Antifragile Zcash Governance

Governance
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Governance is a pillar of Zcash. It’s important to understand why, as it’s not the case with Bitcoin, for example.

  1. Our “dev fund” requires it.
  2. Zcash from its inception was something that was meant to evolve, which also requires it.

So that’s a pillar of our ecosystem. Yet, missing, it is.

The design has to be simple. We have complex cryptography and that’s something that is accepted, thanks in part to (I am being told), the elegance of the code and the number of competent people that have reviewed it. Our governance should not just be antifragile, it should be reasonably simple and make sense to potential new adopters.

Notice, I have not said ZEC token holders in the title. As a ZEC holder, what matters most to me is the antifragility of the system. I don’t mind being wrong and I don’t need to be on to top of the governance pyramid. I am therefore very curious to read your proposals for a simple and antifragile governance system for Zcash.

With that being said, as I have voiced, my belief is that ZEC token holders are central to that objective of an antifragile Zcash governance, so that is what I will personally defend at this point.

The way I see it, ECC, ZF and all other contributors are the brains of the project and ZEC holders, when it pertains to governance, are necessary for two things:

  1. Have full decision power over the main parameters of the dev fund. It doesn’t have to be, and probably wouldn’t be strategic, that they manage the day to day expenses. But again, they would have the final say on such things such as how big is the dev fund, or to what addresse(s) of a trusted third party does it get sent to for finer management.
  2. Have a say in all the major decisions regarding the project, so the world doesn’t just know what ECC/ZF and their “communities” think; they also know the opinion of actual ZEC holders.

I believe that ZEC holders should have both options to answer questions directly as well as to delegate their vote. A ZEC holder of economic training will be better suited than ECC and ZF (to cite just them) to answer an economic poll. That same person may prefer to delegate when it comes to the depreciation of t-addrs. Having either one or the other would essentially reduce the quality of the outcome of the vote.

We should set a schedule. I suggest monthly on a specific day, maybe the 28th :wink: . That is so ZEC holders can get organized around that in advance. We may later decide that March will be for X type of decisions, while June for Y type of decisions; it’s all something we can work out progressively.

So that is my proposal. We start simple as described above and we iterate, while never forgetting the KISS principle as far as governance is concerned. Complexity can stay outside of it, such as in the minds of ECC, ZF, @hanh and other engineers.

Last but not least, if holding ZEC implies having a voice in the project, it will most certainly become an important pillar in itself, to its financial value.

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“Antifragility is a property of systems in which they increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures.”

An example is Bitcoin mining. If some operators are forced offline, hashrate drops and difficulty goes down, making it easier for new miners to earn block rewards.

How do we make a governance system that incentivises or allows voting groups to make better, timely decisions under increasing stressors?

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Always good to be reminded of the exact definition, thank you! It’s definitely a worthy and exciting goal for our governance.

The way I see it, the incentive flows naturally from the voice of ZEC holders being taken seriously. If you hold token, there will be some kind of pull towards voting directly or indirectly in order to ensure optimal future for the project.

Honestly I find this post as well as those regarding token voting to have rather low engagement, and that’s a problem. @joshs is suggesting token holders are free to do their thing and there is no need for approval from ECC or ZF. While true, it is also completely ignoring the dynamic at play.

Zcash was bootstrapped by ECC & ZF. Since then, ZEC token holders had no incentive to stake because we’re still a PoW blockchain, no incentive to govern because we have no token governance. To simplify, token holders were asked to hold and shut up, so they did exactly that. Now here we are, on Zcash main/default discussion platform, with ZEC token holders not associated with ZF or ECC nowhere to be seen. It’s fair really, why would they bother.

How do you expect the very few independent ZEC holders left on the forum to reach out to all other ZEC holders @joshs? That’s right, it’s not a realistic proposition.

