Future of Zcash dev funding — megathread / everything in one place

ECC was a commercial organization and issued a coin to support its work, i.e. a product for investors, then a fund appeared and said that now this product is no longer investment, it turns out that the same product changed its status dramatically, initially the functionality was for receiving funds.
The correct observation is that with a change in the status of the fund in working with the network, the product must either be withdrawn from publicly accessible exchanges or the purpose of the fund must be different.
As reflected in the proposal of the fund and the need for a year of financing, the work of ECC, now it is more than 13 million dollars a year, and the fund needs 2 times less to cover needs, taking into account development.
For me, again, contradictions in the statements. Either you release a product for investment and receive funds for yourself (development), or you do not receive investments from this product and then you are a fund, there is no difference on the exchange when buying zcash and other cryptocurrencies, while the goal as you described them is different (this non-voluntary donation)
In other words, even if you receive funds in zec you cannot sell them, you can exchange them for funds at whatever rate you want but not on common platforms and having previously notified that the exchange is a donation.
Or do I not understand something?

I don’t think I understand the question. The functionality of ZEC will remain the same.

Nothing fundamentally changed when receiving funds through a coin for the organization.
I’m not talking about opportunities like cryptocurrencies, I’m talking about the goal for the fund and the company to receive funds through selling it on the market.I don’t understand this, I asked this question about the asset before, I consider it a product or an asset of the company, the company develops and sells it, when you buy 100% of the funds will be in the form of support, but this is not voluntary, the buyer does not understand what coins he bought, miners or companies, so this is equal to a product on the market, the buyer does not understand which part of the price the company goes to the developer for development and what is the seller’s payoff, but the fund and the company say that the price is not a priority, I don’t understand this point, either this product or this well rtvovanie but donations have little non-profit organization, we still do not sell anything, and you are selling.

This is not accurate. The ECC does not and cannot “issue” Zcash. Furthermore, people that purchase Zcash are not investing or purchasing shares of ECC.

The network and miners choose to run the software which has an allowance of ZEC for future development.

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If the ECC does not release how it receives the part from the block, ECC released 100% zec in the form of software, which during its work sends part of the total to the financed address, while observing the emission. This can be changed, but now it is.
Now the coin is moving in support of another organization, but it’s the same coin, and its functions are the same, making a profit for the company, if you talk about the purpose of the coin in the form of Internet money, then this goal is indirect, it can be without a sale, it is a sale with receipt funds is the main, and this is direct investment as for me. Trying to beat the situation does not change the essence, issue-sale-money.
So buyers are investors who knowingly or not but invest in development, and not voluntary donations for a non-profit organization, where I’m wrong?

When are you getting this information that it’s moving in support of another organization?

You are trying to fit Zcash into a business investment model and it just doesn’t work that way. By buying/selling/using Zcash you are not investing in a company or organization. Zcash is Zcash, it’s value is in its utility as internet money which protects the privacy of its users.

If ECC had issued a Token (ICO) then that Token could represent shares of the company and it would be subject to SEC regulations as a security. ECC did not do this, they have a portion of the ZEC from each block sent to addresses for later use to support the network. If the market choose to make ZEC worthless then the ZEC they received is also worthless.

If you buy Zcash at an exchange as an “investment” and not for its “use” then you are speculating on the future price of Zcash. The ECC and Zcash Foundation are not supporting the software for speculation they are supporting it for it’s utility as a medium of exchange and a store of value

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And a store of value! I think private SoV and private MoE are both important, and luckily Zcash can do both :slight_smile:

The Foundation doesn’t have any objection to speculators, but their desires are not a priority. Their financial interests are their own responsibility.

That said, what speculators want can definitely overlap with our mission! For example, speculators want demand for ZEC to increase, and so does ZF (since that is what adoption looks like), but not for the exact same reasons.

