Inactive/For reference only:: Dev fund proposal: modified 20% combination; 40/60 ECC/choice

@chilebob pertaining to your comment on the other thread, I thought about the possibility since the ECC would be pledging half and although I kinda think it should probably stay strictly half, if the other optional amounts donated we’re highly offset then it could be up to a decision about that being adjusted accordingly as needed
But that would be between them and I don’t really know if that might be too overly complicated
OTOH it might be really good, idk
Unless a mandate came for a strict 50/50 split and the ECC honored that then the option described above is essentially baked into this proposal

So to summarize, a rule of thumb for a 50-50 split should hold with an as needed adjustment which could be applied, I think this gives greater flexibility which is always better

That’s just too much money for protocol development. I don’t think larger community or even Zcash Foundation wants that.

What ratios do think would be more appropriate? The 20% was extrapolated from the other proposal, I thought it was pretty okay but there’s no reason that we couldn’t discuss it being different

I think Zfnd & ECC play nicely together so maybe not an issue. If ECC had a funding gap & Zfnd decided to help fill it then they could. The same could apply for Parity, etc, etc.

Thinking more on reward addresses being multisig, makes governance interesting & diverse. Connects well with josh’ post.

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Assuming all parties come to an agreement about any movement of funds (which is probably a safe assumption) then putting it on chain as well makes sense

40% of which is allocated to the ECC who in turn opt to pledge half to the ZFND

I don’t understand the rationale here. Why propose this rather than 20% to ECC and 20% to ZFND?

-the ZFND and everything it does is entirely dependent on sponsorship, it is not fair to either of them (ECC or ZFND) to string them (or their employees or investors) along in the hopes of receiving a paycheck maybe

I agree r.e. salaries for future development for ZFND/ECC however it is irrefutable in my opinion that investors in ECC have been fairly compensated already via the expiring Founder’s reward and this is a non-factor.

This isn’t that clear but as I understand it’s subdividing 20% of future block rewards i.e. 40/60% of 20%, which given the halvening isn’t such a substantial increase.


The repurpose is because of the 501 3 C status and that it has to be an opt-in measure (pledge, it cannot be mandatory)
Yes MAINLY for the employees, I may have thrown investors in there for good measure and I will definitely consider changing it :+1:
And yes it is a subdivision of 20%, I’ll try to do a visual aid today


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I think I got block reward % share wrong. Ignore my comment.

There’s a philosophical reason to prefer this, as it means there’s a clear way to “defund” a non-profit that’s underperforming, which keeps it competitive. The technical 501c3 issues are trickier than that anyway though


Yeah that’s overly complicated, being able to avoid reverting the ZFNDs status certainly seems beneficial

Without putting too fine a point on it, Zcash is an incredible experiment but it only goes as far as what we the incumbant are willing to sacrifice for it

I was going to elaborate on this more but there’s really no point, that’s it

Hi, could you please follow my request on Proposal authors, please read: Help making ZIPs ?

That will help me and ZIP editors know which forum proposals we can help turn into ZIPs.

Thanks again for your contribution!


Thank you Nathan, as it stands the problem with the proposal is litigation, the system described could jeopardize the 501 c 3 status of the zcash foundation and therefore is not acceptable (we’ve been recently working out the specifications on the “all in one” thread, I only wish we could have sooner)
This system could be implemented (the hurdles are by no means insurmountable) but would very much model the funding system as it exists right now (basically identical, we change nothing) and while I do support moving slowly with governance situations I don’t think that a no op is what the community wants, some kind of growth is better…probably
And as such I will probably end up supporting one of the other similiar-ish models that does not threaten the ZFND
I hope the other authors and advocates consider these subtle nuances when working out their specifcations because it affects every single one that calls for a mandatory development fee allocated to the zcash foundation
A mandatory fee is a tax, a tax is not a charitable donation, nope

Final note, a steady stream of funding from the ECC would constitute a corporate sponsorship which is fine except zcash is not value neutral because both entities endorse it
One could effectively argue Zcash is the product and service of the ECC and since the Zcash foundation endorses “Zcash” any funding from the ECC would be considered taxable advertising and would revoke the status of the foundation



You clearly understand this better than I do. Would you please take a look over my two proposals so far and what you think the legal ramifications are, as you understand them.

It would really help me out.


Do you think I need to make adjustments?

cheers mate.

