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

I’am pretty sure they are too choices as mining Zcash initially has nothing to do with the foundation. The opt-in feature than gives a voluntary donation choice. In case the choice is NOT used than the miner has absolutly nothing in common with the foundation at all. Just my reasoning here.

In my post i had not in mind the founders but the foundations exemptation status as a given % is needed to come from the wider public… At least that is what i got out of the articles i readed.

Actually i could bet it’s up to the amount. Not sure about the US but here in europe a lot of foundations have memebers that collect smaller amounts of money in cans, cases and whatever not. I’am pretty sure it’s the same in the US and that smaller amounts don’t need to have personal information as the donor anyway isn’t going to have them mentioned as a tax reduction “item”.
I’am not sure what the threshold for this is, could be $100, $500 or even $5000 per donation. Pretty sure someone from the foundation has accurate information for this.
If you think about this it makes perfect sense. Imagine the Red Cross to make a declaration with everybody that donated >20 cents over a year. I guess that would fill a paper as long as to the moon and back to earth, lol.

Due the last response i doubt this will hold true. IF i’am correct that smaller amounts do not have to be reported than this would solve the problem automaticly it’s own. IF the foundation gets their part automaticly after each block is mined than this would be smaller parts of small value all over.
In case there is another setup/design planned or possible or i’am wrong with my assumption that even very small amounts need the donor information than the next plausible thing would be the mining pools information as these are that send actually the “donation” or “part of the block reward” that would go to the foundation, right?

I didn’t check if there is currently somewhere such design where part of the mining block reward goes to a US foundation, but i think it’s more than possible that there are allready such designs and projects.
Not enough time these days to check my own IF a POW currency has a foundation that receives funding directly from block rewards, maybe someone else can check…

Its interesting that the 501c3 status could be changed as part of this process, hadn’t considered that as an option (might not be).

If removing that makes it easy for funds to be channelled from block rewards then why not?

Maybe minimal funding streams from every block to ZF/ECC/??? and the balance to a multisig address so it can be allocated if many parties agree.

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I doubt it’s even needed. The current status seems to be perfect for that if i don’t miss something:

If i read it correctly the important part is:
(5) the total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors,

Than the defininition of “substantial contributor”:
A substantial contributor is any individual or entity, other than a government agency or public charity that is publicly supported, whose total contributions over the five-year period exceed 2% of total support.

Like I said above it may not even be an issue to be concerned about, the possibility of the foundation reverting its status to a private organization is up to the foundation, I’m not really too hip on that so until theres some actual legal guidance the discussion should probably move to other proposals

Sorry about that, I just fixed all the links: actually fix links this time · ZcashFoundation/zfnd@033c8a9 · GitHub

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Thx, any chance we get the 2018 Form 990 accessable there these days?

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I’ll ask Antonie and get back to you.

A 501 c 3 can only be the recipient of charitable contributions, anything mandatory would be considered a tax and is not legal hence the funnel (Im gonna call it the “sieve”)
You should look into your own tax concerns as far as identifying information from Individual miners is concerned were the foundation a choice development fee recipient
Since the 12% choice fee, although a choice, is still technically mandatoryand there may be complications with the ZFND being a recipient of that as well

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I’m not a lawyer, but I don’t think it would be considered compulsory, since mining Zcash is a voluntary choice.

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Yes but the “chioice” option would be mandatory and could be construed as a tax
You hit the nail on head, I’ve been asking around too, I wonder if anyones ever had this particular problembefore

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I am not a lawyer either but I don’t buy into the whole choice thing. Ponzi schemes are still a choice. As has been proven by case law in the uk Hobsons Choice is not a choice.

Hence the need for a default greed option. that way it is a true choice. idk. its too hot here. cant think properly.

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I’m just guessing at whether block rewards would be considered a donation, in legal terms, or something more like a fee. ZF will definitely talk through options with our legal counsel when evaluating ZIPs.

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I am organizing a community conversation on the future of the block reward on Sunday, August 4 at 11:00am CDT (16:00 UTC). You can learn more details at the below link:

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The problem here is trust
The funding model for the Zcash foundation as a 501 c 3 can never exist without it
A simple solution to the entire proposal is to allow the miner the option to retain that 12% aside from sending it wherever or burning it could also keep it then it becomes an actual choice but sort of defeats the whole purpose of the proposal
The only way they could ever receive any kind of mandatory funding is to do exactly like how it’s done right now, funnel it or more importantly disperse it and then trust that it gets there
I like the mpc and that trustworthy people like having trust instilled in them but until we figure out a way to get trustless this into a system that requires trust I don’t know if this one’s going to work
Frustration builds…

In my opinion it can not not be done as it was for several reasons:
1.) There won’t be anymore any founders which donate to the Foundation. That alone will allready change the funneling and dispersion absolutly.
2.) The 503 c foundation needs in principe a wider public funding. Having it funded by the ECC for example will make it a corporate foundation, at least that is what i got out after reading a day into foundation requirements, taxes ans such stuff…
3.) It doesn’t make much sense to a foundation to get funds through donations from an institution (ECC) it should be the power balance to.

