senior rust developer in the ECC that could be airdropped to the Zfnd for like a quarter to help them with engineering, and similarly another dev from the Zfnd to be airdropped to the ECC so the teams can get to work better ?

Also the ECC could be of help regarding hiring procedures and making sure the Zfnd staff plays on the same level ?

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