We are Bernard, Sid, and Findlay from Areta, a team of governance experts helping foundations and DAOs use governance to their advantage. We have had the privilege to serve other industry leaders such as Uniswap, Safe, Aave, Arbitrum, and dYdX.
Over the past few months, we’ve been in touch with different stakeholders, including Shielded Labs, Electric Coin Company, and the Zcash Foundation, to get different insights into Zcash’s journey. We know Zcash as one of the OG privacy-focused projects in crypto and appreciate the position and challenges associated with transitioning from previous more direct decision-making to a more open and community-oriented governance and funding model.
In the past, we’ve worked alongside other leading Foundations and DAOs helping to shape core governance components that are transparent, effective, and built for the long term. If you’re curious to learn more about our work and approach, check us out here.
Looking forward, we hope to bring this expertise in governance design to Zcash’s community as a process-driven, professional sparring partner, helping push things forward. To that end, we plan to apply for a grant from the Zcash Community Grants Committee. You can find an initial proposed project scoping here and we welcome your thoughts and feedback below.
Otherwise, please feel free to reach out and ask any questions directly on Telegram to @findlay_b. We’re looking forward to connecting and hope to play a part in moving this project forward together.
Would you be able to elaborate into how you would envision a potential dev fund governance system that would be entirely decentralized, fully Sybil resistant and without any KYC? This question is not about the governance of the protocol, outside of the dev fund.
To be clear regarding the scope of my question, I know some people want “the” “community” to be included, but I specifically do not, at the level of the dev fund control. I believe various actors can inform stakeholders (ZEC holders) so that they can make informed decisions. Those actors could then also be entrusted by ZEC holders for a defined period, to manage parts of the funds.
Aside from an end goal for the dev fund governance, what I would like to see is a schedule of how to get there. I imagine the first stage as simply having the ZEC token holders validate or reject a budget for the following six months. Then progressively delegation could enable large token holders with little time to entrust people to vote for them on smaller items. Ultimately, everything should happen on chain, in a way that is predictable and where all ZEC holders at large are informed of the key dates when they can perform their important governance role should they want to do so, probably through wallet notifications.
Thank you for your quick feedback and thoughtful question. Also, we appreciate you outlining a vision for a potential governance model, it’s helpful for us.
Our process will start from a first-principles basis, ensuring governance is built around what best serves the Zcash ecosystem’s goals, as defined by its stakeholders. Rather than assuming a specific model upfront, we’ll first establish a structured decision-making process to guide the selection of a long-term governance framework.
Define a Decision-Making Mechanism → Designed using Areta’s neutral, non-biased input, refined by stakeholder discussions, governance workshops, and market research on comparable models.
Identify Governance Goals & Funding Priorities → Gathered through a mix of structured (e.g., surveys, polls) and unstructured (e.g., workshops, forum discussions) input.
Align on Governance Model Option Space → Break down all components of governance models, including outlining the full option space, considering factors like: specific participants, decision-making structures, checks & balances, and implementation feasibility.
Recommend Governance Models → Ultimately, the process will culminate in recommended governance model options for selection by the Zcash community.
Regarding timeline and implementation, we’ve outlined a two-phase plan in our proposal, spanning 12 months. The first step will focus on defining a decision-making mechanism, ensuring that the community has a structured way to evaluate and ultimately select the governance model best suited for Zcash’s long-term needs.
Thank you again for your feedback and input on the dev fund. This is the sort of engagement we hope to have much more of moving forward and would encourage you to join any future workshops to share your ideas!
As we mentioned above, the workshops will be fully open to everyone in the Zcash community and we will actively encourage all stakeholders to join. In our early conversations, we have already had commitments from major stakeholders interested to attend and participate.
The decision-making mechanism, which will be our first focus to outline and get buy-in on, will be a temporary solution until a more permanent governance and funding model can be put in place. At a high level, the weightings will be designed to balance fair representation with effective decision-making, to help keep the ball rolling towards a selection while maintaining fairness.
Could you please confirm that, given we are talking about Zcash, a cryptocurrency that has privacy values at its core, those workshops will be organized in a way that fully preserves the privacy of stakeholders participants?
Additionally, would you be able to elaborate on how you envision to prevent people from a quick buy and sell of ZEC to participate to a vote, likely undermining the project governance?
Because I am using a Trezor and it only supports t-addrs, I was able to sign a message proving not only that I own a certain number of tokens, but also most importantly, that most of those tokens have been in my wallet for about two years. Just like in order to gain citizenship rights (voting, etc) you generally have to wait a few years of being a resident, I believe being able to prove at least 1 year of ownership should be required to participate to the governance, at least of the dev fund.
Lastly, I believe it is of critical importance to have a safe place where fellow long term ZEC token holders can discuss among each others. On this forum, this thread may get “polluted” at any point by random people that may not hold any ZEC. As a token holder I profoundly dislike being on this forum, but the dev fund hijacking has lasted too long and I feel like I must do anything in my power to make this stop, including expressing myself here.
Yes, good question! Of course, we’ll make sure that everyone’s comfort levels around privacy are respected during these public sessions. As such, no part of these workshops will ever require participants to display their ZEC holdings, and for those who prefer more privacy, we will also gather input asynchronously through surveys and other methods to ensure broad participation.
The first phase’s decision-making mechanism is still being defined, and we will consider factors such as the length of time ZEC has been held and other relevant criteria as part of the governance model design. This is exactly the kind of input we’re looking to gather, and our approach aims to be as granular as possible in defining governance structures, including strong incentive design and safeguards against gaming.
Again, this feedback is well taken, and our #1 goal is to hear views from all stakeholders and encourage discussion. We hope to encourage more perspectives here and through the course of the engagement that we will incorporate as a key part of our work.
Thank you for the introduction! I am happy to see that you are enthusiastic about Zcash and see its potential.
As far as I know, there have already been some talks between you and the key stakeholders ECC and ZF. I am interested in hearing more about it:
How have the talks gone so far? From the conversations I’ve had and the posts I’ve read, I’ve gathered that there are different opinions regarding a potential governance model (e.g. emphasis on coinholder voting vs. being very cautious of it because of concerns like misaligned incentives and game theory).
What approach would you suggest in order to come to a decision that takes into account the opinions of all groups (e.g. ZF, ECC, core-devs, long-term coinholders, etc.)? How can we get all on the same page?
What is your opinion on coinholder voting in the broader context of a governance model? What do you think of favouring long-term holders as already suggested by outgoing.doze?
I am looking forward to your feedback and hope we will see more community members engaging in this thread!
As a side note and to be fully transparent – @aquietinvestor and I met Areta for the first time in December last year. We encouraged Areta to introduce themselves in the forum to see what the community thinks about bringing in an independent mediator to help us with decision making. So far the interactions were positive and constructive.