Community Sentiment Polling Results (NU4) and draft ZIP 1014

[daira]

An up-to-date diff of differences between ZIP 1012 and ZIP 1014 can be seen here.

[joshs]

@ChileBob

A thought - How about if the poll asked what the amount (if any) that the cap should be? Options could be None, 700k, 1.1m, 1.5m, etc

Hi @ChileBob. Thank you for the suggestion but it wouldn’t really matter what the cap is set at as we’ve stated that we would not accept the funds because it misaligns incentives and wouldn’t put Zcash in a position to be successful.

[joshs]

Hi @acityinohio. I’m happy to respond with additional rationale.

@acityinohio

Thanks for clarifying that it’s your personal position @joshs, I appreciate it. Given that, I’d like to reiterate a desire to see detailed reasoning from the ECC on why my proposed solution to the employee incentive issue is not tenable; I suspect it would make many community members rethink their position on the cap.

There are a couple fatal flaws with the model proposed as I understand it. First, it doesn’t account for existing employees and the necessary upfront funding of a pool. Secondly, there is an inherent tipping point where the company is increasingly unable to meet future employee obligations through purchases as the price rises due to the cap. The only way to address that in theory is to fully fund incentive an incentive pool up front, but that is also impossible due to our inability to accurately predict the future including variations in staffing needs, costs, and opportunities to bring in new talent over time.

There might be a model with other means of funding more slices with various %s being allocated to different pools with different rules, but I believe these suggestions are being hastily introduced, likely brittle and with unintended consequences, and a nightmare to manage in practice. I also assert that exploring all of these paths would delay community decision making while creating further distractions to the detriment of Zcash.

There are already two caps baked into the proposal. One is the duration of 4 years. The other is the % of ZEC allocation. These, along with accountability requirements and the ability to change consensus rules to defund ECC and others at any time, provide ample means to keep everyone in check. Not capping any of the recipients (ECC, the foundation, miners, grant fund) creates upside for everyone while protecting everyone against incompetence or bad behavior. It’s elegantly simple in both theory and practice.

You previously stated:

@acityinohio

Yes I am personally indifferent to it, but I understand the rationale behind it. I’m advocating for a funding cap under the belief that it was widely supported by the community given the support behind ZIP 1012, which is why the Foundation only lightly modified it as a proposed ZIP.

I have heard others mention that they voted for 1012, in spite of the cap. See:

@darius

N=1, but my vote approving #12 was in spite of the cap, not in its favor. I thought it one of the best proposals overall, but my vote shouldn’t be counted as community support for the cap. Of course I don’t speak for anyone else either.

My reason is like @joshs and @aristarchus: given the intensity of competition we have a better chance of success with top employees with serious long-term skin in the game. I’ve worked at a startup myself and would not do it again without that. (I’m not looking to work for ECC; it’s just that I’m not sure this point is getting enough weight.)

Others have also raised concerns about creating perverse incentives through the use of a USD-denominated funding cap:

@aristarchus

So it seems that in your example, if employees are promised 1000 ZEC per year, then the problem is that the ECC will be really hoping that price of ZEC doesn’t go up to much during this one year period.

And others are confused about why this is being debated at all. See @adityapk00 ‘s post for example: Community Sentiment Polling Results (NU4) and draft ZIP 1014 - #188 by adityapk00

@adityapk00

It’s not clear to me at all, what problem the cap is solving.

For the sake of clarity, expediency and the health of the project, I propose we move forward with a community vote using an agreed set of questions inline with the suggestions both parties have put forth.

[Yugo]

@joshs

First, it doesn’t account for existing employees and the necessary upfront funding of a pool.

Could you please elaborate on the first point in this statement?

@joshs

Secondly, there is an inherent tipping point where the company is increasingly unable to meet future employee obligations through purchases as the price rises due to the cap.

Has the ECC put itself in a position where they will not be able to meet employee obligations under a USD denominated funding cap? What are the company’s liabilities denominated in ZEC?

@joshs

There might be a model with other means of funding more slices with various %s being allocated to different pools with different rules, but I believe these suggestions are being hastily introduced, likely brittle and with unintended consequences, and a nightmare to manage in practice. I also assert that exploring all of these paths would delay community decision making while creating further distractions to the detriment of Zcash.

I think this is well said. I wouldn’t discount some other individuals coming up with an elegant solution however. In order for this to be a possibility though both the Foundation and the community needs to be well-informed.

@joshs

There are already two caps baked into the proposal. One is the duration of 4 years. The other is the % of ZEC allocation. These, along with accountability requirements and the ability to change consensus rules to defund ECC and others at any time, provide ample means to keep everyone in check. Not capping any of the recipients (ECC, the foundation, miners, grant fund) creates upside for everyone while protecting everyone against incompetence or bad behavior. It’s elegantly simple in both theory and practice.

Yes, I suppose these can be viewed as caps. As you stated all of these parameters (and more) can be changed going forward if there is a consensus. It would be nice to see an effort from the ZFND on the creation of a formal procedure or mechanism to help in making these changes. This sort of work takes years though and they are making due with the time allocated.

