Dev fund proposal: 15% Opt-In only + other sources

Dev fund proposal: 15% Opt-In only + other sources

The idea behind this proposal is to ensure continued funding for developement of Zcash and creating a more efficient, fair, transparent way how fund are used.

Main characteristics of this proposal:

  • 15% Opt-In voluntary def fund contribution by miners from mining block rewards
  • Distribution of this def fund: 75% to Zcash Foundation and 25% to ECC.
  • exploring other possible funding resources
  • possible related change in Zash governance
  • creating or enhancing of a realiable voting/polling system for allocation of funds

Introduction:

In 2020, when the Founders Reward of current 20% of the Blockreward expires Zcash won’t be fully developed and continued funding to ensure further development is needed.

My personal opinion is that just and only agreeing to a given % is not enough but some fundamental changes in the dev fee compared to the current founders reward should take place to ensure a way better distribution toward developement, more transpareny, more community agreement on what funds are used, more efficient way of fund distribution as well as enforcing the Zcash Foundations strength.

Proposed Changes compared with the current founders reward:

  • The Zcash Foundation will be the main recepient of the Opt-in Protocol developement fee donation option with 75%, the ECC should receive 25% .
  • The development fee should be Opt-in and no longer mandatory.
  • The dev fee should be 15% Opt-in instead of the current 20% founders reward.
  • The Zcash foundation, as the community representative should than distribute funds upon needs.
  • The Zcash foundation should continue to implent a system designed to include the community into taking important decisions, be it prioritizing given development targets or other associated with the distribution of the funds generated through the opt-in development fee.
  • other funding sources should be explored ensuring that Zcash developement funding is not soley dependent on voluntary miners dev fund opt-in option.
  • Change in Zcash governance with the target to have a more transparent, better controlled and better allocated treasury and fund using.

Rational why the Zash Foundation should be the main recepient for the new dev fee:

  • The orginal idea was to have the foundation as the sole dev free recepient, but to meet the foundations own requirements NOT being a sole recepient 25% of the dev fee are allocated to the ECC. With this split the requirement for the foundation to support this proposal should be meet.
  • The foundation is a non-profit organization, while the ECC is a for-profit company.

  • The foundation does not have the pressure to generate a profit and/or associated with this costs for management, bonuses, etc…

  • With the foundation in charge of the funds distribution the community itself should have more influence on how much for what should be spent while at the current founders reward this option is more than limited. Having in mind that we talk in general (in most other proposals as well of fees, no matter they are mandatory/opt-in) about funds from the community, here from the miner community, it should be just fair that the community has some influence and hearing.

  • In my opinion the ECC and the current founders reward are too much compromised allready to make it a thrustworthy solution if the ECC is the direct recepient of the dev fee for the following reasons:

a.) Allready a very unfair designed founders reward which last priority is development. Hence we got allready into periods with a deficit, no matter the Founder reward itself is generating a huge amount of funds.(Andrew Monro pretty good describes this here:)

b.) The founders reward is not handled transparent enough. Making the Zcash Foundation the recepient i think we can await way more transparency. We have no single idea what when why is used for what exactly. The so called ECC transparency report gives some general idea, but that’s it. It’s far from being real transparent.

c.) The foundation is not compromised with an ongoing law suite which again refers to the distibution of the founders reward, or part of it. While this is an ongoing law-suite and nobody knows its outcome it still should be a huge concern as other law-suites may follow IF this one ets decided against the ECC.
Again Andrew Monro desribes this problem very accurate:


d.) The foundation can concentrate ONLY on Zcash as it has no other duties than that, while the ECC management, advisors, whoever are to some extend allready involved in other projects as well. It’s no secret that zooko, ECC CEO, is allready involved in a lot of other projects like Tezos and many others.

e.) With a huge founders reward in place the product Zcash isn’t even nearly finished neither enough funds have reserved to ensure this (or we wouldn’t all write proposals!). This seems to be the result from a wrong designed founders reward distribution and/or internal company burdens/restrictions/design/whatever. Whatever it is, funding from the dev fee should not directly directed to the company but channeled through the foundation with an hopefully more responsible and developement oriented distribution. (See again Andrew Monros conclusion:)

f.) The current Zcash development is soley dependent on how the current recepients (Founders, individuals, stake holders) share this reward. Best described here by Andrew Munro:


Rational why the new dev fee should be 15% Opt-in:

  • Currently the founders reward is 20%, but not the whole is going to development, actually only a small part of it seems to be directly used for development. The figure below demonstrates best that only a small part (2.8%) is directly allocated to the ECC"

ECC_Transparency%20Report%201

  • The initial founders reward has/had to reward early investors, investors, advisors and who knows who else. Early investors have been paid-off allready and with he foundation in charge there is no more need for several “side expense” which take a bigger part of the current founders reward, for example but not limited to advisors…

In the above figure we see that 12.8% is/was directly allocated to founders, vested employees, advisors, others. These expenses should not occur in a new dev fund. Hence there is no rational to keep the current 20%

  • The Foundation, if in charge of 75% of the dev fund, could outsource lower level tech tasks and doesn’t have to use high paid and high qualified tech personal to due lower tech tasks. The ECC would receive 25% of the new dev fund to ensure at very least maintaining tasks directly related to Zcash functionality and development. For further research the foundation can allocate funds towards the ECC for concrete needs, research, development targets.

