Major Grants committee

I think there should be 1 seat from the ECC, 1 from ZF and 3 independent seats.The 3 independent seats being elected by the community. This way it is decentralized, but the ECC and ZF would still have input since they have the most knowledge and expertise about Zcash.

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this would be a great structure

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A basic tenet of ZIP 1012/1014 is that ECC should be able to apply for Major Grants, with an expectation that it will initially do so if coin price necessitates it and other teams aren’t up and running yet, but eventually leave the MG slice to others:

The Dev Fund should maintain the existing teams and capabilities in the Zcash ecosystem, unless and until concrete opportunities arise to create even greater value for the Zcash ecosystem.

[…]

  1. Major Grants may be issued to ECC only if there are no other proposals to perform the specified work with similar capabilities, effectiveness and cost. (The intent is that eventually ECC will not receive Major Grants.)

This seems incompatible with having an ECC representative on the Major Grants committee.

This, and similar considerations, were discussed at great length prior to the first community poll, which chose the above structure.

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Sorry, but I disagree. Your conflicts policy already requires a conflicted member not to vote on proposals where they have a conflict. The ECC rep could easily comply with that rule, while remaining active on the board for proposals in which they are not conflicted.

Boards of directors of public companies (a fortiori, private companies) routinely allow members with conflicts of interest to sit on the board, because of their valuable expertise. For years, Eric Schmidt of Google sat on Apple’s board, despite the abundant possibility for conflicts of interest. Delaware corporate law is less restrictive than the ZF’s policy, and even allows conflicted members to participate in discussions and vote upon proposals for which they have conflicts, provided that the conflict is disclosed.

Furthermore, if the logic of excluding ECC reps is applied consistently, many other potential members would be excluded. My guess is that most people who have the expertise and interest to be good members of the committee are imbricated into the ZCash ecosystem in a way that they could directly or indirectly benefit from MG grants at one time or another. If you are excluding ECC reps for that reason, you should also be excluding many others for the same reason.

Finally, if the only mechanism for holding the ZF accountable for the "MUST"s etc. in 1014 is a contract between the ECC and the ZF–which appears to me to clearly be the case according to the text of the ZIP–then the ECC cannot enforce its rights under that contract and thus hold the ZF accountable unless it is privy to everything that is happening on the MG committee. An enforcement right is nothing without access to the information needed to know when a breach claim should be raised.

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<gets comfy, puts on my personal hat for a very long rant>

On the effectiveness of the ZF as a force for decentralizing Zcash

I’m the first to admit when we miss our goals, but to say the ZF has not had a measurable impact on decentralization in the Zcash ecosystem is entirely unfair. The ZF has disbursed tens of thousands of ZEC and awarded dozens of grants; some of those grants funded wallets that are now used across the ecosystem (instead of using software directly provided by the ECC). Thanks to the ZF the ECC no longer has unilateral control over the trademark, and we moved from 1-of-1 ECC governance to 2-of-2 multisig governance. The trust and the reputation the ZF has built in this community is a big part of what enabled a productive dev fund discussion to further decentralize Zcash — I daresay we wouldn’t even be having this discussion about decentralizing Zcash on this ZF-supported forum if the ZF hadn’t stewarded this process.

Before the ZF put any effort into a consensus-compatible node implementations, there’s been only a single company focused on a consensus-compatible Zcash node: the ECC. 100% of the network still runs on that node. The ZF having an in-house consensus-compatible node implementation is exactly the sort of decentralizing force that I think the community must fight for.

The ZF originally received pledged donations from the first dev fund/founders reward/whatever we want to call it. Initially those donations were meant to be 260,000 ZEC over 4 years (we’re getting less with everyone’s dilution to fund the ECC). The new dev fund would grant the ZF 262,500 ZEC over 4 years. If I’m doing my math correctly, that’s roughly 50 more ZEC (~$3000) a month in this new reward period, which I wouldn’t categorize as a shift from “no protocol level obligations” to “significant funding from the protocol.”

And the Foundation sought what it thought was minimally acceptable; out of all the proposals that had widespread community support in the first round of sentiment collection, the ZF put its weight behind the one that minimized the amount it was receiving and maximized the amount to third parties through Major Grants. (the possible reward amounts for the Foundation were 50%, 30%, and 25%).

On Conflicts

Edit thanks to point raised by @str4d:

The more I think about it, the more I find it strange (actually, bizarre) that some are exceptionally worried about the hypothetical conflict of ZF not distributing grants because the ZF’s in-house efforts may be threatened by competition. We don’t compete, we’re a nonprofit, everything we do is for the public good. To use the most obvious example: if someone makes a good case for Zcash node software that would be better or complimentary to the ZF’s Rust efforts, why wouldn’t we fund them? Doing so would still decentralize/further our mission and Zcash. If it proves out, our engineering team has plenty of other unsolved problems we could tackle, and we could still contribute upstream.