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According to the foundation’s stance they cannot accept any mandatory development fee that also pays out, even partially, to a for profit entity
They have also stated they will not support any proposal that would (enrich Founders or investors)

This implies that the foundation could possibly be the recipient of a mandatory development fee but not the ECC or any other for profit
(That’s why the opt-out measure is appealing because it could perhaps circumvent that but the question is what actually constitutes that choice, there’s a little more clarification now but it’s still kind of Grey area)
But the second option on their order of preferences does not clarify such a thing so the potential of the foundation altering their stance (unlikely) to avoid a contentious hard Fork may exist although the option to perform a hard Fork is very clearly stated along with why they feel strongly against an opt-in measure
(Assuming it were a fixed percentage any Miner who opted out of the development fee would just save the electricity while the rest of them find solutions, presumably the network difficulty would adjust to the loss of the hashrate but whether or not that’s safe I have yet to confirm)

The second thing is that the ECC cannot fund the foundation, corporate sponsorships are legal but because the foundation endorses Zcash, which could be argued to be the product and service of the ECC, it would be considered a taxable advertising donation

Its a complicated situation because ultimately the Foundation’s stance (though I agree with the reasoning behind it) doesnt represent everyone’s so a certain amount of contention is to be expected
There are more “known” unknown variables now

You can postulate hypothetical instances,
-the ECC does not become a nonprofit and the foundation does not change their stance

  • the ECC does not become a nonprofit and the foundation does change their stance

-The ECC does become a non-profit


And postulate you must

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Yes. This is our request / requirement for any mandatory dev fund, where the opt-out is “don’t run the software / don’t use Zcash,” rather than “run the software and decide not to contribute to a dev fund.”

By contrast, with a “miner’s choice” arrangement, the Zcash Foundation is comfortable with for-profit entities directly receiving protocol-based dev funding.

cc @boxalex as well

I will add this to the megathread and summary as a clarifying statement.

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:face_with_head_bandage: I feel like were circling a little bit, I need to regroup
Remember, miners choice may not necessarily be an opt-in opt-out measure, it can be mandatory and refer to where the fee actually goes
we need to Define some things more concretely

What was described above basically insinuates both, and what you described as basically not running the software for that amount of time as well
If the rewards were fixed percentage (mandatory) of each block then the choice of whether or not to participate in that development fee i.e. opt in opt out, shouldn’t affect the overall amount donated but affect the hashrate of the network, and I don’t know if that’s actually safe, it makes sense the network would adjust but idk
Is the foundation’s idea of Miner’s Choice like this or is it “I can choose to help you if and whenever I want and not if I don’t”? Because nobody is a fan of that! , ) ugh!
It also clearly states that the foundation would not support a mandatory development fee where any recipient is a for-profit entity, need clarification


@sonya would the Foundation consider the instance described above mandatory or opt in opt out?
@acityinohio also maybe Josh is handy too (haven’t heard much from the old man lately!)
All joking aside, this is that “where the choice lies” thing, at the block reward? Or at finding it?

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I am not a lawyer, so I can’t speak to the legal aspects, but I want to tell you to stop worrying about this :stuck_out_tongue:

It’s okay if ZIPs need to be changed after first being submitted, and both organizations will consult our counsel as needed. The purpose of a draft ZIP is to be clear, not perfect. In other words, when writing a ZIP, it’s practical to avoid obvious and well-understood legal issues, but no one expects you to settle the things that have to be settled by lawyers.

Block rewards to miners are distinct from a dev fund.

The rest of this comment is my personal thoughts.

There are two layers of choice.

First, users choose whether or not to use Zcash, the software and the network, at all. That choice is always in play, since people are perfectly free to stop using Zcash, or never start using Zcash in the first place.

Because of this, even a mandatory dev fund can be seen as voluntary. If you don’t want to contribute to a Zcash dev fund, but it’s an intrinsic requirement of mining or using ZEC, then you can just decide not to. You can fork Zcash, or convert to one of the competitors. No one is forced to hold ZEC or transact with it.

As @acityinohio wrote:

[U]sers are always free to fork the cryptocurrency or exit the ecosystem, although not necessarily with equal resources at their disposal. In either case, users cannot take the network effect with them — exchanges, services that integrate Zcash, stores that accept Zcash, etc. — unless they leave en masse.

If everyone knows that running Zcash software, participating in the Zcash network, means that they are contributing to a dev fund, then everyone is contributing voluntarily.

I waffled back and forth about that for a long time, but I’ve decided now. You always have the right of exit; that’s one of the radical things about cryptocurrencies.

Like @NealJayu said on Twitter:

I’ve heard the #ZcashDevFund referred to as a ‘tax’. Not remotely close and totally compatible with libertarian theory: it’s a voluntary deed-restricted community with homeowner dues which go towards the development of the community. Nobody is forced to move in, but they do. Why?

Anyway! There’s another layer of choice if miners are involved in directing where the dev fund goes. Either they decide between N recipients, or between N recipients and burning. (Or at least those are the options that people seem interested in.)

(By the way, I still haven’t decided, just personally, whether Zcash should have a protocol-based dev fund at all. But my concerns lie elsewhere. I plan to share my full personal stance on what Zcash should do — not the pros and cons of various options, but my “vote,” so to speak — after submitted ZIPs have gone through some debate.)