I also agree with the fact that the accountability requirements will help to keep everybody honest. How effective that whole process will be has yet to be seen. It’s another variable to consider.

On the USD cap though, I just don’t buy into the argument that the lack of one encourages good behavior. If anything it just allows for a different kind of behavior, one which we’ve seen in action for the past several years. If there is a set of circumstances/target that a population, organization, or person has to optimize, it will do so. This does not always lead to good results so I believe it’s healthy to keep the targets moving. If we instill a culture of discussion, change, and adaptation now then I think it will benefit us all.

I’ll stop here for the sake of brevity.

[tromer]

It sounds like the community discussion is converging onto a widely supported baseline, with a few well-defined choices that will be crisply captured in the prospective poll. Also, afaik the latest ZIP 1014 draft reflects all the local concerns that have been raised. Thanks, everyone and especially @acityinohio and @daira, who’ve been working hard to achieve this.

So I think we’re well poised for the final poll! Any last-minute issues/questions?

Note that arguing for specific choices (e.g., for/against a cap) can continue during the poll, but new changes/choices will be difficult to incorporate without repeating the sentiment collection, so speak now or forever hold your peace.

[dontbeevil]

Looking back, I wonder if there would be any community support for 10% dev fund forever (with ZF distributing or something). So, we don’t have to revisit this again.

[Anton1]

What will the fund do if ECC does not accept the conditions after the vote? It is important to understand what the plan will be in the future, whether the fund will invite employees from ECC to work on a project without ECC itself?

[joshs]

Hi Yugo.

@Yugo

Has the ECC put itself in a position where they will not be able to meet employee obligations under a USD denominated funding cap?

Fair question but no, we have not.

[tromer]

@dontbeevil

Looking back, I wonder if there would be any community support for 10% dev fund forever (with ZF distributing or something). So, we don’t have to revisit this again.

I think it’s healthy to revisit this in 4 years. It’s one of the controls we have in place to increase accountability and mitigate the risk of capture. And since we’ve learned a lot from this first iteration, I expect things to be faster and be clearer, next time around.

@Anton1

What will the fund do if ECC does not accept the conditions after the vote? It is important to understand what the plan will be in the future, whether the fund will invite employees from ECC to work on a project without ECC itself?

The draft poll includes a question on where the funds go if ECC decline their funding. In the hypothetical case where this happens, and ECC abandons its role as a leader in the Zcash ecosystem, then I do hope that the people hard at work on Zcash in ECC will find a way to continue their good work, perhaps funded by Major Grants or directly by ZF. (I also think it would be absurdly self-harming for ECC to intransigently reach that point.)

[joshs]

I can only speak for me, but aside from my faith and family, there is nothing more important to me than this project and this mission.

There is nothing more valuable to give myself to. There is no greater legacy. There is no greater thing of importance for our future. This work might of ruined me in that respect.

While I can only speak for me, from what I know of my coworkers at ECC, they a have similar feelings.

It’s scary to lay all this at the feet of the community. It’s uncomfortable to remain quiet rather than speak, so that others will speak. It’s been a stressful, grinding, frustrating, time consuming and difficult process.

But this project and this mission are stronger for the path we’ve been on this last year. A community has risen up. It’s remarkable.

I’ve not had more optimism than I do today.

[Autotunafish]

What worries me is that this ultimatum could potentially cost the ECC all the development funding in question (which I am very much against) and “wouldn’t put Zcash in a position to be successful” even more so than the other thing

[ChileBob]

I’m worried they’ll get a smaller slice as a trade-off against ‘unlimited upside’, but we’ll see what the poll says. Hope it works out.

[mistfpga]

@tromer

so speak now or forever hold your peace

Can the first question be “Does the community want to retain the ECC” ? or is that too loaded? it is essentially what is being asked. and I think it is a better way of wording it. Sure it is an ultimatum but that is what the consequences of voting “for caps” is.

I like things presented plainly.

[acityinohio]

An update from the Foundation. We are ready to poll and excited for this stage of sentiment collection. Post copied here:
—

Polling Community Sentiment on ZIP 1014

After feedback from the community and ECC — and an unanticipated but greatly appreciated pause on the process over the holidays — we are ready to move forward on a second sentiment collection process to produce a final dev fund-related ZIP for NU4. For more details on the discussion around this ZIP and the process that lead us here, please read this thread on the forum. You can also peruse the Foundation’s highlighted list of relevant links on NU4 governance if you need a broader refresher.

“Improved ZIP 1012” is now ZIP 1014

To reconcile some final changes make things more readable for the community, we’ve made a new ZIP to use as a basis for this round of sentiment collection. You can view it here. You can see view the differences between ZIP 1012 and ZIP 1014 here. (many thanks to ZIP Editor Daira Hopwood for making this view available)

The poll timeline and constituency

The Foundation’s previous post stated that we are committed to running a final poll on this ZIP. As was written then, the Foundation is polling users who participated in the forum vote (filtered by accounts created before March 2019) alongside the current community advisory panel through a single Helios vote. I’ll be reaching out to them today, and asking them to opt out of participating by Friday, January 17th (note that they can still opt out by not voting in Helios). The poll will open the next day, and we will close the Helios poll on Monday, January 27th and announce results on Tuesday, January 28th. I personally expect we’ll be able to draft a final ZIP by the end of that week.

