Dev fund proposals & sentiments

Hello all,

ECC is paying attention to the discussions and proposals regarding post-Founders’ Reward development funding. As a result, we’ve collected all of the main proposals & sentiments. Most of these comments have come from The future of Zcash in the year 2020.

I think the best focus for the discussion on this thread is to move towards formalized proposals for any consensus-critical changes into draft-ZIPs for NU4 (deadline August 31st). To sketch out a proposal, feel free to use what’s on this collection or other ideas that aren’t included. The main thing I’d like to avoid is duplicating what’s already being discussed in the “future of Zcash” thread.

Finally, while voting/decision mechanisms are also an important component to this, let’s keep those discussions in a separate thread to stay focused.

Here’s what was collected:

Funding proposals

Blockchain funding

Continue PoW block reward

  • Dev fund only for R&D/marketing (no early investors/Founders payouts)
  1. 10% ongoing

Simply, I would propose post-2020 halving (and end of Founders’ Reward) a new development fund is created and given 10% of the block reward. Source

  1. 20% until next halving or two

20% split between company and foundation for years 5-8. Source

  1. Ongoing with tapering effect

funding rewards should remain but taper lower with each halving. Perhaps an adjustable rewards that pegs on USD rather than ZEC. This adds several benefits in terms of the good faith of the user-base imo. Source

  1. Miner opt-in
  • Enable miners to offer their share of mining rewards to devs. So, it is up-to miners.
  • Introduce dev transaction fee (split mining fee into two), and/or give miners the power to disable it. Source
  1. ZIP-based funding

Explore ZIP based funding (in other words milestone based) with unlocking majority of funds when ZIP implementations are deployed. Authors, implementors and everyone involved should get rewards per ZIP. Rewards could be proportional to value and impact of those ZIPs. Example: “fully shielded”, “succinct blockchain” etc., All of this can be enabled by users and miners who run zcash. Makes perfect alignment b/n users, miners and dev. Source

  • Either as split between ECC and Zcash Foundation, send only to ECC or send only to Foundation for management)
  1. Foundation to collect + manage dev fund

Right, but what if the Foundation was the recipient of the new dev fund and then entered into contracts with ECC (and others) to continue research and development? I agree that “decentralization” of the dev fund recipients is of paramount importance with multiple developers/orgs so as not to be solely reliant on ECC. It’s then up to good governance to ensure the Foundation doesn’t become evil and allocates the funds strategically. Source

  1. ECC to collect + manage dev fund

I believe it’s absolutely necessary to continue funding the ECC past the expiring Founders Reward. Source

  1. Split distribution to ECC and Zcash Foundation

split between company and foundation for years 5-8. Source

Switch to a different Mining algorithm

  1. PoS

I think we would be well served in 2020 (when the FR expires) to replace the 20% Zcash Founders’ Reward subsidy with a 20% PoS subsidy. I think this is a simple solution that continues to enrich ECC/ZFND/Founders (by right of their already large stakes) but also would spread some reward to the community. Source

  1. Hybrid algorithm

Make a hybrid consensus adjustment. Either Asic-POS if Bitmain/Innosilicon agree to “fund” development or GPU-POS if they refuse. Source

Transaction fees

  1. New developer transaction fee

Introduce dev transaction fee (split mining fee into two), and/or give miners the power to disable it. Source

  1. Existing transaction fees

wouldn’t it make more sense to tie it to transaction fees? This would seem to be a lot more inline with the continued success of zec because even when the block rewards run out there will still be development funds available. Source

(Note on practicality)

The transaction fees for the last 24 hours are $91.8 from all transactions
resource: onchainfx Source

Miscellaneous

Solicit community for funding donations for 5 year runway. Start asap and if full funding is not reached by X date, all donations returned and funding reward remains. If reached, funding ends. Source

Discontinue block reward funding

Alternative funding models

  1. Community funded development via ZF Grants or similar

a.

