Absolutely! 
. This perspective was a key consideration when I crafted my proposal.
In breaking it down, after the first year, ECCās allocation would be adjusted from 17% down to 11.9%. This mechanism effectively necessitates the ECC to undergo a re-evaluation for their funding annually (unless the price of ZEC sees a significant rise). Such a framework offers a tangible methodology for the ZCAP to gauge and adapt dev fund allocations rooted in performance metrics.
Currently, the ECC gets 7%, your proposal first bumps it to 17%. I think this part should be discussed first.
Iād say it is a serious part of risk management.
Hello @hanh, thank you for raising this point. Letās delve into the specifics of the proposal. The initial increase to 17% might seem significant, but itās crucial to look at the broader picture. As indicated in the chart below, in April 2025 (assuming the price remains the same), the ECC would actually be receiving a smaller USD amount each month under my proposal.
Building on what @noamchom mentioned, my proposal inherently encourages dev fund recipients to pursue actions that would enhance the value of ZEC. Instead of protracted debates, surveys, or extensive forum threads, the essence is clear: If the dev fund recipients donāt drive up the USD price of ZEC by at least 30% annually, theyāll witness a relative decrease in their USD funding.
To clarify, this approach doesnāt predicate on astronomical increases in Zcash transactions, the implementation of new protocol features that might take extended periods, or the unfounded hope that developers would remain loyal without adequate financial support.
@hanh, @noamchom, Itās worth noting that under this framework, the sole mechanism for dev fund recipients to enhance their future allocation would be through a detailed application to the Zenate. This would necessitate them presenting a robust proposal outlining their funding requirements and their intended deliverables. Based on their performance history - spanning over a year or more - the Zenate would then relay their findings to the community. Subsequently, ZCAP, under the guidance of the Zenate, would be in a position to cast votes on these allocation change proposals.
An essential feature of this mechanism is its dynamic nature. At any juncture, the Zenate has the authority to propose that if a dev fund recipient isnāt meeting expectations, they should be defunded or removed entirely.
There is a massive distinction that hasnāt been acknowledged yet
Miners Provide Labor Before compensation
Block Reward takers receive ZEC for free with no protocol layer delivery guarantees, not even post-hoc
(all of the assumptions we make about Block Rewards are trusted, subjective, human-biased)
Sadly, we havenāt got a programmatic solution where Zcash could equitably, justly, et al compensate Zcashers who provide value
As Zcash currently operates, only Miners are compensated quid-pro-quo for the value they empirically provide. All of the Block Rewards are Speculative and Discretionary.
The price of ZEC dropped by ~90%. Even if they take 100% of the block reward, they would still receive less than before. However, I would posit that trying to compensate them for the decline in ZEC price is questionable.
It implies that the ECC, or any other automatic devfund recipient, (I am not singling them out), should not be impacted by the price of ZEC.
I think this runs contrary to the principle of a crypto project: high risk / high reward.
By the way, if the price of ZEC went up I donāt think we would be discussing reducing their slice. Indead, I suspect we would be talking about increasing it.
Donāt ever tell me that Iām selling ZEC. It does sound offensive to me, because Iām one of those jackasses who funds it monthly from a portion of my personal income. But in the meantime, that doesnāt stop me from having a good grasp on the many patterns of price behavior. I donāt want to give anyone fodder for catching shorts, so I wonāt write anything here. But thatās what I see, then others see it too. Iāll just say that the major US exchanges offer complimentary services to sell large volumes without affecting the price, a kind of slab that canāt be overcome until demand actually exceeds the necessary sales volume. But the current market is so weak that ZEC canāt do that. And at the point of market decline, these servicers have to outperform the market.
Iāll also point out two more of your erroneous theses. Your calculations in absolute numbers are completely wrong.
The first is that miners always sell the entire volume. It is not difficult to open a chart with any PoW coin, for example, and compare the price behavior of different charts. ZEC always loses. I communicate with quite large miners and I know how they behave in different market segments. ZEC is not profitable to sell for the last six months. Selling it is simply irrational, which is why many of them chose the strategy of exchanging it for BTC, but that wouldnāt have happened if they knew there was no other big seller.