What we’re polling

A number of questions were brought up in discussion around some of the key pieces of ZIP 1014, and their resolution should be based on community feedback. After many rounds of feedback, the Foundation will be using the following polling questions to gauge the community’s preferred modifications to ZIP 1014.

Do you support the ZIP 1014 presented here? ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants (ZIP 1014 is a lightly modified version of ZIP 1012, which had the most support in the previous sentiment collection poll. Note that all follow up questions in this poll assume ZIP 1014 as a basis; please read it carefully before answering the rest of this poll)

• Yes
• No

Using this ZIP as a basis, what should the distribution of the dev fund slices be?

• ECC: 35%, MG: 40%, ZF: 25%
• ECC: 40%, MG: 35%, ZF: 25%
• ECC: 45%, MG: 30%, ZF: 25%
• ECC: 50%, MG: 25%, ZF: 25%
• Any of the above distributions is acceptable

Do you believe the Foundation should have independent authority in determining Major Grants, or should there be a new Major Grant Review Committee as prescribed in this ZIP?

• The Foundation should have independent authority in determining Major Grants
• There should be a new Major Grant Review Committee with near-complete authority
• Either option is acceptable

Using this ZIP as a basis, should there be a US Dollar-denominated Monthly Funding Cap/Volatility Reserve for the shares to ECC, ZF, and Major Grants or should there be no restrictions? Note that ECC has indicated they plan to decline their funding if a US Dollar-denominated funding cap is imposed, while ZF has indicated that they have no issue with a funding cap. We are not measuring your approval of the specific amount of the Monthly Funding Cap in the ZIP; we are interested in your approval of the concept as a whole. The exact cap can be set by processes outlined in the ZIP.

• There SHOULD NOT be a Monthly Funding Cap and Volatility Reserve
• There SHOULD be a Monthly Funding Cap and Volatility Reserve
• Either option is acceptable

ECC has indicated they plan to decline their funding slice if there is a Monthly Funding Cap/Volatility Reserve restriction. If the community decides on a Monthly Funding Cap/Volatility Reserve and ECC declines their funding, where should their slice be redirected?

• Major Grants
• Zcash Foundation
• Miners

The Foundation’s expectation for a final NU4 ZIP

The Foundation believes the results from this poll will be clear enough to assemble a final ZIP based on the community’s will — one which the Foundation can honor in the Zcash trademark agreement and support in Zebra. Happy polling to all participating community members and thanks to everyone in the Zcash community for their contributions to this historic process.

[Autotunafish]

Did the ZF ever indicate they have no issue with no funding cap? And if not what was that (issue) specifically (sry can’t remember)
(Post zip-modification I mean, not just because zip 2012 didn’t include it)

[dontbeevil]

@amiller wondering if there is (unofficial) way for hodlers to vote these same questions . Not sure how many of the community members are actually holders of ZEC.

[amiller]

yall are welcome to send votes to the same stake polling address as before, and I’ll help reporting on them the same way. But I’m not going out of my way to steer people to vote with this stakeholder method until the problems discussed earlier are addressed

[zooko]

Speaking for the Electric Coin Company, we will not waver in our commitment (stated here, here, and here) to honor and support the community’s collective decision. We will use our software support process for the zcashd codebase and our shared rights to the Zcash™ trademark to support the community’s decision.

We will support the decision even if that decision includes a U.S.-dollar-denominated funding cap. In that case ECC will not accept the role of developer who receives developer funding, but we’ll still implement the consensus rules in zcashd for Network Upgrade 4, and we’ll still support the decision with the trademark.

(As we wrote here, we wouldn’t accept the funding under a U.S.-dollar-denominated funding cap, because we believe that the resulting incentive misalignment between coin-holders and developers would prevent the developers from succeeding long-term, thus putting the coin-holders at risk of not seeing the results they hoped for.)

Okay, other than that, we are delighted by the creative, thoughtful, respectful, constructive community that we’ve seen come to the fore through this complex and difficult decision process. Way to go! You’re making history here, even most of the world doesn’t know it yet. I guess that’s how history is usually made.

Edited to add:
P.S. Of course the effective and final ratification of the community’s decision will come when the economic majority of the Zcash users opt in by running software which implements ZIP-1014 or else running software which doesn’t.

[Autotunafish]

Well at this point I would have to change my stance on the matter anyways simply because the ECC is providing a stronger argument against the cap then the ZFND is willing to provide for it. I say willing because I’ve asked a couple reasonable questions (not talking about you Shawn, thank you) directed primarily towards the ZFND that no one can answer and of which I don’t need to ask the ECC their versions because they’ve answered them already.

[dontbeevil]

What happens to ECC (hypothetically!!) if community doesn’t hire ECC? Can you share high-level insights (if you can)?