Amendments to ZOMG and Potentially ZIP 1014

[cburniske]

With help from the Zcash community, the founding ZOMG committee has done a quality job standing up the organization from scratch (establishing a website & twitter handle, publishing a whitepaper of intent, standardizing processes, and processing >40 grants with diligence).

Despite the great start, there are a few things that could be improved in the next term to increase the sustainability of ZOMG. The goal of this post is to gauge community sentiment around these amendments, because if we want to put them into place as a community, we would need to amend ZIP 1014.

Therefore, I’m posting as a community member with intimate knowledge of the ZOMG, but not on behalf of the ZOMG. Furthermore, I have no self-interest in these matters as I will not be running for ZOMG re-election.

— The communicated time commitment for ZOMG members of 5 hrs/month, or ~1 hr per week, is far too little. At a minimum it should be 4x’d, to 5 hrs/week, 20 hrs/month. There are existing members of the ZOMG that feel this is still understating the required work.

— Alongside the bump in time commitment, should be a bump in pay from the current $500/month. Since this pay is opt-in, people can still opt-out if they’d like (as I did). Most people are not going to be large ZEC investors, and so I would at a minimum match the increase in salary to the 4x in communicated time commitment, but depending on the seniority desired and true time commitment needed, it may need to be higher.

—It would be useful to have a way for the ZOMG to approve resources to itself to pay for contractors, perhaps with an annual $ cap to limit the downside-risk of a self-dealing ZOMG. This allows the ZOMG to continue to invest in its own evolution. At a minimum, it should be acceptable for the ZOMG to put out bounties for work that it needs.

Longer run, I think there are questions that should be addressed like:

-How should ZOMG manage its treasury? Is it trying to spend all the ZEC it’s given each year, or is it trying to manage a treasury to last for decades (ZEC inflation only decreases, so now is the time to accumulate ZEC). Diversification of assets?

-How should ZOMG relate to the ECC and ZF? Right now it’s nested under the ZF, which helps operationally, but also exposes it to the same meatspace regulatory risk that the ZF may or may not be subject to – a DAO is messy, but increases the overall operational resilience of Zcash.

For the ZOMG to become a DAO is a heavier lift, where a number of questions like payment execution, key control & turnover, ZOMG member liability, and audit & evaluation of milestones would all need to be answered, but I think it’s something that should be worked towards. Giving ZOMG members more resources into the next session of ZOMG would be useful to that end.

[aiyadt]

Thanks for starting the conversation Chris. With the ZOMG re-election coming up, it would be nice to have a retrospective of current @ZcashGrants members to help improve and make funding better for 2022.

And since we are open about making changes to ZIP-1014, here are two funding aspects I’d like to hear about:

1. Discussion to open up Direct grants for teams committed to long term development on Zcash per ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants

Someone had posted a note on ZecPages about funding ZecWallet, Nighthawk, Unstoppable with direct grants while ZOMG continue with funding bounties and short term projects. ZECpages
Long term projects open up possibilities for full time resource allocation which can be beneficial going in to 2022+ to build a solid ecosystem software for Zcash Shielded Assets, cross chain swaps, tokens exchange, etc.

2. Setting aside funds for future Liquidity Provider incentives: we’ve seen numerous projects building cross blockchain infrastructure(ex. Avalanche with its $180M fund) and allocating LP incentives which increases adoption & awareness of Zcash being a serious player. We’ve also seen a couple grants recently asking to set aside large amounts for “community treasury”.

[ChileBob]

Direct Grants lead to complacency, projects under-delivering as they’ve already been paid - very bad.

[tokidoki]

@ChileBob

Direct Grants lead to complacency

Agreed. Milestone-based grants and bounties are better for the sustainability of MG fund into the future.

Also teams who want to work on Zcash long term, should find a way to be sustainable themselves. MG fund is not supposed to be a VC.

[aiyadt]

Zcash core development work is already funded via direct grant. The deliverables are coming in line with standard deviations. Maybe there’s a way to disburse funds after initial progress is reported?