How about a Monero FFS like scheme? The basic infrastructure is already set up and could be tweaked to facilitate it. Proposals are put up for funding and ZEC holders either fund or reject them. I find it also to be a more fair funding system for all ZEC stakeholders. Source

b.

With Github Sponsors, there is no need for any kind of dev fund. Interested parties/individuals can fund particular ZIPs they are interested/invested in. https://www.theverge.com/2019/5/23/18637344/github-sponsors-patreon-style-crowdfunding-open-source The future of Zcash in the year 2020

  1. ECC takes on VC investment to fund company activity

Sell a stake of Zcash to someone willing to invest. Source

  1. ECC creates a side business to fund development

a.

Wallets (workers) with dev fee

b.

payment in the browser (extensions) with a dev fee

c.

The company enters into a contract or organizes the exchange service zcash for currency for everyone (yes, this is an exchange or exchange), from which it receives a percentage. Source

d.

Transition to an electric coin mining company. The future of Zcash in the year 2020

General sentiments

As to the theme of the thread I am strongly in favour of creating a dev fund as a % of the block reward to fund continued development of the protocol post 2020. Source

I’m general I’m ok with extending the founder’s reward to pay for future development. Zcash seems to be considered on the leading edge of crypto privacy and that’s something I want to embrace and continue. Source

Last, in terms of funding, I think we should have a community governance panel vote to extend paying developers for their work past 2020. Source

I am a zcash believer, and i believe that zcash market cap should be top 3 by the end of 2020, which means zcash team should have enough cash out during the next bull market, and the cash should be enough for the next 5-10 years. Source

Instead of cutting PR/Marketing spend some more. Source

it should be a new development fund and explicitly not an extension of the current Fouunder’s reward. It would start only after the existing Founders reward ends. Source

I would think 100% allocation to core development might be the only way to sell this while minimizing the risk of tainting the ethos of the project. Source

What are the realistic operating costs for post founders reward? Source

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Thanks for this writeup @paige!

The volatile exchange rate is a complicating factor in deciding how much is needed and what is the best way to go about it. I’m really interested in hearing everyone’s opinions (mine haven’t fully formed).

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Thanks for doing this. I would like to clarify the quote of me below.

This was before I was reminded that there is a contract that miners get 90% of all rewards. However upon further reflection, is this block rewards or transaction rewards? Did the FR ever receive rewards from transactions? it was just coinbase, right? So this might not break that 90% rule.

I am now firmly of the opinion that I need a direct statement from the ECC and the Foundation that the 21mil cap will never be increased.

I have ideas for new verticals for the ECC, but they must be willing to invest that money into the foundation and zec development.

I really respect what has been done. But I need to know what problem I am trying to solve before I can offer solutions or opinions.

Thank you again for making this thread.

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Th founders rewards have always been directly from coinbase of new blocks, transaction fees have always gone to the miner that found the block.

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The transaction fees for the last 24 hours are $91.8 from all transactions
resource: onchainfx

Having this in mind i doubt at the current state with the current low transaction fee whatever funding could be possible. Just adding these numbers as some might think that transaction fees are 1000’s of US$ per day, that’s not the case!

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I added a note of clarification sourcing this comment regarding transaction fees.

What do people consider the best candidates for a formalized proposal and why? Expand the scope beyond what you want to see happen into perhaps the top 3 that should be considered seriously.

I agree with the ‘Miner opt-in’ proposal because I think ECC should keep the agreement of emission. Therefore, the financial support after halving should come from people’s voluntary donations.

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Another idea :-

I agree with continued dev funding from block rewards but suggest its changed in a lasting way - we really don’t want to revisit this every few years.

For example, continued dev funding from block rewards & the amount halves every XXX blocks until its XXX amount.

This would support short term & near term activities, encourage activities that increase market price, encourage ECC to develop additional revenue streams (and give them time to do so), and establishes an end-date for dev funding.

We’re also familiar with ‘things that halve’.