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It’s not true, buying I finance the organization, no? We don’t know whose coins I buy, if I am not a speculator with the goal of making a profit, it turns out I’m not just buying coins, I keep the value at the level and selling company makes a profit, no?
You reason from the point of view convenient for the company and the fund, but it is not the only one, my point of view does not contradict reality, if regulators do not pay attention, it does not mean that the company is engaged in actions that do not contradict the restrictions for voluntary donations.
Coin issue occurred, is there any benefit from coin issue?
We are talking here not about a business model, but about the lack of information about the donation when buying coins, it is nowhere to be seen. Founders ’reward and a further reward for development is a tax, but the company does not issue money, if zec has value, how do you say how the company has Internet tax?
In other words, ZCASH Internet money with a tax of 20% in favor of a non-profit organization (currently commercial). Is everything right? Decentralization, which is stated in the description, which manifests itself when too many inconsistencies are visible to me, I am very upset that the company that says there is no benefit receives it, while giving up liability through the fund in the future.
If I buy or sell, I do not invest, it is possible only if there is no tax, otherwise the remaining 20% ​​goes where it is clear, provided that all the coins mined were sold and bought.
Or in other words, when selling coins to an organization that was not obtained through extraction, these are not voluntary donations, the fund does not have the right to do this, like a commercial organization, can lawyers explain where the fund will receive income after 2020?

The interest of the fund and the company in obtaining funds for the development of the coin (budget), because there is no future without a budget, everything, you don’t need to talk nonsense about the fact that Internet money and so on, ZCASH is a tool for getting a budget, who else is a market speculator is not clear At the same time, the fund and the company are not an investor, because they do not risk anything.
Therefore, I wrote in another topic that, after the statements and the fact that zec sal occurs with a 100% speculative coin, investors leave it, which means that the coin is only suitable for profit as a company and fund, as well as buyers and sellers, this of course does not prevent it from becoming online money, but the essence of the coin is now only profit for players in the market.
This is good for me, I can sell more expensive, but I invested precisely in the development of the idea.
Therefore, based on the organization’s goals, to develop Internet money at any price and not interested in a unit price when financing, it is necessary to adopt a financing model for the future period with a maximum percentage, ideally still 100% of the balance of the coins, this will give some time for financing, otherwise The 20% that are now and which will be equivalent to 10% of the current funding will not be enough with a further decrease. But these 100% will not need to be sold on exchanges but distributed in exchange for value in the form of money, in order to preserve the meaning of the fund. I think it will be fairer than receiving 20% ​​as a gift and saying that this is not an investment and the price is not interesting to us, therefore we will not develop products that will make sense to the coin from the point of view of investment.

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Readed the whole Zfoundation Statement carefully several times. It’s a better one than i have awaited to be honest, thumbs up. But i think there are still some things missing and room for improvement and clarification.

Our timeline for selecting proposals is still informed by the ECC’s Network Upgrade Pipeline. Here are the relevant NU4 deadlines:

  • ZIP draft submission deadline — Aug 31, 2019
  • Feature selection done — October 31, 2019
  • Testnet beta code release — March 31, 2020
  • Testnet activation — May 31, 2020
  • Mainnet activation — October 2020

Current and future proposals will continue to be debated on the Zcash Community Forum until advocates open pull requests in the ZIP repo by August 31 .

The first proposal was written on 23th June if i remember right. The foundation’s guide is coming nearly 2 months later and the final draft submission deadline is just in 3 weeks. I could imagine this is not enough time for people that might make a new proposal based on the new released Foundations guideline. Maybe a moving the deadlines with 1 month would be sufficient and enough to allow all parties involved, including proposal makers to make new proposals and/or adjust their current proposals to the new circumstances that arised with the Foundations suggestion and guideline.

Here are the acceptable options, in order of the Foundation’s preference:

  1. Transition from the current Founder’s Reward to a compulsory Zcash dev fund. For-profit entities would not be eligible recipients of the dev fund. Funds would be disbursed equally across recipient nonprofits, all required to adhere to transparency and accountability requirements.
  2. Transition from the Founder’s Reward to an opt-in Zcash dev fund, where miners choose to distribute the funds to recipient organizations, or burn the funds forever.
  3. Allow the Founder’s Reward to sunset at its current expiry period, without extension or creation of any new model.