While talking about trust, even a different type of trust as you have it in mind it’s interesting to notice that IF funds are allocated to the foundation it’s way less trustless than having funds in a for-profit company hence i’am advocating the reverse funneling of funds, from the foundation to the ECC.
With a foundation as the recepient of the dev fund there is less trust needed and more transparency what the funds are used for.

  • A foundation is way more transparent and hold accountable than a for-profit company
  • IF funds are funneled throught he foundation to the ECC everybody knows exactly how much funds are used for what upgrade, due the public grant process.
  • The foundation has way higher requirements for what funds can be used, including excluding conflict of interest descions, self-profiting alignement of funds and many more requirements that should ensure that funds are used what they are decided for by the community.
  • It would lead to more competition within development as more groups, companies, researchers, whatever could apply for grants or even make their own grant proposals.
  • It would involved the community way more as it’s the case right now.
  • It would lead to a more decentralized design.

I personally see only advantages and less trust needed IF the funneling goes from the foundation to the ECC.

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I agree. There are advantages to relying on the 501c3 structure specifically, since its governance and legal obligations are extremely clear and aligned with open-source values.

Incentives are everything, and 501c3s are carefully jiggered to incentivize furthering the mission rather than personal enrichment. (Self-dealing is not allowed, etc. — for example, Least Authority is a donor and consequently ZF can’t hire Least Authority for security audits. Which is fine because there are other teams that do audits.)

The public support test is also a good requirement, IMO. Eventually, you have to serve some constituency’s interests well enough that they give you money. No signal is more powerful than “I have decided, institution, that this capital is best allocated by you,” even w/r/t small amounts.

I’m not saying that 501c3s work perfectly, since perfect governance is a pipe dream, but it’s pretty damn good versus other options. For example, I don’t consider Swiss foundations to be real nonprofits unless they voluntarily operate like a USA-based public charity. “Nonprofit” is as much an operational model as it is a legal designation, and the legal designation is not enough. You have to be transparent and accountable as well.

That said, 501c3 advantages notwithstanding, the Iron Law of Institutions and the Shirky Principle still apply. You guys will have to keep asking us hard questions :slight_smile: Complacency wouldn’t be good for Zcash. I think we’re still years off from having to worry about that on an everyday basis, though. This “young and scrappy” stage has other challenges, as we all know by now.

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Hi @sonya, thanks for organizing this and the other organization you’ve been doing around these discussions!

I’ve been striving to help out in my own way, especially by posting Proposal authors, please read: Help making ZIPs and following up with each proposal author.

Could you do me a favor and edit the list of proposals and next to each one put Advocate: (or none or ??? if unknown)? This is separate from the authors, because the advocate is the person who will help see the proposal through the ZIP process. Doing this will help people see at a glance which proposals are actively being improved for the ZIP process.

I know this might feel slightly tedious, but I think it will help moving forward, because we can use the list in the original post of this thread as the canonical set of proposals, and as we go we can have an evolving status indicator next to each one. By having a canonical list that everyone refers to in different places (ex: this forum, twitter, @sgp’s live stream, etc…) it maximizes the chance that everyone across the ecosystem is talking about the same thing.

Also, I noticed that @mistfpga volunteered to be an advocate for anyone who isn’t available or interested in the ZIP process! That’s super helpful!

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I just made a big update to the top post, sorting the proposals into Active (the ones with advocates), Pending, and Inactive. Also streamlined some other information. Now updating the summary version, stand by…

(Sorry I didn’t do this yesterday like I hoped!)

Btw, if anyone hasn’t seen Sarang Noether’s thread, it’s highly relevant: Lack of information about future funding

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@zooko on Twitter:

A catalog of the major results that the Electric Coin Company has delivered to the Zcash community over the last three years: Animating Zcash - Electric Coin Company

This is in the context of the Zcash community deciding whether the “Strategic Reserve”/“Dev Fund” was a good use of funds.

PDF timeline

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