There was no dev fund at the start.
What Zcash launched with was a Founders’ Reward, which was the functional equivalent of an ICO (like every other coin was doing at the time, such as Ethereum), but much better than an ICO for the Zcash community as a whole (because it was not pre-mined like an ICO which could be offloaded at optimal prices for the recipients or create a pump-and-dump, but instead was drip-fed out over time). The Founders’ Reward incentivised the development and creation of Zcash in the first place before it launched, and its non-ICO distribution mechanism incentivised continued support over the first four years. This was described in multiple blog posts before Zcash launched, starting here.
Now, it happened that the founders agreed that a percentage of the Founders’ Reward would go to ECC to fund its ongoing development work. Similarly, a subset of the founders also chose to donate part of their Founders’ Reward to the future Zcash Foundation. But these were decisions by the founders on what to do with their funds, not any sort of protocol-encoded community dev fund.
In the Continued Funding and Transparency blog post it was disclosed that at Zcash launch, the block subsidy would be directed as such:
- 80% to miners.
- 14.74% to the founders, investors, employees, and advisors.
- 2.88% to the Zcash Foundation.
- 2.38% to ECC (the blog post called it ECC’s “strategic reserve”).
The exact percentages (other than the 80%) changed over time, precisely because the founders could elect to do so at any time because it was their own funds they were directing. See for example the ECC Q2 2019 Transparency Report in which it was disclosed that the founders agreed to increase the amount going to ECC to ensure it survived the crypto winter.
Zcash itself did not have a dev fund until the first halving, when the Founders’ Reward ended.
The process by which the community came to consensus on creating the dev fund lasted for two years. Some timeline datapoints:
- January 2019: Forum discussion starts about the future of Zcash and potential ongoing funding of development
- April 2019: Ycash fork is announced for July that proposes to redirect the remaining 1.25 years of Founders’ Reward away from the founders etc. towards a Ycash Foundation in perpetuity instead (establishing its own permanent dev fund).
- May 2019: ZF describes what kind of dev fund proposals it would support (in the above forum discussion thread that was still going)
- June 2019:
- July 2019:
- Various community members start making concrete proposals, which are collected into a summary forum thread for visibility, and another megathread is started for discussion about the proposals.
- Ycash forks from Zcash.
- August 2019:
- ECC Statement on Sustainability
- ZF Guidance on Dev Fund Proposals
- ECC Initial Assessment of Community Proposals
- CoinDesk article about the proposal for a Zcash dev fund.
- November 2019: ZF polls for community sentiment
- December 2019: Long discussion about the community sentiment polling results, ZIP 1014 written integrating the feedback
- January 2020: Dev fund community polling showed consensus from participating voters (ECC blog post, ZF blog post).
- February 2020: CoinDesk article about the dev fund community polling.
- February-April 2020: Canopy Network Upgrade specified including dev fund consensus rules along with various other changes.
- June-July 2020: Funding streams implemented in
zcashd. - September 2020:
zcashd v4.0.0released with support for the Canopy NU consensus rules, including the dev fund. Nothing happens unless the Zcash community decides to run the software. - November 2020: The Canopy NU successfully activates without creating a persistent chain fork, indicating that Zcash full node operators (including mining pools, exchanges, block explorer operators, individual community members, etc) decided to run
zcashd v4.0.0(or later) including the dev fund consensus rules.
This was not a quiet discussion, and it was not limited to a small group of people.