About 1.) This will be interesting to see how it works out. 50/50 ECC/Foundation dev fund split, if i understand the meaning correctly.
If we take $50 base price for a simple calculation it would result it being needed around 20% for the ECC (their request) which would result. IF such proposal being made tha garantees that the ECC gets what they need/want it must be a 40% block reward proposal than. Just in theory.
The other option would be IF a 20% reward is the maximum for a new dev fund the ECC would have to cut down costs somehow to around $650k per month. Half of what they desire.

About 2: I have my problems naming something opt-in where someone is mandatory forced to do something, no matter what it is.
Definition of opt-in: the fact of choosing to take part in an activity, arrangement, etc. rather than being forced to take part.
Definition of opt-out: a situation in which some members of a group choose not to join or be involved in an activity
Both don’t fit somehow and in my opinion are missleading. Just giving 2 options on a mandatory funding exclude automaticly opt-in/opt-out in my opinion and understanding. It would be like: Give us $10 or throw them away/burn them. As stated in previous posts allready several times i have my doubts that such mechanism can be seen as a charitable donation which the 503c foundation needs it to be. Has there be taken legal advice from an expert?

About 3.) Not much to comment here, just the initial promise.

We still consider an opt-in, miner-driven dev fund to be acceptable. However, we have concluded that a “miners’ choice” approach entails significant hazards that would be difficult to mitigate.

While this is entirely true that is the case with all opt-in/opt-out mechansims. IF someone is relying on opt-in and/or donations there is just no other way in my opinion to be exposed to good faith IF someone donates/opt-in or not. After the ECC and foundation seem to have choosen ONLY the miner block rewards as a possible funding source it’s just obvious that this brings disadvantages and dangers as well with it. Strange enough no other income sources are explored that possibly reduce such risk.

We believe strongly in the notion of specific pre-commitments to accountability, for both the Foundation and any other organization that receives funds. More discussion needs to be had here, but at a bare minimum we suggest the following measures:

  • Monthly public developer calls, detailing current technical roadmap and updates
  • Quarterly tech roadmap reports and updates
  • Quarterly financial reports, detailing spending levels/burn rate and cash/ZEC on hand
  • A yearly, audited financial report akin to the Form 990 for US-based nonprofits
  • Yearly reviews of organization performance, along the lines of our “State of the Zcash Foundation” report

Regardless of the exact measures, the Zcash Foundation is committed to evaluating each organization’s commitment to the accountability requirements set forth by any compulsory dev fund. We equally commit to conducting our own yearly reviews of each recipient organization, to determine whether it has met or failed the precommited accountability requirements and to inform future funding allocation decisions.

In my opinion this is a good approach and the very least someone could await while discussing and proposong further voluntary/mandatory funding from the community or part of it.
Especially the pre-commitments to accountability should include a lot more bevor proposals are made or enter a the draft process and not AFTER proposals are made.
There are several reasons why this should be even a must:

  • it will show good faith and readyness for maximum transparency.
  • it will build up trust
  • a new dev funding should be build up even on current transparency & accountability. With a lot of questions still unanswered and a lot of uncertainity there should be a big move from the ECC giving answers and certainity to a lot of questions bevor proposals go into any further stage.
    My suggestion: The foundation could make a seperate topic with question & concerns with reasoning the community can ask. The foundation than internally discusses these and makes a questionnaire based on these questions & concerns they decide to be valid or are important to the Zcash future discussion/proposals. It’s obviously more than unlikely that we as users spread all over get important and direct answers on several matters, hence the foundation could act here as a mouthpiece.

If ECC is to accept community funds, we ask the company to reorganize as a nonprofit entity, thus formalizing its commitment to transparency and accountability. We think doing so would bolster public confidence, ultimately helping the ECC team continue its amazing work to build a privacy-focused protocol for the public good.

