Major Grants committee

(Speaking for myself, not for ECC or as a ZIP Editor.)

I disagree with this. I agree with Ian that there is a potential conflict of interest here. (Please note: pointing out a potential conflict of interest is not the same as accusations of bad faith. Quite the contrary. I have a conflict of interest on this question due to working for ECC as a possible grant recipient, for instance.)

If it were a choice between:

  • retaining the option to apply for major grants and staying quiet about the composition of the panel, or
  • weighing in on the composition of the panel and not applying for major grants.

I think we should certainly choose the former. This is especially since the level of ECC’s slice has arguably been decided on the basis that ECC would be able to apply for major grants.

8 Likes

This might be putting the cart before the horse, but to what extent is ECC’s role in Zcash development specifically delineated going forward? I wonder about a hypothetical case where ECC applies for a major grant and it’s unclear how to assess whether or not the scope of the grant work somehow falls within responsibilities the community might feel already apply to ECC as a recipient of development funds.

3 Likes

(Speaking for myself.) I would support adding wording such as:

ZF MAY compensate Major Grant Review Committee members for their time and reasonable expenses.

(or “SHOULD”, if we decide that is definitely a good idea).

1 Like

I agree that the potential for outright fraud or corruption is a low risk, and that our chief priority in deciding how MG should be governed should be to get effective use of funds and good strategic direction. This is why I liked Barbra’s comments (1, 2, 3), which emphasize that the positive effects on the ecosystem from decentralization of power accrue even when everyone involved is acting in good faith. I suspect that an independent MG governance structure would be more effective than one controlled by the Zcash Foundation.

5 Likes

Do you mean independent governance in a legal sense, or in a policy sense?

1 Like

I mean that the governance of the MG is structured so that it cannot be captured by the Foundation. Isn’t that the intent of Question 3 on the poll?

Do you believe the Foundation should have independent authority in determining Major Grants, or should there be a new Major Grant Review Committee as prescribed in this ZIP?

  • The Foundation should have independent authority in determining Major Grants
  • There should be a new Major Grant Review Committee with near-complete authority
  • Either option is acceptable
3 Likes

To be honest, I wasn’t sure precisely how to interpret “near-complete authority” in the question. It sounds like creating a separate legal entity for the grants would be very burdensome, so I wonder about whether it is possible or reasonable to establish some means of policy-based independence that is still under the legal umbrella of the Foundation and its mission and satisfies the spirit of the question.

4 Likes

It would be cool if the MG Committee could be convened at random from a pool of willing experts. Something like jury duty, maybe use a blockhash as a selector.

5 Likes

My gut response to this idea is: “Cool!”.

I think it should be “MUST”.

I think it’s a bug to specify a value-producing role that is uncompensated.

Explicit compensation does both of the following:

  1. Makes the role more inclusive (i.e. not limited to the set of elite individuals with sufficient wealth to contribute “for free”)
  2. Constrains the problem of “capture”, or misaligned incentives, by introducing a known quantified incentive
3 Likes

Hi all — the Foundation has released an official statement on the results, which I’m copying in its entirety below.


ZIP 1014 Poll Results

The combined Community Advisory Panel and forum user poll on ZIP 1014 is complete. Of 119 eligible participants, 88 voted, representing similar levels of turnout to the first community sentiment poll. You can view the results directly on Helios.

The results are quite clear (with the exception of one question). The community is clearly in favor of ZIP 1014, with ECC receiving 35% of the four-year dev fund, the Foundation receiving 25%, and Major Grants receiving 40%. There should not be a monthly Funding cap, nor a mandated volatility reserve. We are thrilled with the community’s clear approval of the ZIP with these requirements.

The Question 3 Conundrum: How to Deal with Major Grants

There is however a noticeable exception, one which surprised the Foundation. Question 3 asks the following:

Do you believe the Foundation should have independent authority in determining Major Grants, or should there be a new Major Grant Review Committee as prescribed in this ZIP?

34 voters felt the Foundation should have independent authority, 34 felt that there should be an explicit formation of a Major Grant Review Committee as specified in ZIP 1014, and 20 voters thought either option was acceptable. Both options received a “majority” of support if you count 20 voters finding each option acceptable.