Direct grants open up possibilities to expand Zcash products & developer suite to onboard new users. Maybe it’s too early, maybe direct grants would make sense with PoS transition which requires ecosystem wide development which the core teams might not be able to deliver. ZSAs might come soon and it would be good idea to have in-house development or external partners interfacing with Zcash tokens before going live.

Zcashers need to start thinking broader to target growth in adoption towards the wide cryptocurrency audiences.

[hanh]

Direct grants would require a high amount of transparency and development ecosystem maturity that I think we haven’t reached yet.

One could argue that ZF and ECC are direct grants. Before we discuss extending to more entities, shouldn’t we resolve the transparency issues raised recently?

[ZecProphet]

I agree.

As far as funding, viability, determining commitment, etc. I believe it would make sense to fund projects that have demonstrated something concrete.

For example: To determine if a new app that works with Zcash blockchain, libraries, etc should receive grant resources there should be a few requirements.
Such as: project can be built & ran, have a github repo, active commits, etc.

Just my 0.00012289 ZEC

[wobbzz]

At a very basic level I agree that the time commitment should be increased and would support a coinciding bump in pay to support this increased commitment. I base this assessment on:

• The gaps to achieve ubiquitous adoption listed in the ZOMG white paper
• @ml_sudo’s discussion about “The Work” that ZOMG could be doing to run more effectively if they had time.
• And basic logic that tells me that 5 hours a month x5 members is simply not enough time dedicated towards managing a 40% budget allocation.

Given that the nominal compensation for ZOMG members is currently derived from the ZFND budget I understand that this increased cost would encroach on their budget and am not sure how willing they would be to provide more given they are also trying to hire out their team.

I think that zip-1014 should at a minimum be amended to allow ZOMG members to be paid by ZOMG funds (still administered by ZFND) for up to X hours per month, whatever we want to agree that hour limit is (I support an increase to 20, then evaluate the performance and workload as the members build upon and perform via the established framework). Is this legally feasible if we amended the ZIP with ZCAP approval?

I think that the ZOMG should and could be doing more outreach to the broader crypto-asset ecosystem for the purposes of finding/marketing to people that may be interested in working on Zcash related projects but are not familiar with the funding and seeking areas where Zcash can interoperate with the rest of the ecosystem. I would love to see podcast discussions, social media outreach, and targeted outreach to up and coming projects like @mhluongo’s Tally cash, an alternative to Metamask that has a noteworthy amount of social traction (have seen multi-chain interest expressed by community members in their discord).

Zcash also has a lot of amazing things coming down the pipe and I personally feel that we are about to get slammed with renewed interest in Zcash whether that be from market cap appreciation or gaining old followers who left because of some contentious items like the trusted setup and lack of shielded pool usage (which appears to be growing quickly). I personally hope to see a majority of the ZOMG members run again and think they have done great to this point given the limited time commitment.

Let’s make incremental improvements and iterate on what’s working, with ZCAP approval of course.

Aside from the current issue of ZOMG needs more time to support major grant management there is another idea that has surfaced recently that might be appropriate for this thread, albeit maybe a longer term discussion. I see allocating more hours to MGRC as a basic first priority.

Wobbzz 🛡

[PhusionPhil]

@cburniske

— Alongside the bump in time commitment, should be a bump in pay from the current $500/month. Since this pay is opt-in, people can still opt-out if they’d like (as I did). Most people are not going to be large ZEC investors, and so I would at a minimum match the increase in salary to the 4x in communicated time commitment, but depending on the seniority desired and true time commitment needed, it may need to be higher.

I would support a salary of $45,000 USD equivalent for full time, audited commitment, from a qualified person on the ZOMG/MGRC committee.

@cburniske

-How should ZOMG manage its treasury? Is it trying to spend all the ZEC it’s given each year, or is it trying to manage a treasury to last for decades (ZEC inflation only decreases, so now is the time to accumulate ZEC). Diversification of assets?

