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

Advocate: boxalex

Requesting furhter information, see 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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Hi! Thanks for taking your time to create this proposal. I haven’t reviewed it in depth, and I intend to do so within the next week.

Could you please follow my request on Proposal authors, please read: Help making ZIPs ?

That will help me and ZIP editors know which forum proposals we can help turn into ZIPs.

Thanks again for your contribution, and for your patience as I take some time to respond to all of the proposals.

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added: Advocate: boxalex

Requesting further info

For fine-tuning this proposal i think it’s necessary to have more information provided. From the Foundation as well as the ECC:

List of questions and request to be answered:

1.) The foundation stated that it would only support If its not the only recepient of a possible new dev fund. Are there any fixed % tied to the foundations decision on minimu/maximum?

2.) The foundation made its own proposal with an opt-out mechansim, but declared it would only support an opt-in mechanism. This seems to be a conflict/contradict for itself. My opinion is the foundation should have a more than clear line here what it supports and what not, hence asking is the foundation going to support only opt-in proposals or not?

3.) To make a better proposal i think the community and proposal makers should be given some facts from the ECC:

a.) What is the sum of monthly wages (without bonsues, ect) for how many ECC employees per month currently?

b.) Is it planned to keep the staff size after october 2020, lower it, or increase it?

c.) Currently (to my knowledge) advisors, founders get compensated no matter how. Is it planned to continue to compensate advisors, founders, ect. with a new dev fund after 2020?

d.) On Zcon1 it was mentioned US$ 1,000,000 are needed per month by the ECC to continue work after Oct 2020, how are these funds calculated and split into categories?

e.) Do these 1M in funds include the foundation funding share or just the funds needed by the ECC?

f.) In case of a continued or new dev fund for the ECC, will the ECC fully transparent show what the funds have been used for?

g.) Can the ECC declare that any current founder reward (ECC part) and future dev fund finances are only used for the Zcash project.

h.) Are there any financial audits done, planned or planned for a new dev fund after oct 2020?

i.) What are fixed known targets for the roadmap Oct 2020 - Oct 2024 that need funding?

j.) What are the possible targets for a 2020 - 2024 roadmap?

k.) Will the foundation and ECC threat each proposal equal? This includes not favouring, advertising, etc. so a fair polling/election/selection/whatever is granted?

l.) Is there yet a design/mechanism/system planned on how a given proposal will be selected. Any time lines or more information? Who is deciding which design/mechanism/system is used?

m.) What is the scenario for the ECC if for example a proposal like this one is choosen which favours opt-in but it results in less than US$ 1M as requested/wished by the ECC, let’s say 500k-750k? Is there any additional research done by the ECC for funding sources or is the ECC just relying 100% on a future dev fund?

n.) At what stage is the Zcash trademark multisig attempt and when will the trademark sharing with the foundation be finished?

Thank you very much in advance. I hope my opinion gets shared that such information is needed if a realistic proposal should be made.

Until that it makes most sense to put this (my proposal) temporary on hold as i can not see any logic to continue further without the requested details.

1 Like

Great questions. I can answer some of them.

We haven’t stated any fixed percentages, so it’s up for debate. The underlying desire is to not have unilateral control over the future of Zcash. Some control is desired; ultimate authority is not.

That was @amiller personally, not the Foundation.

However, the Foundation agrees that the opt-in issue needs to be dissected and examined in depth. We’re internally workshopping a document that @acityinohio wrote, which we have committed to releasing no later than August 6. It goes into detail on this topic, among others.

I can’t answer most of the questions in #3 (although I did post a relevant comment in Sarang’s thread). But this question I can address:

Speaking for the Foundation, not ECC (to be crystal clear): We will treat proposals equally up until they become ZIPs, at which point it will be necessary to rigorously deconstruct their pros and cons and decide between mutually exclusive paths forward. I don’t think that’s possible without making judgments about which ZIPs are good ideas and which should be eliminated.

There are some democratic elements to this process, but also technocratic ones — personally, as a Zcash user, I want expert gatekeepers to watch for changes that might break or weaken Zcash. That’s what the ZIP editors do, on behalf of their respective organizations.

This will also be addressed in @acityinohio’s document.

There’s no concrete ETA right now. Legal agreements are hard, the lawyers have to do their thing, everyone has to attend a bunch of meetings to negotiate and re-negotiate. The latest from @acityinohio is that it’s moving forward but not done yet.

I hope this helps! I know the lack of clarity is frustrating, and we hope to offer better guidance on the ZF’s perspective soon.

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Thank you very much for answering your part. Could you please forward the rest of the questions to someone able to answer them?

This sounds as the foundation is withdrawing from it’s original decision “ONLY” to only supporting opt-in proposals. IF any of the core points the foundation has set, like the opt-in mechanism for example is going to be edited, an official statement should be made as soon as possible as several proposal, like mine, take the foundation’s core stance as the basic of the proposal itself.

I have a bad feeling that the foundation will not hold it’s promise not to support any mandatory dev fund, but i hope i’am wrong.

Are there any protocols from the foundation’s side about the negotiations? I’am raising the question about the Zcash Trademark as in my opinion it’s an very important factor for the whole future of Zcash and not only for the funding proposals where it actually should place a role as well after nothing is finished yet.

Actually yes, that’s the case. And i fully share for months now the points @sarang made in his post here: Lack of information about future funding

It’s more than strange to ask for proposals, even try to push them without having concrete numbers, details, whatever for what the funds are used for, just as an example.

That would solely be ECC’s monthly operating costs (as explained at Zcon1), and thus nothing to do with any Zcash Foundation funding.

