Dev fund token-holders check-point

Governance
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The dev fund is funded by ZEC holders through inflation on their tokens.

It follows that, ZEC token holders should be in charge of its spending. Currently however, ZEC holders have no input whatsoever into its governance.

Evidently, this is not an opinion shared, or at least voiced, by the majority of the forum participants. Yet, given how important I see the dev fund as part of the Zcash ecosystem, I am convinced this is one of the most important issue within the project.

Many threads are related to this matter, and it is therefore easy to unwittingly side-track all of those, which is not respectful indeed. For this reason, I am creating this thread with the intent of having this specific discussion here, rather than bits of it in multiple threads.

Today I have read an interesting (and relatively recent) message from @joshs that made me realize one important thing that has gone wrong about the dev fund, is the framing:

Currently, indeed, the “community” (comprised of people vetted by two organizations that are inherently bias given they have been receiving a large pie of the dev fund, ZF / ECC) decide how to spend those tokens. However, saying “through the protocol” is really misleading at best, but mostly it is hiding the reality expressed above and it is in some way disrespectful as it does not even mention the people that make it all possible here: ZEC holders.

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In that same message, @joshs said something quite interesting:

How do you get such leadership? Really, think about it. Who is going to select that leadership? It’s going to be again that “Zcash community” vetted by ZF, isn’t it? So, in effect, the seed starts with ZF; it’s not neutral, it’s not independent.

Indirect governance of the dev fund is of course an option (I like the hybrid approach, but different subject), but in that case, the only clean way forward is an election through, you guessed it, ZEC holders. Then anyone can apply, ZF, ECC, Mickey Mouse, Snowden, you name it.

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I am against coin-voting, as it will only reflect the will of the whales.

As I have said elsewhere, I think Zechub is the foundation where we should build our governance because it’s an independent, community-driven entity. The DAO also gives us 1 vote per person, which is the only way you can consider it democratic.

If registering for the DAO is too much effort for a potential voter, I don’t think they’ll bother juggling their coins into Ywallet either.

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Good, thank you for clarifying where you stand.

Isn’t shareholder decision power a pillar of capitalism? Are you against capitalism? In what country would you chose to live if you could easily move anywhere (that is ignoring for a second where you family is settled, you financial situation, employment, etc)? I’m curious to see how things are run over there.

Our current model of governance, as far as the dev fund is concerned, is Cronyism. ZF defines who is in the “community” and from there, power is distributed. It’s a similar enough system to what was used in the 19th century USA, same in today’s Russia, same in today’s Venezuela. The price action of ZEC for the past few years has reflected that quite well actually.

Do you know why the price of ZEC has increased recently? Do you know what major event has also happened in Zcash recently? Wink wink.

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There’s a lot more nuance to this discussion, but the TL;DR is yes.

Anyone can request access to ZecHub DAO, and it goes up for a vote for the entire DAO.

Zooko is back :smiley:

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You do realize that Zcash, like Bitcoin, are capitalistic tools at the core? Private ownership, transactions without government intervention, profit, etc. So you against capitalism, but only for governance then? Right.

As a ZEC holder, I am part of the ZEC DAO. We have very recently voted and I was thrilled about this experiment. I don’t need to be part of any other DAO, but I am happy yours exist, and I have no doubt it is useful to poll a subset of our ecosystem.

Like Zooko would ever leave Zcash. C’mon!

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Coin voting is what corporations want so they can assume total control over a project.
Imagine if Bitcoin had coin voting, all the decisions would be taken by Blackrock, Michael drunk saylor and all the centralized exchanges. Yikes…

One day it might be useful, but that day is not today when most coins sit on centralized entities.

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Zcash is currently governed quite similarly to Bitcoin, and for the most part I am fine with that.

The difference here is that Zcash has a dev fund and someone has to decide what to do with it. Capitalism or Cronyism? Easy, as far as I am concerned.

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If you take Polkadot for example, which is quite a decent project in itself, their governance model based on coin voting is a total disaster in my opinion. Crooks after crooks with a lot of coins voting themselves huge sums from the treasury for ridiculous useless things (probably with the help of some holders not looking further than a short term pump).

https://www.msn.com/en-us/money/markets/polkadot-spends-only-1m-from-treasury-after-marketing-disagreements/ar-AA1okeXJ

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  1. Polkadot has on-chain governance of the protocol itself, Zcash does not and nobody is arguing to change that.
  2. The current price of ZEC has had catastrophic performance compared to DOT since launch. But thanks for the msn.com article lol. If you know anything about governance, you know that things aren’t necessarily pretty when things just get started, that’s part of the course. Completely normal.
  3. We have a dev fund and someone has to decide what to do with it. Currently, ZF define who is part of the “community” and those people can then ask for some voting powers. That is Cronyism. If you are happy with it, that’s great. I’m not and I strongly believe the project will wake up to how wrong this is soon enough.
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This is a bit of a misnomer. There is a hard cap of 21M coins so the total amount of inflation is known and set, it’s not unlimited supply. Thereby if you are holding personally, or miners are holding, or coins are sitting in ECC, ZCG, or ZF, accounts the inflation rate is the same for all parties. One parties inflation is no different than the others.

To say that coin holders are “funding” anything is a bit of an oxymoron. The very definition of holding is not spending by not re-allocating those ZEC to be put to work to improve Zcash but instead holding the coins hoping that number go up.

