Important: Deadline for ZIPs (likely Dev Fund related) that want to be activated next halvening

Governance
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In yesterday’s meeting, the ZIP editors (with additional input from Daira-Emma and Kris) discussed the timeline required to implement ZIPs (Zcash Improvement Proposals) to be activated with the next halvening. (Zcash Improvement Proposals are the mechanism through which changes and improvements to the Zcash protocol are proposed and discussed.)

The next halvening is estimated to happen around November 22th, 2024. Along with the issuance halvening, the current Dev Fund is set to expire at the same moment. Members of the community have proposed possible extensions to the Dev Fund. If a proposal is approved by the community, it will need to be implemented as a network upgrade (NU6) that would be activated at the same time as the halvening.

These things take time (implementing, auditing, activating on testnet and testing, preparing for mainnet activation, and finally activating on mainnet), so we have mapped out a timeline for this process to happen. Considering this timeline, we have determined two important deadlines.

By July 2nd, 2024, all proposals that aim to be included in NU6 must have been submitted as ZIPs, containing semantic content that is sufficiently stable to make a community decision on whether to include it in NU6.

In other words, if you have a Dev Fund proposal intended to be activated at the next halvening, you must write it up as a ZIP and submit it by July 2nd, 2024.

The ZIP could have parameters subject to community agreement, and does not need to have been fully edited. Some ZIPs might be excluded from NU6 at this point because in the assessment of node developers, they aren’t implementable in the NU6 timeframe. Any ZIP can be excluded later if showstopper security issues are found.

By July 15th, 2024, the proposed ZIPs must be finalized, and the community needs to decide which ones will be included in NU6, if any. In other words, considering that most of these will be Dev Fund proposals, the community needs to decide which Dev Fund proposal will be activated at NU6, if any.

For guidance on how to submit a ZIP, check the “ZIP Workflow” section of ZIP-0.

The ZIP editors will also hold “office hours” where you can get guidance on how to write and submit a ZIP, at the following times:

  • June 21st, 17:00 UTC
  • June 25th, 17:00 UTC

If neither of these timeslots work for you, let us know.

For reference, this is the current timeline for NU6:

  • 2024-06-21: First “NU6 ZIP office hours” session.
  • 2024-06-25: Second “NU6 ZIP office hours” session.
  • 2024-07-02: The semantic content of all NU6-candidate ZIPs is sufficiently stable to make a community decision on whether to include it in NU6.
  • 2024-07-15: Set of ZIPs for NU6 decided upon.
  • 2024-07-16: ZIP editors transition NU6 ZIPs to “Proposed” status.
  • 2024-08-08: Planned NU6 testnet activation.
  • 2024-11-22: NU6 mainnet activation (height 2,726,400).
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We’re holding the first of these office hours today in just under an hour’s time. If you want to ask us questions about a ZIP you are writing, go to the #zips channel of the Zcash R&D Discord.

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We’re holding the second of these office hours today in four hours’ time.

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A first version of Manufacturing Consent is available here:

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I have submitted a version of @skyl’s Lockbox proposal called the Hybrid Deferred Dev Fund. In this version, a 20% Dev Fund is allocated with 60% going to a lockbox and 40% to Zcash Community Grants (ZCG).

The main motivation for this proposal is to ensure that, if there is support for a Deferred Dev Fund, the ZCG program continues to receive funding. The reasons for maintaining direct funding to ZCG are: (1) ZCG lacks the financial runway that ECC and ZF have, and (2) without a Dev Fund, grant recipients would be disproportionately affected, which could hinder decentralization efforts to encourage more entities to contribute to Zcash development.

The duration of the ZIP is one year. Also, there is a requirement for ECC and ZF to work together with the community to “research and explore the establishment of a non-direct funding model….consider[ing]…possible legal and regulatory risks,” which I believe addresses concerns raised by ZF.

This proposal was largely inspired by @peacemonger’s post in the below thread and was written in collaboration with her:

Credit also goes to @skyl for his Lockbox ZIP, @daira, @str4d, and @nuttycom for their Notes on Deferred Dev Fund Proposals, and @gguy.

Below is a PDF of the draft ZIP and a link to the GitHub repository. Please review and let me know if you have any feedback.

Hybrid Deferred Dev Fund.pdf (251.4 KB)

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I have submitted two versions of the Zcash Grants Fund. The intent is to transition to a grants-based funding model starting in November rather than extend the current dev fund for another year or 2. In November this would utilise Zcash Community Grants and optionally ZecHub to allocate grants based funding. The intent is continuing to innovating this model in the future by allocating funds to other grants-based funding mechanisms such as the Zcash Funding Bloc and/or Coin Weighted Voted which need more time to be implemented and considered by the community.

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After meeting for five hours today, the ZIP editors have reviewed all of the submitted ZIPs for semantic stability. Some ZIPs require clarification or adjustment, and comments have been left on them to that effect.