For questions 2 and 5, we had suggested a runoff poll. The purpose of a runoff for Question 2 or 5 was clear, since all options were either independent (in the case of Question 5) or on a sliding scale (in the case of Question 2).

However, the results for Question 3 suggest a runoff or additional polling wouldn’t be useful or instructive, and would delay us further in converging on a final ZIP. The result was a perfect stalemate, with each choice receiving enough approval (including the 20 “fine with either option”) votes to constitute a majority within the Community Advisory Panel. In either case, as Madars Virza put it in the burgeoning forum thread on the topic, “The only question is whether there should be [Major Grants] committee determining the recipients, but the funds would first arrive at ZF is inherent in both answers.”

Synthesizing the Major Grant Review Committee

In aggregate, the community clearly approves of either choice. The Foundation’s duty is to synthesize the choices to capture the goals of both approaches: Long term, the Zcash ecosystem should have a stable, independent Major Grant Review Committee. Short term, a flexible approach to enable effective grant disbursement right after NU4 activates is ideal, while the community has time to discuss and optimize the final structure of the committee.

Here is how we plan to synthesize these viewpoints in ZIP 1014 with minimal changes to achieve these goals. We will modify the Major Grant slice description as follows:

  • Keep sections 1-5, delete current 6,7
  • New Section 6: Major Grants awards are subject to approval by a five-seat Major Grant Review Committee. The Major Grant Review Committee’s funding decisions will be final, requiring no approval from the ZF Board, but are subject to veto if the Foundation judges them to violate the ZF’s operating documents or U.S. law.
  • New Section 7: Initially the ZF SHALL appoint the members of the Major Grant Review Committee and the ZF SHALL have authority to change or modify the Committee’s membership. To align with the Future Community Governance timeline (more on that below), the terms and election structure for members of the Major Grant Review Committee SHALL be decided in a new ZIP and ratified by the ZF Community Panel (or successor mechanism) no later than the end of 2021.
  • New Section 8: 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). Additionally, no one with interest in or association with the ECC may sit on the Major Grant Review Committee — since the ECC can be a beneficiary, this avoids those potential conflicts altogether. The ZF SHALL continue to operate the Community Panel and SHOULD work toward making it more representative and independent (more on that below).

This modification accomplishes what both sides of the poll desired: leeway for the Foundation to bootstrap the Major Grant process, plus a defined path toward eliminating the Foundation’s control over that process.

We will not conduct any additional community sentiment polling. The Foundation will be submitting these changes as a PR into a new ZIP, one which we are confident represents the community’s will. We’ll add that link here when available.

Next Steps

[1/31 Update]: To be abundantly clear, we still need to reach consensus on the changes to this ZIP with the ECC per our 2-of-2 trademark agreement; the exact wording and changes to ZIP 1014 may be modified with additional input from them before we submit a PR. We expect that to happen within the next two weeks.

We will work on coordinating an NU4 activation timeline with the ECC. After that, the Foundation will set up the Major Grant Review Committee structure to ensure we have the bootstrap process ready before NU4.

Congratulations to everyone in the Zcash community who participated in this historic process; this is truly a remarkable feat, and we are honored to have played our part in stewarding the dev fund discussion and resolution.

20 Likes

I merged the above, as well as the USD cap removal and minor cleanups, into my git branch here: Commits · tromer/zips · GitHub

@daira, would you like to merge it into your PR 319?

1 Like

Speaking for ECC: thanks, we’ll need time to review these changes.

1 Like

Dear Josh Cincinnati: This is a really good blog post, and I really like the general approach you’re taking to resolve the split vote on Question 3. We’ll review whether we think we can support it as a good solution to honor the intent of the community and we’ll follow-up soon.

5 Likes

For some reason, I always assumed that the MG grants review committee would sit within ZF legally but remain independent in terms of its membership and decision-making process. That would be a way to attract and empower interested/capable community members outside of ZF and ECC without the need to create a separate legal entity. Assuming that such interested/capable individuals exist, of course. I understand that the question of whether to compensate their work is also still unsettled.

