Major Grants committee

Governance
147

Okay fair enough. I hadn’t picked up on that part about the ECC in 1014.

I do however think that whether the ECC will have representation on the MG slice committee is worth unbundling from the rest of 1014 in light of the fact that an interest in independence for MG-slice governance has been strongly signaled and (imho) such independence will be very difficult to achieve if ECC has no voice on the MG fund slice.

There is essentially a hidden contradiction in 1014 as written, making option “B” for MG-fund slice governance essentially not a real option.

The current proposal for how the MG-slice is governed doesn’t constitute independent governance according to my concept of independence or probably many other people’s concept.

Edit: just to flesh this out a bit more–what I now understand the ZF to be saying is “(B) can’t be done this way or that way because those ways contradict other things in 1014”

Fair enough. But one could also make the contrary argument–e.g., “the people who voted for “B” couldn’t possibly have also wanted all ECC members to be excluded from the MG-fund committee AND no independent entity / legal structure because then “B” is essentially meaningless”.

There just seems to be an inherent contradiction here.

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148

Yup I hear you, and this (and the vibrant debate here) is part of why the Foundation’s synthesis option interprets from the poll results/admits “we need to figure this out with more community input, and we should set a deadline to do so, but until we can the Foundation has the support to move forward with the other community-approved option temporarily.”

Re: the contradiction, I’m not sure I agree since again it was a choice between two options that ultimately have ZF legal authority backing them (but with varying degrees of leeway for the Foundation; one one side with complete independence and on the other side with “veto but only under specific circumstances” but as you say in either case it’s subject to the ZF). Anyway that doesn’t mean we shouldn’t be open to changing the legal authority in the future, particularly if there’s renewed interest in a trust for the MG slice or something along those lines. I (and others) just don’t think it can be done in time for NU4.

But perhaps as @daira suggested the deadline could be more aggressive, or maybe there are other strategies to get there. Again @zooko and I have had initial conversations about this and I suspect we’ll get close to resolution here soon.

Thanks for the discussion @lex_node, I’m glad we could find some common ground.

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149

I enjoy trying to build bridges b/w traditional governance and blockchain governance.

Just as a little added context here on how conflicts are dealt with in the corporate domain–they are treated rather flexibly. Even Delaware default law (which is typically on the conservative end of the spectrum of governance choices found in the wild) is more liberal about conflicts than the ZF’s standard conflicts-recusal policy:

No contract or transaction between a corporation and 1 or more of its directors or officers, or between a corporation and any other corporation, partnership, association, or other organization in which 1 or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee which authorizes the contract or transaction, or solely because any such director’s or officer’s votes are counted for such purpose, if: [THE RELEVANT FACTS ARE DISCLOSED] (DGCL 144)

I can understand opting for a conflicts policy that is more conservative than Delaware’s default (which is the case re: ZF’s recusal policy), but the policy that persons who may benefit at some point must be off the board entirely is actually, so to speak, 2x more conservative than Delaware’s default. Most corporate governance experts recognize that such conservative policies deprive an organization of valuable potential governance participants–since most people who have something really good to say are deeply embedded and also have something to gain–i.e., a lot of the people you want to hear from have “skin in the game” and stand to benefit from governance decisions.

That is why most boards have SOME independent directors, but not ONLY independent directors. A board exclusively consisting of independents is an ineffectual board.

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150

Hi lex good to see you back, it has been a while! :slight_smile:

When people (sorry to pick on just you) are referencing the ECC, are you suggesting the company has a position on the board, they have a representative on the board or someone who receives funding from the ECC slice is on the board. I know all three can overlap, but they don’t have to.

I don’t see an issue, and even think it should be encouraged that an ECC employee, acting as an individual can and should sit on the board for at least the first year, maybe into the second when we will have more of an idea of the skills involved.

For the moment I think the conflict of interests, whilst real, are not a massive issue and the expertise offered by these people (zfnd board members, ecc members) far outweighs this.

