Major Grants committee

Governance
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Thanks for your post, Steve.

Scrutiny is not the same as spurious insinuations of bad faith. Scrutiny strengthens communities. It encourages good people to join the community and to lean in. Spurious insinuations of bad faith do the opposite. They are corrosive to people and to communities, and they can be used as a tool to deflect attention from integrity issues that the community really should be paying attention to.

I appreciate your concern for ECC’s work to continue to be funded, Steve! I like the direction you’re going of having some kind of transitional period where MG funds could be used to sustain ECC’s operations, while still making progress toward including and empowering more independent core support organizations.

On the other hand, maybe it would be good to exclude ECC entirely from the MG funds in order to effectively signal to the wider world that the MG is open for competitors and that Zcash no longer has any central point of failure which receives > 50% of the funding.

Also, don’t forget that this all kicks in next year, in 2021 — we still have 2020 under the current funding regime. So we have time to work on planning what to do under the Dev Fund.

These aren’t issues that we should be deciding right now. They are issues that the MG governance process should decide. What we need to decide right now is whether that governance process is to be under the control of the Foundation, or independent of the Foundation. Let’s not allow our attention to be deflected from that critical question. In my opinion, it is even more important to signal to the wider world that there is no single point of failure that controls > 50% of the funds, because control of the funds is where political power concentrates.

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P.S. I really thought Barbra’s comments up-thread (1, 2, 3), which are apparently based on experience, were insightful. One comment she made that I appreciated was that the problems of too much concentration of power happen even when there is good faith on the part of the entity wielding that power.

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A quick point: we are all focusing on independence of the committee. I think a number of people are worried, long term, that the committee will get captured. This is a concern. But our larger problem, short and medium turn, is we need to effectively spend money to further the ecosystem. All of the good governance is moot if the project fails to gain traction. Moreover, people can always vote with their feet/wallet or fork the system.
I don’t want to minimize people’s concerns, but we should keep the other goals in mind as well.

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I scanned ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants .
My apologies if I missed included information.

Where is the compensation for the work to be performed by the MG Committee Specified? That information merits its own section, and/or was too hard to find.

Thanks in advance.

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I agree. Again speaking again from my experience in ZF’s previous (non-Major) Grant review committees, our problem was never with capture or conflicts. CoIs were properly disclosed and effectively handled. And ZF did a good job of minimizing them in the first place, by its choice of committee members.

By far the greater challenge was understanding the proposals well enough to render live-or-die judgment on their merits. Which involved learning about the teams, understanding (and often, questioning) their technical approach, assessing their timelines, budgets and deliverable. Exercising the accountability, prioritization and effective execution that this whole mechanismis is meant to facilitate.

This is consistent with my my experience serving on other grant boards and other review committees. It’s typically 3% of the time spent mitigating CoIs, 17% spent arguing about merit, and 80% spent with someone’s PDF files and budget spreadsheets, holding a red marker.

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(ZIP Editor hat.)

The current wording on the composition of the Major Grant Review Committee is:

  1. Major Grants awards are subject to approval by a five-seat Major Grant Review Committee. The Major Grant Review Committee SHALL be selected by the ZF’s Community Panel. 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.

  2. 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). 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).

So there is no coin-holder voting for that committee (unless the Community Panel decides there should be, perhaps), which I think addresses @tromer’s points.

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Thanks for the response Zooko.

Fair point, well made. I wasn’t trying to excuse the behaviour of bad faith actors and agree with what you wrote - I don’t spend time on twitter so I assume I am somewhat isolated from it.

I don’t like this reasoning unless the zfnd has total oversight, in which case I empathise but still feel it might be a step to far depending on the reasoning the foundation gives. I know you are saying you don’t think you will apply for these things not that you wont. and are coming from an ideals perspective.

Yes it is kind of on and off topic. I do feel it was made relevant though when you suggested that you might not apply for grants. I see this a detrimental to zcash as outlined by the zip. but I didn’t just want to moan, so I though I would add an idea. (feel free to shoot me a commission, heh. j/k)

I am happy to argue either way on the subject of the committee. I would like a grants committee, as defined in the zip. I am concerned for the who will be on the committee because I have no way to vet them or their credentials. but this is the same as trusting the zfnd with the money, I trust them to set up the committee too. (and the ECC if they are not getting MG’s)

Just to reiterate my main concern, which far overrides my opinion on the committee, is if the ECC turns down MG’s. I understand your point of detractors and people harming the brand, but I feel that it would add vastly more weight and transparency to the ECC had and did to apply for them (especially with an independent review committee rather than just the zfnd). We are just waiting for the foundations statement.

I feel I have expressed my concerns over the MG committee and as not to derail this thread I am writing one for funding discussion should the ECC not apply for major grants.

I am really interested in pursuing this as another avenue because the ECC becomes accountable and gets rewarded via other peoples performance and transparency. I really like that idea, I just need to flesh out my thoughts a bit further. this is really off topic now. sorry.

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(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.

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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.

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(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).

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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.

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

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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
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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.

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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.

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

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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
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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.

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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?

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

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