Thank you veyr much for clarifying this. I thought it’s like this as well, just wanted to be sure as it’s the main part of most proposals thinking about the split.

Any chance i get answers to the rest of the questions as well please? I would really appreciate if all question get an answer/feedback and not just some. Again, thx in advance :slight_smile:

I am speaking for myself (I am an engineer at ECC, not an official representative of their position), so I will only restate what information is already available (like above). With that in mind:

The transparency report tells you that this was 62% of monthly operating costs in the second half of 2018, which is $434k. Thus a reasonable guess would be that of the 1M figure, somewhere between $620k and $730k of that would be wages (62% assuming same ratio, 73% assuming the increased budget was solely used on wages). Neither figure will be accurate, of course.

Given that a full 4 pages of the 2018H2 transparency report detailed this information, I think it’s reasonable to assume that future reports would as well.

See @nathan-at-least’s talk at Zcon1 for targets covering the first couple of years.

Reminding you again that I am speaking for myself, not ECC: I agree with the Foundation’s position on this. There may be some ZIPs that turn out to be technically unworkable, and others that are incompatible with each other. Beyond that, all current proposals are collected in a central thread (thanks @sonya for maintaining it!) that is easy for anyone with a vested interest in the outcome to find and follow.

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I wasn’t able to find any information on the transparency report on how many employess this applies. The number of employees here is a critical part in my opinion, hence it’s part of the question.

My personal opinion is that the 2018 Q2 gives some transparency or limited, but not full transparency. Let’s try with a different formulation: Will beyond 2020 transparency reports have the same format or will they be more transparent and detailed on how funds are used?

I would prefer a black on white answer, as these targets are for sure somewhere on the internally roadmap at the ECC, maybe even with expected costs for these targets it shouldn’t be too hard to copy & paste them and make them available for the whole community in the related topic instead of “forcing” every reader of the proposals to watch hours of videos. Just an idea how to make things easier, more transparent, more accessable for the average user that is interested in the future road map of the ECC and the costs/funding needed for these.

The technically part is not what i had in mind after it gets into a ZIP proccess, hence i wrote favouring and advertising. I should have added upfront maybe? But i’am pretty sure everybody got the idea i have.
My personal position here is still the same as some weeks ago, that every proposal should be threated the same and none of them should be showcased, advertised, preferred on social media, etc. until they enter the technical zip process and even than they should be threated as equal as possible in my opinion. IF a given proposal is technically not doable than it’s just like that. But until it enters that state i really tink fairness and fair play towards every proposal should be granted. Expecially by NOT advertising, showcasing, preferring, etc. upfront given proposals.

Just bumping the questions again as there are still a lot of them that require some official statement/input/clarification/numbers please.

Those are all fair questions, and i do believe that $1.1 million per month of funding is a little much given we already have a working product and will surely cause massive pressure do the downside and will only require more ZEC to cover that amount. At first i was on board for a dev fund renewal and keeping Zooko’s team close. But this week has given me lots of second guessings. Not to mention the blog that was released yesterday by ECC pretty much gave me the impression that “Either you grant us funding, or we’re out”…And according to the very same blog, no you wont be receiving answers to those questions. It’s basically “their way or the highway”, from what i gathered.

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Another ~10 days past without any answers … Just a reminder that this proposal hardly can get further and fine tuned without answers.

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@daira and I made an initial review pass over this PreZIP. This is not a formal part of the proposal process (in particular, @daira is not acting in hir role as ZIP editor); this is just a joint comment between @daira and myself on the current state of the PreZIP.


Clarify with a “Specification” heading that this is the specification. Do keep the fact that the specification is expressed as a delta on the current FR specification.

This needs to be updated to reflect the ZF:ECC split being introduced into the proposal (as ZF no longer receives all funds).

This bullet point (including its lettered sub-points) cannot be in the ZIP, as it is purely personal opinion (as stated).

This needs to be updated with the correct figure post-dilution, and should be the sum of the ECC and “Additional ECC Employee Compensation” sections.

The first sentence of this is suitable for the rationale; the rest (including sub-points) is unnecessary for the ZIP.

We’ve treated everything below here as not intended to go into the ZIP.

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@sonya , i’am withdrawing this proposal, please remove it from the list at: Future of Zcash dev funding — megathread / everything in one place

Reasoning:

  • Only half of the questions made have been answered. Without the questions answerd i feel i’am not able to adjust, fine-tune or improve this proposal.

  • It was a proposal made to go strict with foundation guidelines and to use only opt-in. As in my opinion it’s clear by today that opt-in is no more a real requirement this proposal lost more or less it’s propose.

  • This proposal does not seem to get enough community support either so it would be only a waste of time and votes to push it further.

  • I think the “votes” this proposal might get maybe are suited better for a proposal that has actually a chance to be choosen. Having in mind the overwhelming efford the ECC does to push their 20% favourite proposals it doesn’t make sense to have proposals that do not advocate a 20% dev fund splitting that much into various proposals that have minimal chances versus the proposals that are showcased by the ECC and it’s employees/affilates.

  • Therefore and due the above described personal arguments i choose to withdraw this proposal in favour of @Blocktown & @JamesTodaroMD proposal at Blocktown Development Fund Proposal: 10% to a 2-of-3 multisig with community involved Third Entity which seems for me personally the only one opposing a new 20% dev fund that has a chance.

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Thank you for the effort in creating this proposal / pre ZIP, Alex. I’ll update the lists.

If someone else wants to become the advocate, feel free to speak up.

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Due the above reasons i strongly hope and advice that this proposal does not get any other advocate and it’s not my intention and hope that someone else is going to advocate it!

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