So what Josh and others have said is more accurate. Previously “the community” re-allocated some of the mined ZEC to be used for things other than lining miners pockets. We voted with the best mechanism we had at the time, polling to gather social consensus.

Has that old system ran its course, sure. I think the community has spoken loud that the old system didn’t work out as well as planned, that’s why we are moving to a new system.

So where do we go from here?

I disagree with your notion that pure-coin holder voting (democratic majority-holding coins rules) is the best governance mechanism for Zcash. Not only because of the issues that Zeal wizard and others have mentioned:

But because a pure democracy is a terrible way to run anything, hence the fact that the US is more of a constitutional republic rather than a pure majority rule.

All that that’s not to say that coin holders shouldn’t have a voice. Just that they shouldn’t be the only nor the overruling voice.

Personally I like Josh’s proposal where each constituent can choose to use a mix of sentiment gathering mechanisms including polling and coin-holder voting.

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But remember if you are discontent with the way things are going in one project, you can always sell your coins and move to a project that better suits your aspirations. That’s the beauty of freedom, isn’t it?

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Oh is it? You should tell that to people holding their local currency as savings in Venezuela, Argentina, and many, many other countries, even the US, where the government keeps printing more and more money, diluting the purchasing power of holders of those assets.

The fact that the total supply of ZEC is set in time has nothing to do with this. It is about current supply and current issuance. Drop the dev fund and we either have more security or less issuance and therefore potential increase in token value quite directly affecting token holders.

Mostly correct but you’re oversimplifying badly. The “hoping that number go up” is wrong and disrespectful to ZEC holders. I’m holding because that’s what gives the project its credibility in financial terms, I’m holding because without people holding, there wouldn’t have been a dev fund that is worth anything. Actually, like many others, I’m holding simply because I believe in the Zcash movement. Maybe chose your words a bit more carefully next time.

Let’s drop the pretending and call it what it is from now on? “the people vetted by ZF”. We all know people into Zcash that ZF has zero idea about. I have my community of Zcash people, they have no governance say in anything, why? Cronyism is why.

Everybody proposes what they see as the best fit. For the sake of resiliance, because I trust my fellow ZEC holders, and because I do not believe in Cronyism, I indeed argue for token-holders governance as far as the dev fund is concerned, and Bitcoin “style” governance for the rest of the protocol.

I don’t even know why you would mention this as it cannot apply in our context. Unless we implement KYC on all participants that is?

Me too, only I like it more upside down. That is token holders carefully consider what the different parts of the community have to say and they vote after carefully considering those (or delegate to people who have the time to do this properly).

I know my opinion is not popular, currently. It’s ok, take your time, you will see it too.

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Why do you keep repeating these completely false statements?

What ZF “controls”, arguably, is who participates on this forum and on ZCAP (and I’ve never seen someone being refused in or kicked out from them unjustifiably). There is a lot more in the community outside of these two.

ZF only controls its share of the dev fund. ZCG and ECC are independent. In the last round of dev fund discussions all of the polls except ZCAP’s were outside ZF’s “control”. And they didn’t differ substantially in outcome. So if ZF is controlling everything is doing a terrible job out of it! You are saying all these things in the ZF-controlled forum, after all.

But back to the topic… There are already excellent arguments above. And it’s easy to see why it doesn’t make sense: why would a person who owns US$ 10,000,000 and has US$ 100,000 in ZEC have more say than a person who owns US$ 10,000 and has US$ 5,000 in ZEC?

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Why would they be on equal footing? One has more to lose than the other.

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Wrong. You are the ones deciding on what voting mechanism to use. And I’m being kind when I say “mechanism”; if only there was a clearly defined one. Do you want to tell me how the votes are assigned? Are the votes weighted on the size of a community? If yes, how? if no, why?

Like I said, my people using Zcash have no voice, how come? What do they have to do to have a voice, contact ZF? Be public? How come? who decided of that? It’s not in the white paper is it? All this, you have been defining. You, ZF, are effectively in control. And you, ZF, are illegitimate in this position.

You are doing great development work and everybody is thankful for it. But as far as governance is concerned, I put on my ZEC holder hat and say: Step down.

:100:

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Because the first is risking 1% of their savings while the second is risking 50%. Who has more “skin in the game”?

I’ve just presented arguments and you just ignored them. It’s clear you’re not arguing in good faith.

Indeed there is not a “clearly defined” mechanism, it has always been fuzzy and “rough consensus”. This does not mean that ZF controls it.

You already have a voice in the forums. For the recent devfund polls, each one had some qualifying criteria. The only one who ZF “controls”, ZCAP, basically requires filling a form and meeting very lax criteria about participating in the community. But of course, this is has already been pointed out to you but you refused to participate. Which is fine, but does not mean that ZF is refusing to give you a voice.

I won’t engage with you anymore in this subject to not derail the thread.

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Respectfully, is that a common practice at ZF to pull numbers out of thin air? With an understanding like that, it’s no wonder why you’re not getting my point about governance.

:mage: By the ancient magic that binds us, I command thee to release your grasp on the governance of the Dev Fund! :magic_wand:

edit: I misunderstood your point @conradoplg and my comment reflects that; sorry.

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ZCAP is not Zcash governance. It’s a ZF tool for gauging sentiment.

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so we dont really have any decentralized governance atm. just community sentiment tools.

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