ZIP authors need to respond to the non-editorial review comments on their PRs within the next day (at a minimum to comment if you require more time to respond), so that tomorrow we can start to go through the ZIPs, make edits and squash commits as we deem appropriate, and get the draft ZIPs merged so they are rendered on https://zips.z.cash.

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My desire and intent is to incentivise constant progress and innovation towards a grants based funding model now and into the future. In light of the similarities between the Zcash Grants Fund proposal and the Hybrid Deferred Dev Fund I have decided to work in collaboration with @peacemonger @skyl and @aquietinvestor on the Hybrid Deferred Dev Fund. I have subsequently closed my PRs for the Zcash Grants Fund.

Thanks to the ZIP editors for their commitment to the process. It’s inspiring :heart:.

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After discussing @joshs’s comments on the Hybrid Deferred Dev Fund proposal with @peacemonger , we have decided to make the following changes:

  1. Amend the duration from two years to one year to better align the proposal with @peacemonger’s original vision.
  2. Remove the restriction that prohibits BP/ECC and ZF from applying for ZCG grants.
  3. ZCG is administered by FPF, not ZF, which minimizes US regulatory risk. Under this proposal, no US entities are direct recipients of the Dev Fund.
  4. Additionally, @GGuy has formally withdrawn his proposals for the Zcash Grants Fund in favor of the Hybrid Deferred Dev Fund and is now listed as an Owner.

We believe that the Hybrid Deferred Dev Fund sets Zcash on the right path toward transitioning to a grants-based, non-direct funding model.

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What happens after 1 year?

(Having these funding debates seems too tiresome/ too much energy burn to have on an annual basis)

Similar to @nuttycom 's copy/ mod % of Skylar’s proposal; because I really like the Hybrid concept but not the currently defined %s or duration, I would like to make a copy/ reconfig with 4 year duration, and 17% lockbox/ 8% ZCG, with all of the other same details.

When/ how should I create that ZIP? (Should the copy be made now, or is it better to wait until all of that proposal’s edits/ clarifications are complete?)

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I believe the deadline for submitting a new proposal has passed.

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I’ve got a first draft of an alternate (Hybrid Deferred) duration/ allocation ZIP proposal here:

Title: Masters of The Universe?

4 year duration/ 17% lockbox/ 8% ZCG, with a clause for revisitation upon completion of an NDFM which can access the lockbox in less than 4 years

@conradoplg @str4d et al, given the late breaking nature of things during this holiday (USA) week/ the late breaking Lockbox support/ the late breaking/ ongoing work on the Hybrid Deferred fund proposal, can this alt-proposal also be included?

Sorry to make the excuse, I’m a parent of 2 and working a full time job - while keeping up with my free ad-hoc Zcash involvements.

The general concept for this derivative from Jason’s Hybrid Deferred Fund proposal, is that 1 year is certainly not an adequate amount of time for implementation of both the Lockbox, and the NDFM. Providing 4-years, is a more generous runway for all of the technical/ design work that is TBD, while also assuring ZCG adequate direct funding for more longer than just ~November 2025.

Background

1 year duration seems foolish because it forces the ecosystem to have to do this tiresome funding debate/ network upgrade process all over again soon (it is currently not planned for in either ZF or ECC roadmaps).

4 years gives the chance for people to commit to a longer runway for the project of the NDFM, while assuring adequate funding to ZCG along the way.

A proposal for 25% where most ZEC goes into a lockbox, that is unlikely to be accessible for 2-4 years, is effectively just an 8% Dev Fund for 1-4 years.

I think the existing polling results, because the lockbox nor Hybrid concepts didn’t exist at the time, are not necessarily reliable in presuming voter sentiment.

Also, frankly speaking, I don’t think that the Zcash voting electorate -a tiny minority of total ZEC owners/ users- should necessarily be driving such important protocol outcomes.

There are many thousands of ZEC holders/ users who were not involved in sentiment gathering.

4 years/ 17% lockbox/ 8% ZCG, in my opinion represents the Hybrid concept but it increases the runway for the NDFM project/ ZCG’s financial runway; and it reduces the energy spend of this entire funding process/ network upgrade debate from being kicked off all over again in less than 10-12 months.

I tend to think Manufacturing Consent is already dead money, but I’m completing the exercise because I do think that gauging actual 4-year direct funding support is still an important bit of info to have once this is all said and done.

I really believe the Hybrid lockbox/ ZCG direct funding is ideal, but again I feel like 1-year is not logistically the way to go about it (regardless of what the polling of the tiny Zcash cohort shows is their preference).

Schedules slip constantly in Zcash. The NDFM project is going to cause even more slips. Building a lockbox implementation will also cause schedule slips. And so to force a new funding debate in less than 12 months, which inevitably slips other work/ pulls Daira, Nutty, Strad, Conrado, Jack, Josh, et al away from other work… I just don’t understand the thinking there.

Nothing happens in the Zcash world in less than a year. And certainly not something as complex as implementing the lockbox then designing and implementing a NDFM.

This is why I’m thinking about the lockbox/ NDFM, in a long timeline. This is why I believe that a 4-year duration alternative deserves to be considered.