Using the annual supply in the treasury for things such as Liquidity Pool supply for the Thorchain RUNE bridge would be appropriate. Commissions for the ZOMG reps who arranged the Liquidity Pool as well as a bonus to the treasury from the profits that are typically curated in those pools. Having the Funds or a portion of them locked in Liquidity Pools would prevent the mess of the DAO but also present the issue of “who is providing the paired currency” to go along with the ZEC in the theoretical LP.

[joris]

@cburniske

I have no self-interest in these matters as I will not be running for ZOMG re-election.

Chris, you can’t do that. What’s going on ???

[zooko]

Yeah I vote no on Chris being allowed to not run again. Who approved this!

[aquietinvestor]

Below I have attempted to translate Chris’ concerns into a modest Amendment of ZIP 1014 that (1) allows ZOMG to use the “MG slice” of the development fee to cover a stipend for members and hire contractors for administrative and operational support, subject to limitations (currently ZF covers all operational costs with its own funds), and (2) leaves ZF oversight in place and maintains its role as the administrator of ZOMG’s funds.

I believe all that’s required is making an amendment to Subsection 1 of the “MG Slice (Major Grants)" section and adding a new Subsection 8. My amendments are [italicized].

My objective was to address Chris’ concerns while maintaining the integrity of ZIP 1014, so I hope the amendment is equally fair to both ZOMG and ZF. I would appreciate hearing thoughts, feedback, and alternative language from community members, ZOMG committee members (e.g. @cburniske @ml_sudo), and ZF (e.g. @Dodger @secparam @amiller). Hopefully an official amendment could be made before the new committee members start in November.

ZIP 1014.1 – Amendment to the “MG Slice (Major Grants)” Section:

Subsection 1: “These funds MUST only be used to issue Major Grants to external parties that are independent of ZF [with the exception of the provisions outlined in Subsection 8]. They MUST NOT be used by ZF for its internal operations and direct expenses. Additionally, BP, ECC, and ZF are ineligible to receive Major Grants.”

[Subsection 8: Major Grant Review Committee members SHALL receive a stipend from the MG slice for up to 20 hours of work per month. The stipend MUST be administered and disbursed by ZF, based on a fair market value rate determined in good faith by ZF. In addition, subject to approval by ZF, Major Grant Review Committee SHALL have the option to use funds from the MG slice to hire contractors for administrative and operational support at a fair market value rate determined in good faith by ZF. The total amount spent on additional administrative and operational support MUST NOT exceed $XXX,XXX per year.]

[aiyadt]

@hanh

Before we discuss extending to more entities, shouldn’t we resolve the transparency issues raised recently?

Here is the ongoing topic about the transparency breaches, please bring up specifics of what you want to get addressed. Zcash Foundation - Breach of Its Obligations Under ZIP 1014

@hanh

Direct grants would require a high amount of transparency and development ecosystem maturity that I think we haven’t reached yet.

The transparency of direct grant recipients would need to be in line with ZIP-1014 or follow up ZIPs.
Zcash has existed since October, 2016. Several privacy focussed coins have since then raised private money and are pushing the adoption to the end users while some Zcashers worry about maturity. Announcing Iron Fish - Privacy for Everyone | Iron Fish - Private, anonymous, and easy to use cryptocurrency
For the direct grant recipient - development roadmap, HR and execution, all need to be evaluated & approved by successful entrepreneurs & builders in the crypto space + ZCAP. ZCAP and the community needs to make the bold consensus to attract parties that can build teams and execute a framework of RFPs which can be defined by ECC/ZF.

Why Direct Grants - We are more than half way to the issuance of ZEC. Zcash is capable & has decided to fund development & growth activity initiatives without having conflict of interests with the teams that build VS the same driven teams going to VCs to raise funding and ending up “selling” privacy as a service as seen in the rest of the industry.

I want Zcash to be the defecto Privacy coin with several real-world use cases for holders, and if ZOMG funding cannot make that happen, then if ECC can manage building on multiple fronts, especially with the recent user-focussed product strategy, I would support increasing the % of Development Fund allocation to ECC. ECC transitions to user-focused product strategy - Electric Coin Company

Lastly, for the teams working on large deliverables, all that matters is making clear there will be funding, as it is challenging to convince & attract new builders to start planning long term contributions to Zcash.

