Dev Fund Proposal: 20% split between the ECC and the Foundation

Below I am copying my previous proposal from the The future of Zcash in the year 2020 thread. Please post your thoughts if you have ideas on how to tweak this proposal to make it better. If I make any changes to this proposal based on comments in this thread, then I will note the edits in this post.

Here is the proposal:

  • 20% split between company and foundation for years 5-8.
  • Only to be spent on research, development and adoption of zcash, no more funds to the early investors.
  • A mandate to deliver a voting system for dev funding after year 8.

link to twitter:

I want to emphasize a few points about what I have proposed:

  1. This is not the same as the original founders reward . No funds would be given to the early investors or advisers. The funds would only be used to strengthen the zcash protocol, and hopefully increase the value of our coins. :smiley:
    This means paying for researchers to continue to push forward with cutting edge privacy and cybercoin ideas, and paying for engineers to continue to maintain and improve the protocol. It also includes the important advocacy for zcash that is currently happening both in the foundation and the company (such as the 11pm meeting with a foreign country that @joshs mentioned in his post above.)

That’s it. The funds would only be used for these things that benefit the entire zcash community.

  1. With two entities receiving funds there is no single point of failure.
  2. The plan would be for this 20% “Development Fund” to continue after year 8, with a more formal process for the community to select the funding recipients.

It looks like a few people have liked this proposal but no one has commented on it yet. Maybe this is a good sign that there is no vehement opposition to this very simple plan?

We don’t have a lot of time to decide about the future of Zcash development funding, since the NU4 deadline is fast approaching. I think that missing the deadline would potentially shake investor confidence in the Zcash funding model, which is one of the best things about Zcash, imho.

My own opinion is that we should choose something very simple, similar to this plan, and continue with the discussion of more formal processes for allocating dev funding for the future. I like reading some of the more complex proposals that have been put forward, but prefer something very simple at this stage of Zcash development.

Theres 9 other proposals on this forum

There is no need to have the opposition comment, these people made other proposals and/or commented there.

But after you asked for comments i will take the time to comment yours and why i think it’s not a good proposal at all:

Why 20%? It’s mentioned that about $1 million is needed per month. At current exchange rate 20% would create about $2.5M, not even calculating a possible price jum after halving.

1.) How do you control this with a for-profit-company?
2.) What about advisors? Shares & Bonuses to employess? How much for the CEO?
3.) Just in theory, at a for-profit-company every expensive could be spent under the “camouflage” of research, adoption & development, even $100k wages/saleries for the employees, just as an example.

Any other changes or does the rest stay as weith the founders reward? Especially towards how the Founders Reward distribution was organized. Means the recpipients donate to the ECC, how would this be organized with your proposal?

And as a site note, why only “milking” the miners?
I have read your statement on twitter that the holders pay as well due inflation, but that was only true with the original founders reward. With a new dev fund/fee nothing changes for the holders, but the miners pay for further funding alone as the inflation rate won’t change with a new dev fee.

Why not a voting system for 2020 at the introduction of a possible new dev found so the community might get a vote on what should be researched, developed, done? Why such a huge period 5.5 years from today for a more or less simple voting system. I mean even the biggest shitcoins today have a voting system in place, these might be far from perfect but sounds still better than 5.5 years without a voting system at all.

Your proposal is everything else but not simple. Sure, sounds simple as you didn’t go deeper into some possible issues. Ones you get/dig deeper, like my questions/concerns it’s everything else but simple…

Actually some other proposals i have read look simpler compared to this one …

Hi @boxalex,

Thanks for the feedback. I’m curious, are you a miner? I trying to understand why you don’t like the 20% figure. As a zec holder, I actually am not worried if we ‘overpay’ slightly for research and development. I would much rather overpay for r&d and than underpay and not have enough funds for development.

From my perspective as a zec holder, I only want to pay enough to the miners to be sure that the chain is secure. Anything beyond that is, in my opinion, wasted zec that would be better spent on r&d.

If we choose to only pay 10% of block reward for r&d, then we are saying that we don’t think the chain would be sufficiently secure with 80% of block rewards going to miners. I realize chain security is on a spectrum, but I would rather double the r&d budget and decrease the chain security by only 90% to 80% block rewards.

Regarding the simplicity of my proposal, I think that the idea is to trust that the ECC and Foundation will continue to act responsibly, at least for the next 4 years. I believe they have done a pretty good job so far, don’t you?

Finally, I don’t think the build a good voting is simple at all. I would rather trust the ECC and the foundation for 4 years than have a bad voting system.

I know, I have read them and replied to some of them. I was curious why my very simple proposal wasn’t getting as much attention as the others.

Ex miner. I don’t mine anymore since December 2018.

Read my proposal and you might get an idea why i’am not for a 20% dev fee but a lower one…

Of course you are not after you are not paying for it.

I’am as well not concerned with the US government debts because i don’t pay a cent as a non-US citizien and i’am as well not worried if you guys raise your taxes even higher.

