Hey Ric, thank you very much for contributing some thoughts based on your experience.
The following is my personal opinion — not speaking for the Electric Coin Company.
I agree with you that a vesting schedule is a key part of the successful Silicon Valley model. I think what we’re starting to see after ten years of the cybercoin industry is that the simpler model, that various cybercoins have tried, isn’t good for long-term, sustainable, incentive-aligned operations.
The case you cite — that the majority of the Ethereum founders, who received funds from the Ethereum ICO, are working on Ethereum-competitors, or unrelated things, or retiring, instead of continuing to contribute to Ethereum — is one example, and there are many more cases like that throughout the industry.
I think people should scrutinize all such structures and review how funds were used over the years — not to judge other people’s choices, but to learn what works.
Based on the current results from the Zcash community governance process (1, 2, 3), this community is poised to create a structure that is simple and decentralized, that encourages open source and independent contributors, and that works.
As I wrote in an earlier thread:
The part about deferring the upside for years, and the part about making each person’s share contingent on their own performance, was missing from a lot of cybercoin funding structures. I think this is the biggest piece of what we mean when we talk about “accountability”.
ACCOUNTABILITY
Now, how can we as the Zcash community apply this idea of a vesting schedule? How can a decentralized community enforce accountability on the recipients of its dev fund?
There is no obvious way to encode such a mechanism into consensus rules. I suspect that any attempt to encode such a mechanism into the consensus rules would turn out to be impossible, or else very complicated, with major unintended consequences. Maybe the various DAO experiments that are being tried will show a path for this that we can consider using in a few years from now. (But most of them will probably show us all how not to do it — by crashing and burning.)
But, I think the best answer is already contained within Mario’s comment on this thread! Which is: the community has the inalienable power to revisit the consensus rules in the future and change them as necessary in order to enforce accountability. This is not a choice, it’s just a basic fact, that the community has the power to change the consensus rules. There’s no way anybody could prevent the community from having that power.
If you give someone 1,000,000 coins up front, you run the serious risk that they’ll take the coins and give you nothing back, or give you not enough back, over the years. This isn’t because they are bad people, this is just the nature of how the world works. You can’t realistically ask people to spend years of their life prioritising something unless there is some ongoing positive consequence to them for doing so. This is what Ric is claiming (above) didn’t happen with a lot of the Ethereum founders.
If you say to someone “We’ll give you 20,000 coins a month for the next 48 months.”, then they should be more incentivised to focus their attention and their efforts on things that align with all the other coin-holders. At the very least, they cannot just dump their million coins up front and retire, until 48 months later. However, experience shows that you still run the risk that at least some of them will passively receive the coins every month for four years and do little or nothing to help.
But if you say to someone “We’ll give you 20,000 coins a month for the next 48 months, but we’re going to meet again in a year to review your performance, and if we think it would be better for us to replace you with someone else at that time, then we’re going to cease giving you those coins and put someone else in that role.”.
Well, that’s different! As long as what you’ve said is credible (i.e. they believe that you’re really going to do that), then you can bet that they are going to prioritise your interests and values and work hard to continue to earn your trust.
To summarize, Ric is pointing to a serious structural issue that a lot of the coin projects over the last decade have encountered, and Mario is pointing to a solution to it. This is the way that a decentralized community can hold the recipients of its dev fund accountable.