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Given the community-wide support for the non-direct funding model for the Dev Fund, the goal is to work one out in less than a year. Shorter time period is an incentive to not waste any time. If it’s not done within a year, the community might choose to end the dev fund completely. We need to be given that option. The extension is a compromise, not an attempt to trick the community into a direct funding model for any existing organization. According to its approval scores, ZCG still has issues to work through with the community. No matter how “tiresome,” we must be given the option to reassess its performance and reconsider the funding model. But again, the goal is to move to a N-DFM within that year. Beyond the 1-year extension, ZCG should be required to submit concrete proposals to compete for funding like everyone else.

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I am updating my proposal to include alternatives for each of the “lockbox” proposals, to eliminate redundant motivation information and improve clarity. I can include your alternative as one of these options.

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Status update

The following ZIP drafts have been merged (after the ZIP owners addressed review comments, and the ZIP editors performed initial edits for rendering correctness), and can be viewed on the ZIPs website:

The following ZIP drafts are still undergoing initial edits:

The remaining ZIP drafts submitted by the deadline were withdrawn.

One ZIP draft was submitted after the deadline, and as such has not been reviewed for semantically stablility:

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Status update

The four ZIP drafts above that were undergoing initial edits or were submitted after the deadlined, have been combined into a single ZIP draft with four alternatives:

At this time, all ZIP drafts under consideration for NU6 have been merged.

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Here is a summary of the dev-fund-related proposed ZIPs that can be possibly included by the next halving in November. Thanks @str4d for the work with the graphs (they show how the subsidy is split for each block being mined, in that proposal)

I urge everyone to read the ZIPs and to not rely solely on this summary. (Also please double check the summary)

Note that most proposals spell out that they can be terminated or modified early if the community decides to, but that should always be true for any ZIPs.

The community has until July 15th to decide which option, if any, should be implemented for the next halving in November.

Thank you to all ZIP authors, editors and contributors for all the work that went into this!

Manufacturing Consent; Re-Establishing a Dev Fund for ECC, ZF, ZCG, Qedit, FPF, and ZecHub (by NoamChom)

Year 1

  • 5%: Zcash Foundation
  • 4%: Bootstrap Project (via Zcash Foundation)
  • 4%: Zcash Community Grants (via Financial Privacy Foundation)
  • 2%: Qedit (via Financial Privacy Foundation)
  • 85%: Miners

image

Years 2-4

  • 6%: Zcash Foundation
  • 5%: Zcash Community Grants (via Financial Privacy Foundation)
  • 2%: Qedit (via Financial Privacy Foundation)
  • 1%: ZecHub (via Financial Privacy Foundation)
  • 1%: Financial Privacy Foundation
  • 85%: Miners

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Establishing a Hybrid Dev Fund for ZF, ZCG and a Dev Fund Reserve (by Jack Gavigan)

Years 1-2:

  • 8.0%: Zcash Community Grants (via Financial Privacy Foundation)
  • 6.4%: Zcash Foundation
  • 5.6%: Lockbox
  • 80.0%: Miners

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Lockbox For Decentralized Grants Allocation (perpetual 50% option) (by Skylar Saveland)

Indefinitely:

  • 50%: Lockbox
  • 50%: Miners

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Hybrid Deferred Dev Fund: Transitioning to a Non-Direct Funding Model (by Jason McGee, Peacemonger, GGuy)

Year 1:

  • 12%: Lockbox.
  • 8%: Zcash Community Grants (via Financial Privacy Foundation)
  • 80%: Miners

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Lockbox For Decentralized Grants Allocation (20% option) (by Kris Nuttycombe)

Years 1-2:

  • 20%: Lockbox
  • 80%: Miners

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Masters Of The Universe? (by NoamChom)

Years 1-4:

  • 17%: Lockbox
  • 8%: Zcash Community Grants (via Financial Privacy Foundation)
  • 75%: Miners

image

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After the halvening, what will the block reward look like? How many ZEC will be awarded per block? Miner expenses almost has to be a consideration for any of the proposals that effectively cut mining revenue in half (and worse since the halvening does that already. So a miner loses 50% of their current revenue and some proposals suggest taking even more away if I’m reading that right.

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It’s currently 3.125 ZEC. It will be 1.5625 ZEC after the halving.

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Correct generally, but keep in mind that the ecosystem already understands that ASIC ZEC PoW miners are maligned against the Zcash project. See the ZEC-BTC chart for proof.

While paying for network security (hashrate) is one important piece of a project’s well-being, keep in mind that investor success, R&D, ecosystem investment, and protocol/ infrastructure maintenance are also critical for long term sustainability.

As Skylar has called out many times, in layman’s terms, Zcash has been horribly over-paying/ over-securing its network - at the expense of many of the aforementioned.

If miner’s really cared about this project, they would be here in the forum defending themselves… but all we have is crickets (perhaps a few hobbyist miners, share opinions quite scarcely).

It’s time to stop over-spending on ASIC PoW profiteers, plain and simple.

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