In essence, ECC & ZF has created this dynamic from the start and a smooth yet freaking energetic transition initiated by them towards ZEC token governance is what is needed here. Timing is a crucial element that we also must take a little bit more seriously. cc: @zooko

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Still thinking about your idea, but I have some thoughts: :student:

1.) Does this imply the largest holders of ZEC have full decision power of the dev fund?

If thousands of 2 ZEC guppies want a parameter one way yet 2 whales don’t, I’m not sure I can square a vote “strong finned” by the 2 whales and moreover, I’m not sure I believe someone’s size makes them have better decisions for the herd. Humans are irrational and they do irrational things everyday.

Perhaps you can give a small example of a particular “parameter” that my come up in our future?

2.) I strongly agree on your second point, but I think finding a balance is :key: . What about 40% coin holders / 60% “community” ? Open to ideas on the ratio.

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A stakeholder vote within a blockchain that has no governance implemented at a technical level would give you just that: a weighted opinion. It’s simple and it’d be great to keep it that way.

Then, to implement anything that ZEC holder want, it will still take people to write code, users to run node and make transactions, and miners to run it. Those people absolutely have a vote through what they decide to do, or not to do.

I can smell from here ECC & ZF wasting resources on trying to implement yet another “community” of developers, one of miners and one for pretended users why not, where 1 person has 1 vote. It’s completely useless. Some developers will output 1000% of an average one, and lazy ones will output 10%. For the most part miners are very reactive to the incentives given to them so we just need to remain competitive.

Last but no least: users. There are two governance camps here. The people who believe this can be ran like a democracy and waste resources to figure out ways to poll those users, where you find me saying this is utterly ridiculous. And the people who believe this can be ran like, say Apple. In my humble opinion, the user poll is right in front of our freaking faces: our market cap. Users don’t necessarily know what they want. Maybe they do for right now, but it doesn’t tend to produce anything useful over the long term.

Those are some of the most tangible and strong signals we have: ZEC holders decisions, our developers willingness to work within our ecosystem, and our marketcap. Those things are in a healthy tension. If one pulls too hard in their direction, they may lose the other two.

Token holders have to be mindful of everything I have written above when they vote, it’s literally their responsibility. Ultimately, in a design that is antifragile, I can only see them having 100% of the vote. And besides, what is the dev fund? It’s essentially 100% tokens taken out of their holdings through inflation. So it’s all theirs, and we should maybe think of this problem a little bit more in those terms.

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Maybe so, but the current system does not put anything “at stake”. You mention that having coins does not necessarily make someone a better decider, but what about the current composition of the ZCAP? What makes them better?
The nomination process is “be a friend of someone from ZCAP or be involved in the community.” As a result, you have roughly a hundred people with equal voting weight, i.e., Zooko or Vitalik has the same vote as me.

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Nothing, which is why I’m not sure I agree 100% coin voting (aka full decision power) is the correct approach. It will be hard to convince me that maxi in any direction is beneficial here.

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I am confused by your explanation. “them” refers to the zcap members. Yet, you say that you don’t trust coin voting because the zcap isn’t better.

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Nothing makes zcap better, nothing makes coin voters better. Neither direction by itself, taken full magnitude, will accomplish our goals is my idea. Together they could be a basis, and we need to make sure they are independent to be effective.

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Just put things in the right order and it’ll be fine.

I repeat because it’s really important: the dev fund is money taken out of the ZEC holders pockets through inflation. Therefore, nobody but ZEC holders are entitled to decide what to do with it (we can and probably should delegate the fine management to a person / group we find aligned with our interests, evidently). Especially not people that are getting paid by it such as ECC and ZF. On this matter, only the vote of ZEC holders matters. There’s no way around this one, it’s very simple, fair and straightforward.

With that clarified, ZF, ECC and all others can do whatever they want, create any number of gated communities, no problem. If they wish, they can even never ask the opinion of ZEC holders. But at the end of the day, if they wish to keep receiving a piece of the dev fund, they must show that their work is advancing the Zcash ecosystem in a way that is aligned with the ZEC holders.

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