@zooko

Make it clear that there is more money, because sometimes people don’t realize that all it takes is just asking.

[holmesworcester]

@aquietinvestor

[ Subsection 8 : Major Grant Review Committee members SHALL receive a stipend from the MG slice for up to 20 hours of work per month. The stipend MUST be administered and disbursed by ZF, based on a fair market value rate determined in good faith by ZF. In addition, subject to approval by ZF, Major Grant Review Committee SHALL have the option to use funds from the MG slice to hire contractors for administrative and operational support at a fair market value rate determined in good faith by ZF. The total amount spent on additional administrative and operational support MUST NOT exceed $XXX,XXX per year.]

As another ZOMG committee member who does not intend to run again this year (though I might in future years) I support this language, with one modification.

What I like about it is that it gives ZOMG the ability to spend on support staff instead of increasing the time commitment or compensation for ZOMG members.

I’m fairly certain that if all ZOMG members are expected to spend 20 hours / week we’ll exclude most of the candidates we most want to attract, since no one who has a typical full-time job will be able to run for ZOMG.

And I think it’s also very likely that strange and undesirable power dynamics will emerge within the group if some people are at 20 hours and others are at 5 hours, since it will be hard to disagree with and vote against the person who’s doing all the work. I’m not completely sure about this, but I think it’s worth trying a 5 hours / week ZOMG commitment with adequate support staff before increasing the ZOMG commitment or giving the green light to up to 20 hours. And I think the ZOMG itself should make this decision of how it uses these resources, through consensus if possible or majority vote.

So the one thing I would modify in this language is that I think the ZOMG itself should decide this time expectation as a group, rather than each individual being able to spend up to 20 hours automatically regardless of how other members think that time and work should be divided.

So I’d say something like, “MAY receive, upon a decision by the ZOMG” rather than “SHALL receive”.

[wobbzz]

@holmesworcester

20 hours / week

Just a small note - the proposal was 20 hours per month, not week. Slightly more reasonable. Is that still concerning for you?

[mika]

If workload is one of the main issues - it was proposed to quadruple the time commitment.

How about increasing the amount of ZOMG members by implementing a hierarchy.
There are a lot of details to specify ofc.

[anon21505042]

@holmesworcester

What I like about it is that it gives ZOMG the ability to spend on support staff instead of increasing the time commitment or compensation for ZOMG members.

A paid intern program would go along way to bridge the community: providing the opportunity for up-and-comers all over the world—in all sorts of economies—to have valuable access to the candidates we want to attract, while giving them the resources to stretch their valuable influence on Zcash without compromising their other projects and personal lives.

A couple thousand dollars/ month isn’t going to be much of a draw for the kind of candidates we’d hope to attract, but the opportunity to have a real impact with minimal personal sacrifice, could be appealing.

[anon21505042]

@allyourbank “Translated to our ecosystem, let each of the 5 ZOMG members run their own grant budget, create a competition out of it, then let the community (ZCAP) rank the output based on KPIs and reward the ZOMG members accordingly for their time and effort? https://t.co/YsKsVeseN3” @wobbzz

Yes! Additionally, a zero-cost way to attract excellent candidates for the committee might be to AWARD each committee seat a specialist title and court candidates with the qualifications to innovate and advise within that specialty.

They wouldn’t necessarily compete with one another, but would represent and answer to certain populations within the community. At the end of each term that population might have strong opinions about whether their interests were served, and if not, recommend more acceptable candidates to serve them better.

[zooko]

Really neat idea!

[Dodger]

@cburniske

— The communicated time commitment for ZOMG members of 5 hrs/month, or ~1 hr per week, is far too little . At a minimum it should be 4x’d, to 5 hrs/week, 20 hrs/month. There are existing members of the ZOMG that feel this is still understating the required work.