If you still don’t believe me: we literally just funded someone to work on zcashd — which is a competitor in this framing — to the tune of ~14% of this year’s Grants/Research budget.

Meanwhile, it’s a much more straightforward (and dangerous) conflict to have ECC representatives sit on a committee where they can choose to fund themselves instead of others.

If you want to talk about disentangling influence, it’s far more important to ensure the committee/resulting governance structure is completely free of ECC influence, since without restrictions the ECC can literally give themselves money instead of third parties.

On this and your thoughts about decentralization @avichal, the omission of ECC/focus on ZF are both gravely misplaced and again, strange to me. I don’t know why there’s a blind spot there, but I’m open to hearing your perspective on why the ECC does not merit the same focus.

We’re Blowing Up the Problem Space After Months Spent Reducing It

This thread has resulted in the resurfacing of ideas already discussed and polled, and while there are opportunities for that kind of discussion, I fear people are viewing a very limited ambiguity in the community sentiment poll as an opportunity to blow up the problem space.

I wish I could pin this to the top of the thread, in giant letters, with a blink tag. A great many ideas were suggested during the eight month+ discussion of various approaches, and they were discussed at length across many mediums. We should be focused on the sentiment poll results in ZIP-1014, which showed approval of two approaches! 54 out of 88 members approved of the Foundation having independent authority, while 54 of 88 members approved of the Major Grant Committee operating exactly as specified in ZIP-1014. (with the 20 person either/or overlap) As I posted earlier:

The next step is for the Foundation to reach consensus with the ECC on what that synthesis approach looks like, if not the exact PR the Foundation outlined. If it is close to the Foundation’s approach, then by all means, we should be discussing how the selection/election/term of individual Major Grant Review Committee members and that process. But if that discussion continues, I really think it would be broadly beneficial to constrain ourselves to ZIP-1014 and the limited ambiguity the second sentiment collection poll suggested (an ambiguity of approvals no less!) as we’ve converged there as a community.

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(Speaking for myself.) Perhaps it is. How about bringing the deadline forward to the end of June 2021 (around the expected time of Zcon3)?

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(Speaking for myself.)

I appreciate that this was a personal rant, but I have to push back on your “On Conflicts” section, specifically this statement:

This is completely unsupported by the text of ZIP 1014 (emphasis mine):

  1. Major Grant Review Committee members SHALL have a one-year term and MAY sit for reelection. The Major Grant Review Committee is subject to the same conflict of interest policy that governs the ZF Board of Directors (i.e. they MUST recuse themselves when voting on proposals where they have a financial interest). [Sentence preventing ECC from being on the committee that is removed for the purposes of this hypothetical.]

On the assumption that no one is proposing to remove the general conflict restriction, it is simply false that an ECC representative on the Major Grants committee could choose to fund ECC. At most, they could choose to not fund other proposals, in the hope that the funds get applied to another proposal from ECC. Putting aside the fact that ZEC is fungible (yay privacy!), I’d argue even that scenario is not possible, due to this additional restriction in the text of ZIP 1014 (which no one is proposing be removed):

  1. Major Grants may be issued to ECC only if there are no other proposals to perform the specified work with similar capabilities, effectiveness and cost. (The intent is that eventually ECC will not receive Major Grants.)

If there are two proposals (one from ECC) for the same specified work, then it’s obvious to everyone (and especially the other members of the MG committee) that ECC has a financial interest in the second proposal. The ECC representative would need to recuse themself from both proposals, ergo an ECC representative would only be able to vote on non-ECC proposals for work that ECC was not competing for.

I agree! Which makes most of the talk about ECC conflict moot, as the ambiguous answer in question ( :drum: :drum: :bell:) does not provide any scope for an ECC representative on the MG committee. But it also means being accurate about what ZIP 1014 states.

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All fair points @str4d; I should have specified that the On Conflict section was directed at the ideas suggesting new bodies/process outside the framework of ZIP 1014.

With ZIP 1014 as written I agree that — at least to me — there are no conflict issues on either the ECC or ZF side.

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Just to clarify (not speaking for Zancas), my position is just that committee members be compensated for time and expenses, not to incentivize them with additional stake in ZEC.

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(ZIP Editor hat.)

Several people have asked for clarification on the meaning of RFC 2119 conformance keywords.

First, if you haven’t already done so, please read RFC 2119! I apologize if that sounds patronising, but the definitions of these keywords are given there and there is no other definition of them specific to the ZIP process.

That said, I will give my perspective on specification conformance in general. Enforcement, if any, of a standardized specification, is always and necessarily outside the scope of the standard itself. When RFC 2119 says, for example, that “MUST” means that “the definition is an absolute requirement of the specification”, all that it’s saying is that if you don’t follow that MUST, you’re not following the specification (and therefore the standard). Nothing more. It doesn’t mean you’re a bad person. Perhaps the specification is rubbish and you shouldn’t follow it. Perhaps it’s great but it has a critical typo. Use common sense.

