Major Grants committee

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.

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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.

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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.

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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.

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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.

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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.

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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.

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@avichal, you raise valid concerns and interesting ideas, but the ship has sailed. As @Shawn says above, the previous sentiment collection round has clearly indicated a preference for not creating a new, completely independent third entity.

Still, I would like to briefly reply to your new idea:

Let me break that down into the three parts:

decentralize

Zcash Foundation’s values state:

Decentralization. We will strive to make the Zcash protocol and network decentralized, avoiding the placement of trust or granting of capabilities to any single party (assigned or emergent). Whenever current technology does not achieve perfect decentralization, we will seek to minimize, monitor and mitigate centralization.

I believe ZF has been consistently and diligently acting in accordance with this.

whose sole purpose

Achieving this purpose requires infrastructure and expertise, which are very difficult to attain and maintain. ZF already has these, towards the same ends (see above). True, ZF has recognized that some of the decentralization goals (e.g., developing an independent Zcash node) are best achieved in-house, and it wasn’t for lack of trying to achieve this externally (e.g., by a contract with an external developer, Parity). Evidently, this kind of flexibility to do some work- in-house, and the technical cognizance that comes with it, are necessary.

and eventually itself dissolve

That would be setting up for failure. Recall the Shirky Principle: Institutions will try to preserve the problem to which they are the solution.

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Oh I see what you’re saying.

Yes, I agree. I don’t particularly care about a separate legal entity as that is an implementation detail. I do care about autonomy from ZF and not having ZF influence the decision making process of that MG organization. To this end, as long as the MG review committee is not breaking US law (and thus jeopardizing the ZF legally as a US entity) it seems we can create a governance structure that keeps it autonomous. The rest of the points around the purpose of the MG being somewhat independent of the broader ZF mission still stand I think.

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OFF TOPIC: I ordered this book a few days ago :smile: Happy to know that was a good choice.

While this is one of the values, I don’t believe ZF is executing on this particularly well. The example you cite is a great one – bringing node development in-house to ZF is exactly the sort of centralization that I think the community must fight against. In fact, we have gone from Dev Fund I where ZF had no protocol level obligations for funding to Dev Fund II where ZF is getting access to significant funding from the protocol…this seems strictly in opposition to the idea of decentralization to me.

That’s not to say that anyone did anything wrong and everyone at the ZF is extremely well intentioned, but as you cite, the Shirky Principle almost certainly guarantees that ZF as a centralized entity should not be tasked with trying to decentralize the protocol.

This is why I believe an organization who strictly allocates funds and does no development and has no standing employees is far more likely to actually dissolve and thus achieve the aim of true decentralization.

In some sense, I see the MG Review Committee as the subset of ZF that should take over the “decentralize the protocol” mantle and the rest of the ZF should give this mandate to a group that is better structurally set up to accomplish this goal.

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This sounds very much like what ZF has just posted!

I think the only substantial difference is the transition period to establish the means of governance that will elect this committee. Given the recent brouhaha over the coin-weighted petition, and the sorry state of its implementation, I think that makes sense. We’re not ready for binding elections yet.

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It’s close and I think removing the ZF veto is a step in the right direction.

However, I think the new Section 7 is the part that ties the organizations together in a way that is not healthy and imo the timeline is far too long. I believe we should hash out how to get these people selected independently of the ZF in advance of Dev Fund II and work hard to ensure that this group of people is independent of all influence from ZF.

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Great, then you’re welcome to propose a mechanism for the MG committee elections! Recall ZF’s phrasing:

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.

So that’s just the deadline. If you already have an implementation of the election mechanism and can convince the community that it’s good, then we can put it into place much earlier, perhaps from the very beginning of the Dev Fund!

Meanwhile, this shouldn’t block acceptance of the (modified) ZIP 1014, which needs to be implemented in code, tested and deployed. Those can be done in parallel to designing and deciding the MG elections mechanism.

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I fail to see the reason for creating an independent comittee held to legal accountability when it’ll be the ZFND who administers those decisions and who will be held ultimately accountable, the legal veto serves its purpose (and really, assuming good communication, should never need exercised)

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The ZFND should agree on a proper charter at some point.
Terms and definitions are all over the place currently.

@mika, what’s amiss? The About the Zcash Foundation page seems coherent and comprehensive to me.

(If this is going to be a long discussion, please open a dedicated topic.)

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Zip-1024

…describes a structure for the Zcash Development Fund…

That’s a very specific scope.
However Zip-1024 also defines general rules. It does so e.g. in the section about “ZF Board Composition”

Members of ZF’s Board of Directors MUST NOT hold equity in ECC or have current business or employment relationships with ECC…

How is this supposed to evolve?
How is one supposed to understand the rules for e.g. the ZF-Board at a specific point in time?
By going trough all zips? and combining all rule definitions referencing the ZF-Bord?

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This is a draft ZIP, so of course it’s not implemented yet in ZF’s legal documents. After it’s accepted, ZF and ECC both have homework implementing it within their legal structures. This may involve changes to the bylaws, new contractual arrangements, etc. And indeed, these will be publicly visible, presumably at the same place as the existing material.

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I see, thank you…

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