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If we, as a community, decide to fund development with 10% of future mining rewards post 2020 (until the next halvening) it would not be ECC breaking their agreement - it would be the community opting-in to fund future development.

In my opinion, this is why the binding mechanism for the decision is so important. I know @paige wants this thread focused on the proposal and not the decision making process, but they they seem inseparable in this situation.

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Agree. Andrew Miller put this well here: https://medium.com/@socrates1024/here-are-a-couple-of-points-on-framing-the-discussion-of-a-potential-new-dev-fund-in-zcash-c13bcbf4ed5b

My view of an ideal outcome is that ECC and Zcash Foundation agree on a process for recognizing Zcash community consensus, and in case of a fork, pledge to license the trademark to describe the community’s chosen fork. This would serve as the basis for a negotiation between the Zcash community and any potential development firm hired by the community through a new dev fund.

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Hm, this seems like an argument for the decision making process being necessarily hashed out first, not that they’re inseparable.

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If this is not the right place for this, then I will delete it or you can move it.

One key thing we need to know before any talk of where funding will come from is what the funding will be used for, and how much is needed.

A big problem I have had with zcash and following the development lists is I know what features will be included. But I don’t know what features are needed for a finial product. There seems to be lots of scope drift.

What exactly will the ECC be committing to do with the extended dev fund?

What development work is left to do on the core protocol, what is the expected cost and how long will it take? - Where can I find this information?

In addition to this, it is really important that the ECC signals what their intention is if the FR is not extended. Especially in reference to the trademark and technical issues outstanding.

Without this information we are just playing guessing games. The ECC know all of this information. They are playing a game of full information (like chess) we are stuck playing a game of partial information (like poker), and we are expected to make a financial decision based off the outcome of this game. This is not reasonable.

I am not asking them to open their books. I am expressing frustration at people trying to make a decision that ultimately is a gamble for them and not the other player.

I still have yet to see why the benefactors of the FR are not the ones to create a new one from their old FR. - have they made their money and moved on? if not why wouldn’t they want to do something like this to protect their investment… oh… I think I answered my own question :confused:

I am up for anything under the Alternative funding models and will gladly give my time to help with these. As a side note, mining fees don’t seem to be covered by any “contractual statement” that I can find. So it would be a scummy move, but technically they are up for grabs.

@root why have an algo decide to distribute everything if someone can just change it? the whole point is once it is working you cant screw with it.

If there is a vote, will I be required to dox myself and prove how zcash I am like the last one about asic’s? - Kinda antithetical to a privacy coin.

yeah but of all the BTC transferred yesterday ~8% was mining fees. Adoption seems to be key. (source a zooko post I cant now find.)

What would you like me to add to help this thread progress further?

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I prefer a 10% (maybe 15%) share of block rewards (for ECC and the foundation) until the next halving at which point we come up with a new solution. This way there is pressure to increase the price through marketing and development and it provides significant funding to do so. An ongoing percentage doesn’t provide enough incentive or enough feedback. It would be nice to tie the block rewards to a price target, but I don’t think it is very realistic.

I would like an idea of what the foundation and ECC would like to accomplish over the next 4 years and a ballpark estimate of the funding they think they need.

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I concur, but the sticking point is not the foundation it is the ECC. Look at it this way. The ECC got their first round of funding via pitching to VC’s. Why wont they release a pitch to the community?

Second, the initial recipients of the FR have absolutely no incentive for them to fund development of zcash - they are trying to push that on to the community.

The stake weighted voting idea - where more zec you have the more your vote counts is part of that. The large holders know they can just vote that the community foots the bill.

I am all in for helping the foundation. The foundation have proved that they can build on the excellent technical work done by the ECC with the help of a 3rd party.

May I please remind everyone that zcash is built on bitcoin. So spiritually the Bitcoin Genesis block is zcash’s too.

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” - that is the coinbase of the genesis block.

Why are we talking about bailing out a private company?.

