I wasn’t planning on writing this today, so bear with me. I’m responding to some of the ideas here and here.
Specifically:
At their limits, funding from block rewards or fees are similar. In both cases, the incentives are to increase either the value of ZEC or the amount of fees collected. In both cases, there are real-time signals to measure success (price of ZEC or value of fees accrued). In addition, right now, every ZEC holder is already paying a fee via a token dilution mechanism to fund Zcash. That fee is currently ~10% (the current rate of dilution of the ZEC supply) - a portion of which (20%) goes to the Dev Fund. If we switched to fee-based funding, fees would have to increase drastically to sustain costs, at least until txn volume increases by orders of magnitude. Maybe this is better than a more behind-the-scenes dilution mechanism, maybe not.
However, ultimately, the main reason I think the difference between block reward funding or disbursements of the ZSF funded by a combination of block rewards/fees/donations will trend toward the same result is that everything is socialized in Zcash. If somebody creates a killer app or marketing campaign that results in huge demand for ZEC - everyone else benefits just as well, or maybe even more! Theoretically, this is fine - we’re all in it together right? We’re all equally capable and equally hard working. But I wager it’s closer to a group project, where everybody can get the same grade for unequal contribution. So how do you solve this group project problem?
Get rid of the Dev Fund and individual app developers can charge a fee, either txn-based, downloads-based, etc… If their app does well, they benefit in proportion to that. Problem solved right? Well - why shouldn’t they add in other blockchains, get more paying-users? Oh, turns out there’s way more users for other cryptos? I guess ZEC support goes on the backburner for now.
Or let’s say the app creators don’t abandon ship and stick to their ZEC-only guns, what about some compensation for the developers who made the network possible in the first place? Do they not benefit from creating something of value which then others used to create more value? Without a socialized funding mechanism, can people work on things that just benefit everyone else? How do you decide the compensation for someone that helps to lift all boats? Put the software under a business license and make money from licensing? That won’t fly in crypto-land.
Ok, keep everything open source, but install a 2% fee for txns as a kickback for network developers. But wait - there’s more than one org doing network support? How do we know the proportion of the fees to give to each group? Did one do something that led to more Zcash adoption than the other? How do we know? How do we change the rules to reward good contributors or remove unhelpful ones? I guess we need some governance ability to be able to change things.
But wait, how do we do governance? The most clear governance mechanism is administered by one of the orgs that receives the Dev Fund? Isn’t that a conflict of interest? If I don’t like the way things are - I can just leave, use another coin? Is there another coin that has everything I like about Zcash and nothing I dislike? No? Dang… Fork Zcash and make my own project? Hmm… that’s an uphill battle and I like the people in Zcash, I don’t want to do that! Oh! Maybe we try coin-holder voting? It could be representative of every Zcasher, allow for permissionless voting, and weighted by those who have the most skin in the game! Wait, who would even be in control of what gets put to a vote? Would anyone even listen to the results? There’s a possibility that voting for what’s best for ZEC price in the short-term may not be best for the long-term? Even worse - it’s possible people may vote on things when they have absolutely no idea what’s best for Zcash?? Oh, coin voting isn’t even possible anytime soon? Never mind then…
Anyway, it is my belief that Zcash is actually much more similar to running a country than we may think. And also that many mechanisms that have been tested for at least a few hundred years will ultimately serve Zcash best in some combination we have to decide. I think a mixture of public (socialized) and private funding models are needed. And I think active and agile democratic governance mechanisms to decide on the things that affect everyone are needed. I don’t really think forum posting alone will do anything either. People have to work together, form coalitions, come up with proposals, have discussions, etc. Everything we love and hate from the real world.
Also, to at least put some sort of conclusion to this that may result in an inch of progress, I think I largely agree with a lot of the ideas in @joshs’s post. I don’t know the ins and outs of all consequences of changing the trademark agreement, but I would really like to see the Zcash community develop a self-administering and democratic governance process. It’s important for many reasons, not least of which is creating legitimacy around future funding decisions to avoid both real or imagined self-dealing.
Ok, back to work! I hope this was enjoyable to read, and if not - I get it.