The second thesis is that right now the funds are not selling 20%, at best about 10% and they are not selling the whole volume because they know it will further deteriorate the price of ZEC and thus their position next month. Luckily for us all, our structures are headed by sober smart and long-term oriented people, so when they see that it is becoming dangerous to sell ZEC, they take very painful steps, instead of saying that we will just sell more ZEC. So this whole proposal seems like a bearish favor. They donāt need it. In short, what youāre doing simple multiplications - it doesnāt work that way. And you wonāt even see your 20$ youāre laying down because the market is unable to swallow such volumes of money in a falling market. We are now already below the profitability of ZEC mining and creating huge security problems already in this system. Miners are not ordering the most advanced asics for Zcash, preferring other algorithms. And by shifting the model relative to other coins on the algorithm you are simply proposing to deaden ZEC. Make its purchase for investors a futile endeavor. If the first priority is to give technology to the world, Iād rather stand aside, because Iām not a philanthropist, or rather I havenāt reached a level where I can afford it. This is my last post in this thread.
there is no way that cutting even harder into zcash miner profit margins would be smart or even sustainable. the networks already got a hash power centralization crisis on its hands with coinbase imposing long confirmation times. its going to scare away a lot of possible investors if we start taking the idea serious to slash proof of work miners this much worse. most of them are barely profitable as it is right now. if it goes much further then risks of a chain split go up, block reorgs, double spends, it would be a PR nightmare at a time when zcash is already struggling so bad. at the worse case keep it at 20% but redivide the amounts a little different 5% ECC 5% ZF 5% ZCG and2.5 5% to the new org in switzerland, then make the last 2.5% a lottery amount that goes to a random Z-address how about we give people some excitement in using z-addresses
I have a simple proposal thatās compatible with any amount of dev fund allocation:
Anyone who will receive funding must first bring forward a tentative plan for how they will use the funding and argue why their plan will accrue value for ZEC holders.
IMO, it doesnāt really make sense to talk about percents when we donāt have a clear idea of what needs to happen to drive Zcash adoption. Maybe the organizationsā plans are just to keep Zcash on life support until the next bull market, in which case we should allocate less. Or maybe thereās a great product/marketing strategy that needs to be acted on now, in which case we should allocate more.
Talking about percents without linking the amounts to concrete plans is like deciding how much youāll pay for a car before being told what kind of car it is.
I value your insights, @hanh. My core belief is that we risk a lot if we prematurely defund central pillars like the ECC and ZF without having a sturdy alternative in position. My proposal is rooted in ensuring the ECC and ZF are backed adequately from November 2024 to December 2025. Post November 2024, the power of decision will be in the hands of the Zenate, bolstered by a ZCAP vote, creating space for QEDIT and Shielded Labs to enhance their capabilities and bring forward solid plans to our community.
Additionally, itās worth noting that the Zenate will be open to entertaining proposals from ANY entities enthusiastic about contributing to Zcashās growth. This includes entities that might initially opt to showcase their potential through the grants program. By paving a clear path for these organizations to transition from grant recipients to full-fledged contributors, we are not only diversifying the talent pool but also hoping to magnetize a broader range of contributors.
To emphasize, the intent isnāt to reprimand ECC or ZF but to strategically shape the trajectory ahead. In my assessment, undermining their resources or axing them out without a structured transition plan might jeopardize Zcashās foundational stability. Who then shoulders the mantle of node maintenance, Wallet SDK upkeep, Zcon organization, and the continuous support for QEDITās endeavors?
In essence, my proposal acts as an interim measure. It neither blindly supports ECC/ZFās track record nor proclaims them as the ultimate choices for sustained funding. It is, rather, a beacon to usher stability by momentarily supporting them while the Zenate is set up. By 2025ās end, I envisage the Zenate will be in a formidable position to conduct performance evaluations and dictate the best financial allocations, possibly redistributing roles among a wider array of deserving entities.
Perhaps not defund but rather demand as a community an accurate accounting of how the current funding is being spent. The so-called transparency reports only give a small window into things. If this is truly a community driven decision, then have both current organization present their plan along with a budget for continuing operations post-halving and post-current dev fund. Reading the other thread about user research, if this was really done at ECC, then that information should have been used to drive the short and mid roadmap. This is a great opportunity for the leadership of both orgs to present their plans beyond a decentralization plan or another wallet or more research.
@earthrise, I concur with your sentiments regarding ECC and ZFās transparency in terms of their funding needs. However, Iād like to delve deeper into one particular observation you made.