In my opinion this is the best move possible. I was thinking about the same some time ago but than again thought it’s something impossible to ask for. It would have given a lot more of confidence if the ECC itself would have done and offered such move.
It will be interesting to see what the ECC’s response will be to this one, even more as their response is important to the proposals makers as well.

In 2020, we expect the Foundation to have 10 full-time staff
We expect to spend roughly $3.7mm a year, with the largest cost being $2mm for wages.

If my simple calculation is true this makes an average wage of $16.666 per month, right? As i’am a non US guy i have no idea if this is low or high no matter it sounds more than high to me personally and i guess for most europeans as well. However, wouldn’t it make sense to outsource some tasks to make some economics even within the foundation?

Reviving the Community Advisory Panel

We will revive last year’s Community Advisory Panel and request old members to both:

  • invite one new member of their choosing
  • vote on the proposals (once they have been submitted as ZIPs).

Is the Community Advisory Panel different from the Community Governance Panel? If yes, who are it’s members?

… if there’s a technical or economic reason to break a promise, the onus is on the proposer to explain why it’s worth it, and to cultivate broad, overwhelming consensus as best as they can.

What is the definition of overwhelming consensus? 75%, 66%? 51% for example doesn’t sound like overwhelming consensus and in my books overwhelming begins at very least at 66% but that’s just my opinion and view, hence the question, what does the foundation consider as overwhelming. This might be know a trivial question but could be a more than important one later, hence i think it’s a good idea making it clear upfront to avoid later possible of being accused.

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It would be nice if someone listened to you except the community?
Everyone who writes criticism here or writes comments with uncomfortable questions for their own sake, those who offer to continue financing and preferably not control the process at all find feedback from organizations.

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Excellent questions.

To be clear, ZF has changed its previous stance that an opt-in mechanism is absolutely required. (Yes, Alex, you deduced that in advance!)

Excerpt from the recent guidance statement:

The problem with opting in

We still consider an opt-in, miner-driven dev fund to be acceptable. However, we have concluded that a “miners’ choice” approach entails significant hazards that would be difficult to mitigate.

If most miners only have a short-term interest in Zcash, their incentive could be to burn ZEC every time, in order to decrease the available supply and (theoretically) raise the price via deflation. On the other hand, the effect would be diffused over all coinholders, not just the miner of each block.

Another opt-in approach might be user-driven, where those sending transactions across the Zcash network are able to make the “burn or distribute” choice. However, the technical design of such an approach continues to elude us, and presents a major engineering challenge; too risky to be a viable choice for now. Even a miner-driven approach adds some development complexity, although we believe it to be more manageable.

The Zcash Foundation board and executives realize that our current position has evolved from what was written on the forum two months ago. Since late May, discussions among board members, employees, and others have convinced us that “miners’ choice” is not ideal. We believe that relying on miners’ choice has a greater chance of endangering Zcash and the Foundation’s mission.

I hope that clarifies things.

Yes, that translates to an average $200,000 salary. Given the market rate for high-end tech talent in the United States — which is, unfortunately, the deepest talent pool for us — personally, I think it’s quite reasonable.

On the other hand, prospective budget might include the cost of benefits — healthcare, providing a 401k, etc. @acityinohio, can you speak to that?

It’s the same. We’re using a name that describes the panel’s level of power better.

Maybe we could open up applications again? @acityinohio will have to decide that.

That’s another question that I hope Josh can respond to!

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you know what’s funny? if this public discussion and your recent statements as zfnd comm mgr (despite they’re personal) is not one sophisticated hoax to scare away all remaining retail investors and long-side knife catching speculators (ones among them that bother to read, not just mindlessly trade charts and price) … then maybe i dont understand something.

edit: should have placed a smiley at the end of this comment. its half serious, as all my observations.