  • 15% opt-in only def fund should stimulate exploring other possible funding sources as well. Several such immediatly come into my mind which at least could be short-mid-long term solutions for additionally funding by the ECC:

– Including a transaction dev fee with a higher transaction fee introduced. Especially on transparent transactions a dynamic transaction fee/donate option shouldn’t be an issue.

– Possible priority high privacy transaction dev fee for transactions that get processed with high priority and max level of privacy in exchange for a dev tax.

– Opt-in wallet usage dev-fee

– Moving to a hybrid conensus design, POS, byzantine vault, similar or innovative one, where the ECC & Foundation funds stake as well and generate staking rewards for the dev fee.

– Going from fully open source to partially licensed for innovative, unique features which could be aquired by similar products or projects that are interested in such features. Could as well be in the form of an opt-in voluntary mechansim in exchange for free usage of such.

– placeholder for other ideas that could generate additionally funds…

Rational behind opt-in instead of the future mandatory dev free:

  • Simple just not breaking the initial setup of 90% go to miners. With Opt-in thrust is build and no promises broken while leaving the door open to have the community with this proposal and other funding stream generating proposals outside block reward distribution/fees having enough funds to to keep Zcash an ongoing developed project.

  • With the opt-in only status this proposal meets the requirements for Zcash Foundation support and on the other side leaves open doors for additional revenue and funding options.

General and concluding thoughts, comments & articles related to this proposal:

NICs chart/figure about other projects and their funding systems:

This is an interesting chart which shows the different percentage of different projects allocated to funding, founders etc… Analyzing this figure we can notice that by todays date:

  • Projects without any mandatory funding can be successfull as well: Bitcoin, Litecoin, Ethereum Classic, Monero as examples.

  • Projects with very low % of funding can be successfull as well: IOTA (5%), Komodo (5%),

  • Projects with very high funding are not garanteed to be successfull: Gnosis (95%, TenX (49%), Banor (50%)

  • The chart tells only half of the story as there is no USD$ value attached/converted to a given %. This could mean that in theory a project having 50% funds allocated for “founders researve” could have generated only 10M due the low price of it’s crypto currency units. O like in Zcash case, the current founder reward has an estiminated exchange rate value so far $200+M and there is a good chance the current ongoing Founders Reward until it expires in Oct. 2020 will have generated a total amount of $300-$400M if we take the last weeks exchange rates for future estiminations.

About current Zcash governance (again by Nic Carter)

We can argue if the current Zcash governance is “Benevolent dictator” as described by Nic Carter or a Corporate Control (my personal opinion).

My personal opinion is that a change in the governance model within this proposal is the automaticlly outcome. Once more fund are allocated and to the foundations discretion on how to use them, no matter if again a majority of it goes to the ECC, the foundation will have a bigger say. This should as well mean the whole community should or could have a bigger say and/or influence.

While we are anyway discussing major changes for the future of Zcash, why not try to improve every aspect of it which could include voting/polling model, foundation member elections (When, how often, how at general), and and and. Every discussion how to improve the governance concerning this proposal with 75% of funds allocated to the foundation is more than welcome and can be included.

Meeting the Proposal requirements of the official Zcash Foundation support statement:

With this proposal all 3 points (a, b, c) are fully meet. I’am not sure another proposal meets all 3 points but this one DOES definatly!

Proposal Help Request:

As a non-native-English speaker it’s hard to formulate things correct, have good grammer and don’t make mistakes. Leave alone the whole ZIP format later.
IF anybody likes this proposal, shares the view and the current problems it adresses and wishes at least this to be an alternative to whatever other proposal, feel free to help with correcting, sentencing correctly or any other input, thoughts, suggestion, discussion. The more gets discussed the more can be fine-tuned in this proposal.

@sonya
Please remove ZIP Proposal - 8-15% Opt-in or 4-7.5% Mandatory Dev Free |75% Zcash Foundation 25% ECC|
from: Future of Zcash dev funding — megathread / everything in one place

Please add this proposal to Future of Zcash dev funding — megathread / everything in one place

Resources:

A Cross-Sectional Overview of Cryptoasset Governance and Implications for Investors by Nic Carter

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Will do, thank you for pinging me!

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