I would be a lot more sceptical of the ECC as a company having a seat on the board. For profit companies are obligated to do their best by its shareholders/owners not its products.

zooko is not the ECC, for example. He might want to do one thing but the company and owners can stop him through legal means (and so can the zfnd). However zooko could sit on the board and not be bound by his ECC responsibilities (i am using him in this example because i really believe he could objectively decided on funding for others. I have no worries about him not acting in what he feels is the best interest for zcash)

A lot of the conflict of interest could be ironed out by rewarding the ECC via devfunding for giving contracts to external parties and basing it off how well the external party does. This seems an ideal solution. (this is going in another thread, I promise to write it up soon.)

1 Like
151

Any of these really.

I would analogize it to when a VC fund invested in a company has the right to appoint a board member.

That board member still has a fiduciary responsibility to ALL stockholders, not just the VC fund, and is not expected to be a mere toady of the VC fund.

This would be the intended result with an ECC representative on the MG-committee

152

@lex_node, I also believe we’re well past that stage of the discussion. We’ve converged into a framework where there are no reserved seats in the MG committee, and where ECC can be funded by MGs (in addition to its slice) but its affiliates cannot serve on the MG committee, and where ZF administers the funds.

So what people here are trying to resolve is a specific pragmatic question: the mechanism for electing the MG committee. Not its composition, and not the creation of new legal entities.

I understand that you object to this. You’re right that there other possibilities. Those were discussed for months, polled and rejected. To the extent that your ideas were already discussed back then, well the community has weighed on them. To the extent that your ideas are new, then sorry, but it’s too late for the current process, and you should have brought them up earlier.

Now, you’re of course free to speak your mind anyway! But please realize that what you’re calling for is stopping the train, reverting several months in this discussion, and re-opening issues (and their many dependencies) that the vast majority of the community feels we’ve already settled. Which would almost certainly delay the whole process so much that activation of the Dev Fund in time for the first halving won’t be feasible anymore (it’s already marginal).

So see, you’re fighting two battles simultaneously: for the merit of your ideas, but also against everyone’s sense of urgency. It’s like everybody’s rushing to put out a fire and are already running with water buckets, and then you show up and stop people to tell them it would be optimal to form a bucket brigade instead. Even if you’re right, it’s not the best setting for discourse.

So here’s a constructive suggestion for how to proceed. Let the current narrow discussion play out, and contribute to it. Let it be deployed in time to keep ECC’s employees paid! Meanwhile, open a separate forum thread to discuss future improvements. You can even concretely propose a new ZIP that implements these, on top of (i.e., overriding) ZIP 1014. When you achieve wide support for this, ZF will be obliged to act on that, and ultimately run a new poll (or whatever is then the state-of-the-art mechanism) to establish a consensus decision. If that happens in time for the start of the Dev Fund, then you will have 100% achieved your goal. If it takes longer, well at least in the interim we’ll have ZIP 1014 to keep us running.

How does this sound?

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153

Sorry but this is just dishonest. The question being raised was not a mere election mechanism, but whether “A” or “B” would determine governance of the MG fund. “B” is that the committee should have “near-complete authority.” That is not a question of election mechanics. It’s a question of governance and how to create a form of “near-complete authority.”

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154

You’re right, that was the starting point, but ZF has already moved past that by proposing that we will go for “B”, leaving open only the question of timing (the proposed deadline is end of 2021) and implementation (TBD).

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155

@lex_node No one, I dare say, pushed harder for the trust fund mechanism than I and after great discussion about a multitude of various different frameworks, it was not selected. But this was literally months ago and we have to move on because all of the discussion since then up to this point has been under that assumption. (I was disappointed for about 0.2 secs.) All I can say is dont be a stranger! :fist: Stick around! :zebra::zebra::zebra::zebra:

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156

OK these proposals are sooo terrible and thoughtless, I incentivized myself to come back and revisit this.

Triggering on retirement isn’t a good idea.