Actually i previously, some months ago, thought the very same than you on an alomost same occasion and i attacked Sonya a bit rude for that, for what i later excused myself personally after i realized that the foundations work shouldn’t be the just a 2nd ECC in a non profit form.

After thinking about it it’s even more than good, that they have often a different view, different approach, different say, differerent many things as a non profit organisation. They at least balance a lot of things, or at least try a lot, especially when it comes to splitted community thoughts. This added with their transparency and accountability and openess and willigness here on the forum gives at least in part what the ECC alone is missing in my opinion.

And not everything should be about current investors, speculators and traders. We have just mined 1/3 of the whole ZEC supply, about 7.1 ZEC’s if my stats are corrects. Means 2/3 of the ZEC supply is still to find new investors, speculators, holders, believers, fans, supporters, adopters, whomever.
Means at least in my opinion, satisfying the 2/3 that have to invest in future are not less important or even more important than the current 1/3 holders/investors.

This said, i don’t hold ZEC, but i would immediatly buy a bigger amount of ZEC in the mid 6 digit US$ value IF i feel it’s a good investement for future and with a good healthy environment behind Zcash, this mainly includes the sureness that all funds are used for Zcash developement/research directly and fair, transparent and with accountability. While me and others might not be as potent as organisations like placeholder or other funds that have a position in Zcash we are still such that are interested in the remaining 2/3 of the ZEC that are to be issued over the years. Without the foundation i personally wouldn’t be here anymore and while i can imagine that for some old investors that foundation is more a burden for their investement and ROI, but it’s hope for future investement willing people and a safe harbour.

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I acknowledge your take on this issue but would also point out that there are long-term holders of ZEC who have a completely different interpretation of protocol-based funding and how the ECC and the ZF have been handling things thus far. It’s a complex situation that has obviously sparked some controversy but I think it’s worth remembering that, despite how strongly one feels about their personal opinion, there are others who - even from a very similar position - view things differently.

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Thought more about your idea. Why give miners control over funding? They dont need that much power to express their wishes.

The multisig/veto mechanism gives everything we might need & can adapt to change (ie: ZEC price)

Transparancy & public burning of coins would be a sufficient opt-out, which could be the default action.

Edit: A monthly public burn of opt-out coin from the multisig would give a regular display of compliance.

Edit: ‘Opt-out-coin’ could be ‘not-opted-in-coin’

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That’s a valid concern in my opinion, but if we begin to talk about power it should have a discussion & solution into all directions.
For example we can use the very same argument in why the ECC needs that much power after they express their wishes allready in the protocol itself and bevor that internally in ECC discussions behind more or less closed doors? Why for example should they say have another say/voting/decision in the foundations community governance panel for example?

Don’t get me wrong, i’am all for power reducing where too much power is hold, but than it should be made all together into all directions that seem to have allready a lot or too much power.

Bit of a tangent there, but thats ok.

By ‘power’ I was specifically meaning ‘the ability of miners to unilaterally divert funds’ - its unnecessary if all we want is their input.

There was a request to miners on the stakeholder vote that they select what they want using the coinbase text for a range of blocks. Cant think of a reason why the same mechanism couldnt be used for this.

Think mining has been around so long we consider miners to be the ‘hammer’ and every issue to be a ‘nail’. On the livestream daira summed it up nicely, ‘their job is just to get txns into blocks’.

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I can’t see another way how it else could be a (charitable) donation if they don’t have the power to decide what to do with it. This is not limited to miners by the way, wherever especially the foundation gets its funding from has to be affilated with a free of doing so decision.

At the very least we do a normal style vote similar to the Foundation Board vote system to determine recipients and %'s and then do that every couple of months, that gives everybody say and not just the miner, coincides with existing upgrade schedules
Some argue that it wasn’t the best set up but if we were doing it more often maybe we could work out those problems
(As far as signaling goes I mean, I think everybody doing it once every 90 days vs 1 (in like 7 or 8 realistically) person every current 2 and 1/2 minutes)