As I understand it, the Foundation’s estimate of the likely time commitment was based on the experience of its own grant committee. However, it’s become clear that the activities being undertaken by the ZOMG Committee are different to those of a normal grants committee.

There are two obvious ways to address this: increase the expected time commitment (Chris proposes quadrupling it) or look at ways to reduce the burden on the committee members.

As @holmesworcester points out, we definitely do not want to increase the time commitment to the point where we discourage good candidates, the vast majority of whom will have full-time jobs that they’re not prepared to give up in order to serve on ZOMG.

FYI, I do not believe that allowing ZOMG to hire its own staff is consistent with either the wording of - or the intent expressed by - ZIP 1014. While we could obviously change the wording to allow ZOMG to hire staff or engage contractors, it would, in effect, turn ZOMG into an independent operating entity, which is not what the Zcash Community intended when they drafted and approved ZIP 1014.

Therefore, we must look at ways to reduce the time burden. To that end, we have advertised a Communications & Ecosystem Relations Manager role, we have been interviewing candidates, and we hope to be able to announce some news on this front in the near future.

In the meantime, over the past couple of months, we have stepped up the amount of support by having our COO, Alex, join the ZOMG meetings to directly field requests for help. Examples of the increased support that has resulted include a dashboard that tracks the funds ZOMG has available to it (see the Dashboard tab), as well as providing a single view of all the grants and milestones that ZOMG has funded (see the Grants tab).

We have also taken responsibility for assessing grant milestone payout requests, with a clear policy in place to ensure that the ZOMG Committee retains control, by having the ability to take back control of any milestone payout decision, and by having the final say if the Foundation judges that a milestone payout request should be refused.

Alex has worked with ZOMG to make updates to the grant platform that will encourage applicants to submit better and more complete applications (e.g. clear milestones that can be objectively assessed), with a nudge to remind applicants to post to the forums.

Once the Communications & Ecosystems Relations role is filled, we’ll be in a position to make a step change in the support we can offer to the ZOMG Committee. For example, we’ll be able to filter new grant applications in advance of the fortnightly ZOMG meetings so that any that do not meet the Committee’s criteria can are excluded from the agenda, while the Ecosystem Relations Manager can respond to the applicant appropriately (e.g. requesting more information, prompting them to post to the forums, etc.).

As an aside, I think that, when defining those criteria, the Committee should give some consideration to what constitutes a “major grant”, as set forth in ZIP 1014 (i.e. “large scale, long term projects”). I get the impression that the amount of time required to assess a $5,000 grant application is not significantly different to that required to assess a $500,000 grant application. Filtering out grant applications that do not meet the definition of a major grant could go some way to reducing the time burden.

We’ll also be able to provide a single point of contact for grant applicants (so that ZOMG Committee members no longer have to respond to and liaise with grant applicants) and communications support (e.g. posting updates to the forums and Twitter, organising calls with existing and/or potential grant applicants, publicising the work of ZOMG and advertising the fact that funding is available in order to attract more and better grant applicants).

With that level of support, I expect that the majority of the necessary support work will be taken off the ZOMG Committee members’ hands, reducing their time commitment significantly. That will be an appropriate point to review the expected time commitment, and if it turns out that the existing estimate is still insufficient, we can address that appropriately.

For the avoidance of any doubt: I believe that we can resolve these issues without changing ZIP 1014. To my mind, these are teething issues, to be expected with any new structure of this nature. Importantly, they have not prevented ZOMG from approving over $2.4m worth of grants. It’s unfortunate that the change in leadership at the Foundation distracted us from providing more support sooner but we are making progress, and we are prepared to devote the necessary resources to close the loop.

I appreciate that there are some who are unhappy with how ZIP 1014 turned out but I do not believe that it is appropriate to use these issues as an excuse to make changes that are not inline with the Community’s intent.

We all - the Foundation, the ZOMG Committee members, and the Electric Coin Company - have a responsibility to implement what the Zash Community asked us to do - and what we agreed to do - when they approved ZIP 1014.