I am probably not going to post further in this thread about the ECC. I will help and post about the foundation.
EDIT: I would like to make it clear that I do not hate the ECC or dislike them. I really like them! I am all for them getting additional funding just not from miners.

There are lots of opportunities for the ECC to make profits not at the expense of the initial promise.

Does anyone know the Horizen people? They are imo a success story in this regard and could have a lot to offer to this conversation.

I feel I am detracting from the spirit of this conversation and have made my feeling clear. I am really sorry about the tone of this message. I needed to get this off my chest.

I will bow out of posting in this thread to give others a chance without feeling like I am going to respond negatively to their posts. Sorry if my terse language is putting people off commenting.

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Super Quick Summary: I request advocates for proposals post each proposal as a separate individual post in the Community Collaboration -> Protocol category, including dev funding proposals and/or governance proposals.

Main Post:

Hello. I just read the initial post and skimmed everything in this thread just now. Thanks, @paige!

For these kind of proposals to succeed, we’ll need two parts:

  1. A known set of clear proposals,
  2. A legitimate decision making process.

For 1, what would help me (and I suspect others) would be to have a specific place online for each proposal, so that I can make sure I’m talking about a specific proposal when discussing it with others. As it currently stands the proposals are mixed into replies in The future of Zcash in the year 2020 and then some of those may have been further refined in later comments. This makes it difficult to know what the current best version of each proposal is.

So I request that proposals authors each make a separate post on this forum in the Community Collaboration -> Protocol category. Please come up with a descriptive title for the proposal, and begin the title with “Dev Fund Proposal” to distinguish them from other non-funding proposals. For example “Dev Fund Proposal based on transaction fees”.

Don’t worry about what a “ZIP” is or any of that process if you want to make a proposal. The community can help move proposals with support through the formal ZIP process later. Making a simple post is the first step. :wink:

Then, each proposal will have it’s own URL. Authors can edit their original post to refine the proposal. If they do that I strongly recommend documenting the changes with editorial notes at the end, for example: “Edit #4: I changed the percentages based on the discussion below.”

Discussions in each of those proposal posts can be focused primarily on that proposal, and link to alternative proposals. If someone suggests a change that the author doesn’t incorporate, then it’s always possible to create a new proposal in a new post.

As for 2, the decision process, that is a separate and hugely important topic. Again, if people want to propose a specific decision making process, I advocate creating a post in the same Community Collaboration -> Protocol category, and use a unique title which begins with “Decision Making Proposal”.

Thanks for all of your participation!

ps: ECC hasn’t announced any stance on this topic on the Forum. We will announce a position on this topic at the third day of Zcon1 in Zooko’s presentation. It will be livestreamed, and we’ll post the link to the forum.

Edit #1: I clarified why posting each proposal as a standalone thread and then editing it in-place will be easier for me to understand all of the proposals compared to the current discussion-thread approach.

Edit #2: I added the super quick summary, since I know as a reader I often just read the abstract/first paragraph. :wink:

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The ECC finally will announce a position nearly 7 months after the subject was brought up and 1 month before the deadline for NU4.

Edited out sarcastic comment because upon reflection I thought it better to ask for more time than whinge.

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@aristarchus in case you hadn’t seen the above post by Nathan, can you submit the proposal you outlined here? The future of Zcash in the year 2020

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@garethtdavies thank you for pointing me to this thread. I have just posted my dev proposal here:

@nathan-at-least I think that this more informal process is much better than going straight to ZIPs :slight_smile:

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Dev Fund, intresting question and everybody just saying block reward x% or not. Block reward is too simple i think. My option is each transaction fee 2-10%.

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Adding transaction fees % for development funding would not work well for Zcash because it would cause the fee amounts to fluctuate for every transaction. This could be a Privacy leak for users. That’s one of the reasons the default fee is set at 0.0001 ZEC for all transactions so that fees/change all look the same, random amounts would potentially stand out in blocks.

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