Basing the size of the future reward on the current value is a misalignment.

So how about:

Two Parts of Compensation:

(1) Some standard paycheck paid out every 15 days, calibrated to the current value of ZEC in USD.

(2) For incentive alignment, a one time fixed-relative-to-USD amount: e.g. $500 USD-worth-of-ZEC at the moment of Appointment-To-Committee, which is then paid out after a 24 or 36 month delay (or other thoughtfully chosen delay) .

Some other independent compensation paid out every 15 days, a paycheck.

157

For compensating the Major Grant Review Committee members, I don’t understand why something like my original suggestion isn’t sufficient:

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

Do we really not trust ZF to do something sensible with this? IMHO it is perfectly fine to leave it to ZF’s discretion exactly how to implement it.

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158

Strongly seconded, the ZF can solve basic comp issues on its own. Trying to detail all of this stuff by committee is an anti-pattern.

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159

Should ZF compensate Major Grants committee members?

  • No, it must not.
  • Yes, “for their time and reasonable expenses” as determined by ZF.
  • Yes, by specific amounts or mechanisms set in a ZIP.
  • Keep this out of the ZIP, and leave it at ZF’s complete discretion.

0 voters

Please select all that you think are acceptable. Your vote will be public. This is a non-binding non-official straw poll.

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160

Strictly speaking, MG committee compensation is also out of scope for the question at hand. Since the discussion already started, I created a poll to gauge if there’s an easy resolution. If no clear consensus emerges then let’s open a separate forum topic to discuss further.

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161

It sounds strange to me for the ZFND to have full control over the MG slice while having its own engineering roadmap which it decides on its own.
Any thoughts?

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162

Given that the ZF has to declare all expenditures and that they all have to conform with regulation surrounding a 501c3 anyways I feel that defining it is simply better than not (concerning the ambiguity about what we’re doing here) even though there may not be much of a difference beyond being able to point and say “see” and then “see also”

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163

Finalisation of a ZIP requires the 2-of-2 approval of ECC and the ZF (with evidence of the community’s intention as a tie-breaker in case of dispute).

I take these issues very seriously, because good governance of the MG has the potential to be one of the most important factors in Zcash’s success in the long run. (And, not to focus on negative possibilities, but capture-prone governance of MG would be a major risk, since the MG funds are potentially very large.)

I believe it is one of ECC’s most important duties, as one of the two stewards of the trademark, to serve as a check-and-balance against overreach (even well-intentioned overreach) on the part of the Foundation and to ensure that Zcash has a high-integrity governance structure.

For me, this discussion has been very helpful. The things posted here — especially the new inputs that I haven’t heard before, and those based on relevant prior experience from the posters — are informing my thoughts about these issues. As Josh Cincinnati has stated, the next step in Zcash governance is for ECC and ZF to agree on a ZIP text that honors the community’s expressed desires. We’re going to be working together on that in the coming days. Like Josh said, it realistically is going to take a couple of weeks to hammer out all the details.

I think everyone here has governance fatigue. (Except for Avichal and Lex, who sat out the second and third quarter and are now leaping back in with vigor! :joy:) But we’re just about done.

ECC and ZF have an informal mutual understanding at this point that we’re going to draft a mutually-acceptable refinement of the ZIP — including resolving the open question about independence of MG governance — without unnecessarily revisiting any decisions that are already settled by the community sentiment polling.

And remember, Zcash can upgrade its governance mechanisms in the future. NU4 doesn’t have to be the be-all-end-all of governance — it just has to be a good foundation to build on.

We’re working hard on this, and we’ll get back to you as soon as we have something to show you. In the meantime, I will be watching this thread. I think some of the responses on this thread have been defensive, and I think that’s a mistake — probably due to governance fatigue. For my part, I remain keenly interested in all the opinions I’ve seen expressed in this thread recently.

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164

Yes, but I also understand finding 5 zealots is easier to do if you pay them.

165

This seems reasonable to me.

166

Less of this, please.