Makes me remind 2 german sayings:
1.) Trust is for fools
2.) Trusting is good, control (checking/monitoring) is better.

2 Problems i see:
1.) The less block rewards the more centralization towards low-electricity mining regions, especially China.
2.) The less mining rewards the higher an incentive to abuse the system.
3.) Why taking something away from someone that does a job (miners). Why not taking away from someone something who doesn’t do anything? Don’t get me wrong, i’am not against a dev fee, but against a mandatory dev fee towards only 1 group of the Zcash community while the other groups (traders, holders, etc. pay just … nothing…

NO, i don’t think they did all over. IF we talk about the team they have, superb, no doubt here, it’s top notch. IF we talk about cryptography, top notch as well, but that’s it.

  • I have made many posts arguing that the foundation is too laggy for my taste. I like them all, nice guys and girls, but they are lagging in my opinion.
  • About the ECC. I can’t say great job to a Founders reward design of an estiminated $300-$400M by 2020 which resulted in a temporary deficit for development and only a smaller fraction of the whole amount of the founder reward alligned directly into research & development. That’s not right!
  • The inflation design is terrible, one of the reasons this design causes even for the founders reward a huge stall.
  • Let asics mine on the network was a huge mistake. While i myself was an asic miner and with full power was pro-asic, it was a mistake, easy and simple as that, resulting in huge loss of the community.
  • The list goes on and on but i don’t want to de-rail your proposal and stop here. So in short the devs are top, everything else way less to say it diplomaticly.

You have a point here with a good voting system. But as said, trust is one thing and nobody ever should trust blind whomever. In my proposal i advocate having the foundation as the recepient which than can allocate funds to the ECC for example for given developments. That’s simply because a foundation can be controlled easier, doesn’t have the huge for-profit pressure and i think the foundation is closer to the community than the company.
It’s ok if you trust endless someone while talking about several 100’s of millions of founders reward and multi million to come dev fees, i’am for more control and transparency.

I’am not sure, but my guess is because it doesn’t get a bit deeper, or at least that’ my impression and i wouldn’t have answered/commented without having you asked for.

Could even be, some others, very similar to yours are more appealing for discussion or leave more room for improvement and “fine tuning”

Actually my personal opinion is that your proposal is just and only an extended founders reward. Same percentage, same payer (miners), again not voting, again no community involved, again no control, again just based on trust, again everything the same. Only difference it “SHOULD” be used not for advisors and for research and developement, but without a mechanism to check it you never will know if this happened or not, hence your proposal in my opinion is the nearest to just a renamed founders reward.

I think we disagree on who is paying for this. I think the ZEC holders (all of us) are paying the miners for security through inflation. The zec holders can also choose to pay for research and development. The miners are certainly not paying for anything, they are among the recipients of zec block rewards. I suspect that this fundamental point is the root of a lot of the disagreements on this forum.

Anyway, I came up this proposal thinking that maximum simplicity is important at this stage. :slight_smile:

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I payed my fair share as a miner, believe me. Not only in hardware, but also on Hodling a coin that since Asics are on the chain gets dropped like a Hot potatoes. Still willing to pay the devs, but not the way it was.

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You could as well turn it around. The miners are daily decreasing the inflation as we get day by day nearer the max. supply.
Your argument would be true IF there was an unlimited supply of ZEC, as it’s limited holders are not paying more than they did allready under the Founders reward.

Simple mathematics in my opinion. IF you disagree show me the formula how a new dev fee affects the inflation negatively for ZEC holders?
On the other side the miners have been promised after the 4th year a mining reward of 100%. IF this promise is broken they will get with your proposal only 80%, hence they are paying for it.

That’s a very bold conclusion. Just because they get cut and less block rewards is in my opinion exactly this, they pay for it.

IF someone cuts my promised reward after day X and uses this for something else i call it paying for it.

Everybody is well aware that miners are as well recipients, but again, if you cut only from one group a piece than yes, i personally think, even as a not miner, it’s not the fairest way if a promise towards them gets broken.

Now let’s make another proposal. Increase the ZEC max. supply with 20%, about 4.2M ZEC that go for development and research, and change the protocol this way. Everybody and his grandma in this case would pay for the dev fee. Feel free to combine this with a replacement from POW to POS so some extra staking bonus bucks can be made that get into R&D as well.

I guess even simpler proposal than yours doesn’t fit your taste. Let me guess, it would make you pay through devaluation your current ZEC holdings?
But should this really matter if you on the other side the funding for futher development is garanteed? And after year 8 we can of course release another batch of 1M-2M ZEC, easy and simple.

Actually thinking about it, indeed, this might be worth another proposal.

It doesn’t seem super clearly specified unless I missed but where exactly is the 20% coming from? You differentiate between holders and miners, is it a part of the block reward or is it a donation?

The 20% refers to 20 percent of the newly minted zec in each block.

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