Dev Fund Supplemental Proposal: Align Governing Council Incentives AKA the "Councilor's Block Fund" (CBF)

I think it should be “The Councilors’ Block Fund”.

“(1) Eligibility for membership in the council requires a proof-of-stake in the Zcash.”

this could be easily exploited by entities that might not have ZEC’s longterm success as their top priority.

“(2) Council membership comes with a grant from the block reward, such that the Councillor receives a fraction of each block reward”

i’d be totally against this.

imo, community governance panel should eventually be given the role as 3rd entity/strategic council. CGP needs plenty of work to become that solid 3rd party, but the skeleton’s already in place.

imo, strategic council would be starting from square one, and introduces more risk than rewards.

another reason i like the CGP as 3rd party - people at ECC/ZF can vote as individuals, rather than 1 organization = 1 vote

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I completely deleted option (1), since the strikethrough didn’t seem to be adequate.

good idea. i noticed the “and/or” in between option 1-2. assumed that 1 was still an option.

@ariannasimpson @JacobPPhillips I read your proposal with interest. I believe my proposal (see above) is synergistic with yours.

I believe your analysis of the pros-and-cons of individuals versus institutions as Councilors is insightful.

You specifically cite individual accountability as a desirable feature of a Councilor, and I agree. In a similar vein I believe that each Councilor should receive a “Councilors’ Block Fund” (CBF) payment. This recurring payment would align the Councilor’s incentives with the future value of ZEC, in a quantifiable, explicit, and public way.

It’s also important to note that this mechanism addresses a valid critique @ttmariemia made in her response to the ASP proposal. In my view she’s completely correct that the Council MUST be funded. I believe that this is a feature of the Council, and that said funding should be in ZEC futures as a fraction of the Block Fund.
(Not least because of the concrete well-tested mechanism for this funding.)

Thanks for your time!
–Za

P.S. – As should be obvious from the name, the proposal was originally made in reference to @avichal 's proposal. It goes without saying that I believe that TCBF is synergistic with that proposal as well.

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I appreciate the sentiments here, about incentive alignment. I also think it’s appropriate to compensate people for the substantial investment of effort.

However, I would certainly hope that in any body that governs critical resources for the future of Zcash, at least some of the Councilors would be motivated primarily by principles and ideology rather than personal gain. And such people may very well have other engagements and obligations that preclude compensation or substantial personal economic interest, or may just prefer avoid the associated legal/tax risks.

To see this, we need look no further than Boards of Directors of the Zcash Foundation and of the Electric Coin Company, and the superbly qualified board members serving there. I believe that some of these would not be able to serve, if they were required to hold a personal financial stake.

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The inherent issue with the proposals that include a new Council is that we have no good voting mechanism for electing Councilors. We can’t even decide who’s supposed to vote, let alone how their eligibility and vote are verified. The closest we have are ideas for privacy-preserving wealth-weighted voting (which would anyway take more time to implement than we have for the Dev Fund decision), and the Community Governance Panel (which is too loose to be binding, and which is already used by the Zcash Foundation so what’s the point of cloning it).

This difficulty is not a coincidence. It is not a failure of motivation or of execution. This is trying to solve the general problem of global decentralized governance. It’s too hard! Bitcoin managed to solve a sliver of that problem, for the specific case of consensus on just listing records in a ledger, and this is being hailed as the breakthrough of the decade. Will the Zcash community miraculously conjure a global and completely decentralized (and yet effective and manipulation-resistant!) governance mechanism for deciding arbitrary questions?

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Thanks for the thoughtful feedback!

I hadn’t considered the possibility of some parties being completely blocked from participation.

I hope, and indeed expect, that all Councilors would be “motivated primarily by principles and ideology”. I view the CBF, as a complement to those mechanisms.

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I completely agree with this sentiment @tromer and have tried to express this in multiple ways but this really just hit the nail on the head.

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I would hope this, but I would not build a system of governance around this. There should always be meaningful incentive-alignment keeping principles, ideology, and reality in check- and aligned.

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It sounds like we’re in agreement!

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Indeed.

I draw your attention to the proposal you linked

No need for a supplemental proposal – payment is already included in @avichal 's proposal.

Back to your original point though, this is a frustrating component of how the ZF and other non-profits work in the US – board members aren’t supposed to be paid :man_shrugging:

Thanks! Was that there all along?!

As far as I know! I only noticed because I ran into a similar concern with my proposal, but couldn’t find a workaround without a third entity.

FWIW, I view this as a feature not a bug. In fact in many nonprofits board members are expected to either a) donate or b) if they can’t donate, contribute to large-scale fundraising efforts, which is another way of having “skin in the game” for a mission-driven organization.

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That sounds nice but the reality is something different. Often nonprofit board members reap other benefits through the affiliation: connections, social status, political influence, etc. They get paid.

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I know you do, and I love that!.. but as a crypto system designer I want to replace good intentions with bonding, vesting, and other weird incentive mechanisms :stuck_out_tongue:

This would be great for the ZF down the road, though it does rankle of “must have previous wealth to participate”.

I’ve seen this as well, but both of these visions are extreme. I hope the middle ground is most common.

That said, if being on the ZF board becomes that sort of influential non-profit board seat, I think we’ll have done something right :laughing:

EDIT: Too many emojis, sheesh.

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I don’t think this is contradictory to a board member donating or contributing to large-scale fundraising efforts? And if they’re paid in status/affiliation (particularly since they won’t be actively involved in day-to-day operation of a nonprofit) then the point stands that they shouldn’t be given financial compensation.

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Yup I agree, which is why it’s not a requirement (informal or otherwise) for anyone on the board today. But donating their time to fundraising is a reasonable expectation IMHO.

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