Standards are not legal documents. Sometimes legal documents reference them; sometimes they are used in legal cases. But the primary reason to follow standards is social: people follow them because it’s in their interest to do so, either directly or via loss of reputation if they claim to do so and then don’t.

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That’s exactly the point I was making. There is no meaning (outside of RFC2119) attached to the MUSTs. In particular there is no enforcement regulation as far as I can see.

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(Speaking for myself.) You seem to be saying that social mechanisms are insufficient; I disagree. Legal enforcement is only ever a backup mechanism that is used if social norms fail. But the backup comes at a very high cost.

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:arrow_up:, and moreover in our case there’s enforcement via network upgrades and forking.

If a funded entity violates a “MUST” requirement of the agreed-upon ZIP, or violates a “SHOULD” requirement without adequate rationale, then this would be a very strong trigger for the rest of the community to stop that funding.

Added:
Think about it this way:

The community is the final ratifier and arbiter: it can always fork away and effectively stop any funding. But this requires coordinated action to execute, and also there are costs to worrying that it might happen out of the blue (e.g., funded entities can’t plan ahead).

So what we’re doing here is proactively coordinating this action. Forming a (non-binding but important) agreement among the broad community: “conduct within the boundaries of the ZIPs is fine and we’ll play along, but conduct contradicting the ZIPs is contentious and we would fork you away unless you convince us otherwise”.

Notably, this is true for the technical protocol ZIPs as much as for the Dev Fund ZIP!

Now obviously, it’s best to bolster things with additional mechanisms, to allow for faster action and reduce the coordination costs. This includes contractual arrangements such as the trademark agreement, as well as mechanisms such as the “restricted donation” clause of ZIP 1014, changes to operating agreements, etc. But let’s not confuse these with community’s ultimate power and authority.

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That’s the official position of the ZFND and the ECC it was established e.g during trademark negotiations.

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ZIP 1014 says that social mechanisms are insufficient. ZIP 1014 says that ECC and ZF will make IRREVOCABLE legal commitments and will enter into a contract to enforce those legal commitments against each other.

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This is not what ZIP 1014 relies on though. It expressly calls for irrevocable legal commitments and a contract to enforce them between the ZF and ECC.

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The purpose of this thread is to decide between ZF discretion on the MG slice and independence of decisionmaking on the MG slice.

It seems like representatives of the ZF respond to every attempt to flesh out what independence means and how it could be achieved by saying that the proposal for independence is outside of what remains permitted to be considered or what is undecided within 1014.

Moreover, the ZF has responded to MG governance independence standards with a new proposal to eliminate the most plausible possible source of marginal gains in independence–the possibility of representatives of the ECC sitting on the MG committee. In doing so, the ZF has cited reasoning that makes no sense and if carried to its conclusion would amount to a reductio ad absurdum, as I explained above and no one from the ZF has rebutted.

Overall, I just feel that the ZF wants to simply treat the MG funds as donations to the ZF that are earmarked for a particular purpose and not to articulate an enforceable independence standard. Since the ZF is a non-profit with ZCash’s interests in mind, it would not be unreasonable for the community to support this position. But I feel that the obstacles being proposed for why greater independence is not practicable are intellectually dishonest or stem from a “speed at all costs” mentality. In reality, much could be done to give the MG-slice-governance a reasonable amount of autonomy, but ZF seems uninterested in discussing those ideas.

Unless people want to dig in and talk about possible mechanics of MG-slice independence and the cost-benefit ratio of adopting those mechanics (vs. lesser degrees of independence, etc.), this will not be an effective discussion and option A (“The Foundation should have independent authority”) will be the real outcome, with at best window-dressing in the form of a committee that the Foundation has sole authority over.

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The Foundation originally wanted a legal trust in its first modifications to ZIP-1012. We received pushback from members of the community and the ECC on the approach, which is what led to proposed ZIP-1014. Honestly I would have pushed for it more (it came from my own ZIP!) but it was clear that the ECC had issues with a legal trust.

One such legal commitment already exists; it’s the trademark agreement. We can and will enter into others if necessary.

We are extremely interested in discussing those ideas, in the context of what the community already approved:

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I don’t think this is an acceptable reaction to criticism.
It prevents the community from speaking freely and making an educated decision.
It should not be tolerated at any point in time.

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Good questions.

Tip of the brain:

Break the compensation into 2 pieces:

(1) A living wage (e.g. time-average the value in USD over the payment period (e.g. preceding 15 days) and pay out a USD-pinned amount, e.g. $2500 worth of ZEC at that time-average price.
(2) Take the sum of ZEC payouts to the committee member (e.g. the ~ 24 payments/year) from (1) payout that amount again, 2 years after retirement from the committee.

Huh… I guess this incentivizes retirement…