Hello friends! Here are ECC’s current thoughts on the process of setting up the MGRC.
The TL;DR is that Major Grants represents such a large share of the dev fund that we think it is necessary to take more time to get the right candidates.
Due to the 2-of-2 governance structure (thanks to the trademark agreement), ECC needs to sign off on any new code that implements consensus rules that direct funds to the MGRC. We have a responsibility to protect that money that the Zcash community is donating to MGRC, and to ensure that it is used in a way that honors the community’s intent.
This is a big deal! It is worth 8% of all of the Zcash issuance for the next four years (more than the amount of Zcash that the community has allocated to ECC or the Zfnd). At the current price of approximately $50/ZEC, that would be $20M worth of coins over those four years. And, of course, if the price of ZEC goes up to $500, then it would be $200M, if the price of ZEC goes up to $5000, then it would be $2B, and so forth. So it is potentially a huge amount of money at stake.
Also, it is a huge strategic move for the Zcash community. Since MGRC will manage more coins than either ECC or Zfnd, and since it has been tasked by the community with bringing in new entities into the Zcash ecosystem, it could potentially have a greater impact on the trajectory of Zcash than even ECC will have over the next four years. If it is led well this could be a tremendous positive impact on our mission. If it is led poorly this could be a tremendous waste and missed opportunity. And there’s even a small risk that it could have a negative impact if things went really badly.
So, we at ECC have been thinking a lot about how we can support the construction of a super high-integrity, super effective organization. We’ve also been engaging — as we always do — with Zcash-loving companies, investors, and other Zcash supporters of all kinds and asking them how they want to see Zcash evolve over the next few years, both in general and with regard to MGRC.
Questions that good candidates are likely to have.
We, the Zcash community, want the best and brightest to serve on MGRC. It’s a huge responsibility and a huge opportunity to boost Zcash far beyond anything we’ve seen before.
In order to attract those kinds of people to take on this responsibility, we need to answer some questions that they will have:
- What are the responsibilities and the time commitment of the role?
For the most highly-qualified, most sought-after people, their time is the one thing that they don’t have enough of, and we need to give them some details about the expectations and the process so that they can think about what kind of time commitment it would be to do a good job of it. People always say “Oh, it’s actually not that much of a time commitment…” but that always turns out to be untrue of something like this, especially during its first year when there will probably be a lot of extra work that needs to be done to get it up to cruising altitude.
- What is the compensation going to be?
There are probably a lot of people who can’t commit to taking on the responsibility without knowing what the compensation will be. But who is going to decide that? And when? One person that I talked to suggested that a solution to this sort of puzzle is that everyone agrees to hire a service like “Diversa Partners” or “Hedrick & Struggle” and pay the committee members whatever amount Diversa Partners says a person in that sort of role should be paid. But who is going to do that and hire Diversa Partners? And when?
- Who else will they be serving alongside?
One person I talked to — who is the CEO of one of the largest companies in the crypto industry, with probably tens of millions of active customers — said “To serve on something like this, only two things matter to me: the mission and who I would be working with.” But how can he know who else he would be working with?
I guess he could wait to see who else publicly throws their hat into the ring and seems likely to win the Community Advisory Panel’s approval. There’s kind of a bootstrapping issue there — maybe they’re waiting to see if he’s going to run! Or is there some other solution to this puzzle?
Maybe we just need a longer cycle time for potential candidates to think it through, talk to others in their circles, and commit to doing it, and then still have time for others to see what high-quality people are committing to it and so they decide they want to go out for it as well.
- Five simultaneous one-year terms?
ZIP 1014 specifies that all five members are subject to re-election every year. This means that by the time they gel with each other and start getting real work done, they’ll have to start thinking about the possibility that they or their colleagues will be voluntarily or involuntarily leaving within a few months.
This is an especially acute problem in this case because of the mandate for the MGRC to support long-term engagement from serious third parties. They can’t effectively exercise curation and oversight of third parties if they’ve inherited the third party from their predecessors, or if they are not sure they’ll still be around to take responsibility for the fruits of their labors once it comes to fruition.
A better and more typical pattern for an organization like this would be that every year one or two out of the five seats comes up for renewal so that each seat has a three-year term and in any given year no more than two seats change.
We think some good, qualified people might hesitate to take this role under the current re-election schedule, since it could prevent them from succeeding at the MGRC’s mandate, and they definitely would only be willing to invest their precious time if they believed that they could achieve good results from the investment of their time.
Could the Community Advisory Panel consider amending ZIP 1014 to change the re-election schedule?
Okay those are some of the questions that we think good candidates will have. Let’s start coming up with some answers together. Please weigh in!
What sort of people should we try to attract to serve on MGRC?
We’ve been asking people who have experience at this sort of thing — serving on Boards of Directors of large organizations, allocating large amounts of capital, etc. — what sort of people would be best to have on the MGRC. They all have different answers, of course, but one common theme is diversity: they all say that you want people with different, complementary skillsets and backgrounds and networks. And of course they have to work well together.
So what sorts of backgrounds and skillsets do you think are most important to have on the MGRC?
Should we have people with experience from different industries — one from financial services/financial markets, one from consumer products, one from the non-profit/grant-making sector, one from regulatory/government, etc.? Should we have people on MGRC from both New York and Silicon Valley? From Asia? Europe? Africa? Latam? Should we have people whose expertise is in business operations, and one from law, and trading/markets, and venture capital, and product/technology? Should we have people from diverse cultures and backgrounds and seniorities and life experiences? Should we have people who are representatives of the ZEC coin holders? How about a pseudonymous community member whose only qualification is that they’ve been a voice for Zcash all along? All of these could be important, but we can’t get maximum diversity on all of these dimensions at once. What’s most important to us?
Above all, in our opinion, they need to be leaders — people of utmost integrity, who will do the right thing for the Zcash mission despite any attacks and challenges. People who are willing and able to make difficult choices under pressure, to skillfully execute toward a shared vision, to work well with others, and to communicate their choices and vision persuasively.
Next steps
Please respond here with your answers to these questions and your ideas about the process for setting up MGRC, and also feel free to reach out to me privately if you prefer. I’ve cleared away some of my other responsibilities for the time being to prioritise this because we think it is one of the most strategic developments for the whole Zcash movement.
Our overall feeling right now is that we mustn’t rush this. We can’t have a good election until we have a really solid slate of candidates lined up to choose among, and we don’t think we can get some of the best candidates to even start throwing their hats in the ring until we’ve made progress on these questions.
So, we propose that we add 90 days of additional time to the election schedule. Given the magnitude of the funds involved, and the potential impact that Major Grants will have on the project, we believe the quality of the Committee is more important than the speed with which it comes together.
Note that the hard deadline imposed by the Halvening in November doesn’t require that we have the MGRC constituted and up and running by then! That would be good, of course, but the only hard requirement is that we all agree what Zcash address the 8% of the donations go to, who controls the keys, and under what mandate the org is receiving that money.
I’d like to thank the Zcash Foundation for getting the ball rolling on this important and urgent work we’re doing together.