12 Likes

As a member of the second Grant Review Committee, I can concur with @tromer observations but I can definitely state that it was a very transparent and truthful process, which respected the committee’s recommendations.

7 Likes

I was one of the 119 voters and voted to have a separate MG organization.

It seems to me, based on the above, there are two separate decisions that need to be made:
1/ should we have a separate Major Grants organization?
2/ if so, how would it work exactly (membership, decision making, precise mandate, etc.)?

For 1, should we have a separate Major Grants organization?

I strongly believe the answer is YES and that the MG organization should be completely independent of ZF.** We need to move the community and protocol to be significantly more decentralized than it is today, and we need to make this decentralization an explicit goal. We need many more developers driving the protocol and in the ecosystem and imo working themselves out of a job entirely by dissolving. And as most of you know, the best way to get something done is to make sure there is a directly responsible party. Someone’s butt needs to be on the line to accomplish this significant decentralization.

Why not the ZF?

Organizations work best when they have clear and simple missions. We need an organization whose sole purpose is to decentralize the ecosystem and eventually itself dissolve once this sustainable decentralization has been achieved.

In my opinion, the ZF has a complementary and meaningful role to play (per their mission) around education, protocol development/governance, and technical development. It is not an explicit part of the ZF mandate, nor should it be, to decentralize the ecosystem to the point that the ZF itself is dissolved. This would complicate both the ZF’s mission and the Major Grant’s mission, and I hope the ZF exists for a long time on the other side of this next/final dev fund.

Additionally the existence of a third organization moves us one step closer to decentralization and a much more resilient protocol. No single entity controlling the majority of funding forces us to build important competencies in the community around communication, governance, negotiation across organizations, etc.

For 2, how should the MG organization work exactly?

This is the discussion I think we should have. However, we first need to align on whether to have the MG. Some may believe that we cannot decide whether to have a MG group if we don’t know how it will work. I disagree. I think we should not try to solve both how it will work and whether we should have it at once. We should first decide if we believe such an organization fulfills an important enough purpose to exist and then figure out how to execute on making it successful.

Figuring out the right structure for MG will take some effort – who gets elected, how they make decisions, constraints on concentration of funding, can the ECC or ZF receive any of that funding, etc. There are many important questions to sort out…but these are solvable problems if the community is aligned around the need for such an organization. I also believe, we have a long time before 2021 and can figure out how to stand up an independent MG organization.

In advance of the discussion of how an MG might work, I wanted to voice very strong support for the idea of a Major Grants organization independent of ZF as a big step towards a truly sustainable and decentralized protocol.

4 Likes

Having a completely independent third party organization (2-3 multisig) was one of the options when the original polling was done back in November. ZIP 1006: Development Fund of 10% to a 2-of-3 Multisig with Community-Involved Third Entity

This seems like a similar proposal to that one. If a 100% autonomous entity to balance the ZFND and ECC (legality, custody, governance, board, funding, etc…) is the way the community wanted to move forward then it seems to me that the proposal would have gotten more support.

7 Likes

Shawn – my interpretation of the contentious issue in ZIP 1014 is exactly this. MG having near-complete authority received 34 votes. I am voicing my support for option B.

Do you believe the Foundation should have independent authority in determining Major Grants, or should there be a new Major Grant Review Committee as prescribed in this ZIP?

A. The Foundation should have independent authority in determining Major Grants
B. There should be a new Major Grant Review Committee with near-complete authority
C. Either option is acceptable

The results were a tie: 34 for A, 34 for B, and 20 for C.

1 Like

I understand the voting results (of the most recent poll) were tied. My point is there is a vast difference between a committee having voting and decision making autonomy and the formation of a completely separate legal entity.

This is an important distinction, because one was proposed before (1006) and wasn’t supported by the community voting process and the proposal that won over it (1012) proposed the formation of a committee:

40% for additional “Major Grants” for large-scale long-term projects (decided by the Zcash Foundation, with extra community input and scrutiny)

not a completely separate legal entity.

11 Likes