It was under my impression that ECC has been on a ālife supportā mode for some time now. With only a handful of core protocol developers, the CEO taking on an engineering role, and the primary focus on the wallet SDK, wouldnāt the monthly operating costs be closer to around $200,000? Would it be worthwhile to estimate what proportion of the dev fund this represents?
The recent Q1 transparency report sheds some light:
From Q1 transparency report:
Bootstrap received coins at a value below the ECC operating expense level for
Q1 2023. During this time, Bootstrap received coins at an average of $345,000
a month (at the Q1 average ZEC price, $45, for each of the three monthsā
distribution dates), and Bootstrap and ECC incurred average monthly expenses
of approximately $677,000.
Given the above, it seems evident that thereās a considerable disparity between the funds received and the actual monthly expenses. It would be prudent for us to gain a clearer understanding of the budgetary requirements and allocate resources appropriately.
Additionally, if the situation does arise where the ECC requests funding in the range of $150,000 to $250,000 per month, are we prepared to support them? While Iām open to adjusting these figures, based on the data I currently have, maintaining ālife supportā would almost certainly consume more than 7% of the dev fund post-halving.
We need to get out of what I believe are the āvanity projectsā. Only 50% of spending is going to development. We need this to be closer to 90%. ECC should focus almost exclusively on development. I
what is your life support if 90% is used for development and everything else is cut?
Yes.
No Dev Fund extension before governance changes.
No Dev Fund extension before roadmap.
Iām not sure Iād be comfortable putting the responsibility of governance on new entities that, afaik, donāt exist, or havenāt earned my trust yet.
Given the size of the company and the type of industry, I donāt find that unusual at all.
QEDIT seems great and all, but ZSAs havenāt even landed, we donāt know what their impact will be, and your insistency on giving them a slice of the pie questions the same judgement that @hanh brings up regarding the Zenate:
I appreciate the feedback received so far, but it seems that there hasnāt been a constructive alternative proposed yet. Maintaining the 7% funding to ECC, which equates to about $100,000 USD monthly, appears unsustainable. Such a scenario would necessitate the ECC to relinquish some essential resources, which, in my view, are crucial for Zcashās future.
Iām open to considering any viable suggestions or strategies that align with the long-term vision and sustainability of Zcash.
when things get tough, we are experiencing the risk of creating too many organizations with divergent interests and creating a bloated overheard.
your alternative to dilute zec holders or to try to recut the deal with miners is also not an alternative.
first,
the easiest way to help the zec price is to make a strong statement that you all believe you are fiduciaries for zec holders and create viable model investors can trust and maybe the coin price will go up.
The community are the people who own zec, not some imaginary group that needs to be taught about zec. itās us! and your proposals and plan force many of us to sell.
You have failed to implement or propose a viable development path. proposing to increase the 21m cap only caused fear and increases the risk of owning zec which causes more selling.
you have only 1 plan and itās block rewards and who can you take from: the zec holders via inflation or the miners. thatās a scary plan to many of us.
i can come up with many suggestions if you want to create a viable ecosystem. but i canāt offer any suggestions that are not good for zec holders. iāve always felt the overhead was too high. but id have to get under the hood to know for sure. My background is corporate workouts, restructuring and reorganization, among other specialties zcash might be able to use.
if your plan, which only focuses on inflationary issuance as a funding mechanism is the long term vision without accountability, without governance, without a viable plan, we may need a new vision. or you can roll the dice and continue while praying for the price to go up.
ZEC under $30 for the next 12-15 calendar months is enough to cripple this entire project.
There I said it, since nobody else seems willing to.
This entire project is predicated around the value proposition of its native coin.
Explicitly devaluing ZEC (by increasing the block rewards % in the post halving era) would shock the crypto market and serve as a self perpetuating curse.
The only way for this Treasury/ Builder ecosystem to reach sustainability is for ZEC to miraculously be revalued up near $100 or so. (And that valuation needs to stick for a while)
Sub $30 ZEC for another year is a doomsday countdown for all three of the current institutions.
My opinion is that as a community, our best potential to reassure the market that it has in fact grossly under valued ZEC is to commit to eliminating the block rewards completely.
Our cherished non-profits should already be mitigating their funding risks by seeking private equity in whichever means they are best suited to, rather than pleading for a 100% increase in the block rewards allocation.
It seems to me that there are several alternatives proposed. Whether they are constructive or not, is a matter of opinion.
