I’ve been thinking a lot about this. I’m really not sure if ECC would apply for the job of Principal Developer in this scenario. We will serve Zcash however we are needed, provided that we could be effective. However, I’m not sure we could be effective in the role of Principal Developer as described here.
So if this ZIP were the community’s choice, ECC would support it, in cooperation with Zfnd, with software and with the trademark, as we’ve consistently pledged to do, but we might not apply for the role of Principal Developer.
If anyone reading this hasn’t already seen the ECC livestream from yesterday, please watch it! This is our latest and best effort to show you what we do and why.
There are two problems that make me think we might not be able to serve the community effectively in the “Principal Developer” role under this ZIP.
The first is just the low level of funding. At the coin price of $40, the Principal Developer would have only $219k/mo to do their work, and they would be prohibited from seeking external funding. That would mean that we wouldn’t be able to maintain the “Zcash flywheel” that we talked about in yesterday’s livestream, in which a cross-functional, high-performance team leverages our expertise in cryptography, software, legal, regulatory, marketing, bizdev, etc. to produce a whole that is greater than the sum of its parts.
One of the slides from the livestream:
That low level of funding is primarily due to the low coin price more than anything else, but if we gamble on the coin price coming back up in time to sustain the flywheel, then the second problem kicks in, which is the cap or limitation on the upside that is imposed on the Principal Developer by this ZIP.
In order to serve our mission, we have to recruit and retain the best people, and we have to focus them all on shared long-term goals.
We’ve succeeded brilliantly at that so far! But the competition for world-class talent is brutal, from surveillance capitalism megacorps and from well-funded startups.
Good employees need to know that if they work hard and perform well that they’ll still have a job next year and the next, and they need to know that if their collective project becomes a runaway success, that they’ll have a share in the upside. Megacorps and startups offer them that. If we want to maintain and build strong teams, we need to be able to offer that, too.
I personally will always be devoted to Zcash no matter what, but if I am going to recruit and retain a team of the best — a team which is greater than the sum of its parts — or if anyone else is going to do so on behalf of the Zcash community, then they’ll need to provide this.
I’m especially mindful of the shared long-term goals part. Silicon Valley has shown that in order to create amazing new things and to scale them up to billions of users, you have to get a strong team together, give them all a share of the upside of success, and you also have to defer that upside until many years in the future, and make each person’s share contingent on their own continued performance.
The ICO boom of 2017 almost completely ignored this hard-earned wisdom, with predictably disastrous results. The Zcash Founders Reward, launched in 2016, got it partially right. Now, as the Zcash community is deciding what to do after 2020, we should be careful to allow that time-tested long-term incentive model to work. Since the community can allocate a stream of future funds from block rewards, it should be possible to use the long-term incentive model, as long as the governance rules don’t prevent it.
(Note, this is deviating a bit from our policy of not commenting on dev fund proposals other than to clarify what impact we think they would have on ECC. Here I’m also saying more broadly what I think good dev funding should look like — namely that it should be compatible with the long-term incentive model. Also we stated a few general principles about what ECC thinks good funding and governance should look like in our livestream yesterday—see slide below. We’re starting to relax this policy a little due to the time pressure of the ZIP specification deadline, and also because it seems to me that the community is now more confident about its power and its right to define the future of Zcash how it wants. This post from me is pretty off-the-cuff, so hopefully it holds up.)
Another slide from the livestream (see video above):
It currently seems to me that the role of Principal Developer would make it difficult to maintain a high-performing team. I think ECC could potentially serve Zcash better by not taking that role and instead focusing our efforts on something else.
Now the role of Outside Developer is an interesting option. The current depressed coin price combined with the percentage limitations in this ZIP mean that even if it got that role, ECC would be forced to do some combination of ending most of our initiatives and laying off invaluable team members (breaking the flywheel), and/or trying to find new sources of funding that are compatible with our mission. Either or both would be extremely disruptive and risky for the Zcash project. But, the fact that the Outside Developer role allows us to leverage the full potential upside from coin price appreciation, and doesn’t require us to eschew other revenue sources, means that we could at least try it.
Note that one of the main goals of this ZIP was to encourage more teams to apply for the Outside Developer role. This is a goal that I enthusiastically support! The fact that ECC would consider applying for that role is a good sign that it is achieving its purpose. (Especially if the coin price comes back up.) It might be even more appealing to teams who already have other businesses and other sources of funding than to the ECC, who are currently “all in on ZEC” and who currently don’t have any auxiliary sources of funding.
Okay, friends, I apologise for writing you such a long note, but I didn’t have time to write a shorter one (since the deadline for ZIPs is tomorrow). Here’s a recap:
- Please watch our video (above) to understand what we do and why, so that you’ll understand where we’re coming from whenever we talk about this.
- The best known model for creating breakthrough innovations and scaling them up to billions of users is:
- Give team members a reasonable amount of job security contingent on their continued performance,
- Give them a piece of the upside in the event that their shared project is a runaway success,
Defer that upside until many years in the future, and
Predicate their share of the upside on their continued performance.
- We — the Zcash community — should use this model. All four of the pieces are necessary.
- If the community chose this ZIP, ECC would of course support it with software and with trademark, in cooperation with Zfnd, as we have always pledged to do.
- We probably would not take the role of Principal Developer, as we currently don’t see how we could be effective in that role, unless the cap was removed on the potential upside for the entity taking this role.
- We might consider applying for the role of Outside Developer, although with the current coin price and the dev fund percentage limitation, the outcome of that would depend heavily on what other sources of funding we could find, what costs and strings-attached came with any such external sources, and how much of the flywheel we would be forced to abandon.
Thanks for listening! I’ll be eagerly following along as we go forward!