imo, would be a huge waste if MGRC just sat back and waited for proposals to analyze. think MGRC should operate as the venture capital arm of the zcash ecosystem. believe MGRC should even be capable of buying existing services that aren’t obviously closely adjacent to zcash, but could increase ZEC’s user base/velocity.
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i appreciate that zooko is not unaware of the enthusiasm of the exchange price, and that MGRC is a marketable aspect of our community, but i think going the route of allowing zips to bend to influx of short term price takers is generally a bad idea.
i would like to see the as-written zip stuck to plan. let’s not play with it too much, else we might go blind.
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Why is this discussion happening now? Shouldn’t this be done a while ago while dev fund discussion was happening?
IIUC, major grants dev fund is supposed help fund larger & long term initiatives & teams that makes zcash easy to use, make it more private & get user adoption etc.
This is not the original purpose of MGRC. There is a whole new conversation to be made, requires modification of dev fund ZIP.
100%
I don’t recall who mentioned (probably @alchemydc) but MGRC and/or ZF can/will reach out & motivate smart teams who BUIDL to make proposals & build (open-source) products/software etc for Zcash.
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I hate to repeat myself but this is not part of ZIP 1014. FYI I’m not against this completely but we don’t have time to consider this seriously to get community’s approval.
Can ZF do this already instead of MGRC?
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@kek I don’t think Howey would dig it
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i’ve been talking about this for a minute
i don’t see anything in original ZIP that states MGRC cannot operate as proactive organization.
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Hi @MGRC-Candidates,
I am getting a little concerned how this discussion is developing.
Just so everyone is on the same page here, it would be a complete travesty if the people elected to carry out 1014 change the scope or intent of the zip. Specifically investing some portion of the Dev Fund, or not honouring the communities intent with who should get the funding.
The process didn’t just approve a particular zip, it rejected others too.
The discussion we had about 1014 was to allow “full stack” development teams the time and funds to onboard themselves to the project. MG’s are specifically to fill the ECC like role. It is there to get us more ECC’s. More teams that can replace the ECC. That is its number one goal. We need to discuss how we get there.
The dev fund could be argued to already be very light on funding for this purpose, seeing as what was required by the ECC to get them through the first 4 years. We know this has not been financially plain sailing. Remember them posting they were running out of money and might quit if they didn’t get algo based rewards? “All in ZEC”? And that was just 1 team. This fund has to fund multiple teams with the huge up front cost of learning zcash tech. So the funding will pretty much exclusively be spend on tech teams. It wont have the funding to cover other stuff the ECC has done like creating the ZFND, marketing, out reach, etc.
1014 has the provision to give the companies their funding from the algo, reasoning being some incentive alignment from volatility price gains and as a mechanism where they know they are going to getting paid something. This is what the community voted to do with the block rewards. - Which is not free money, someone is paying for that with their electricity. The aim is to get the people paying the dev fund better value for money regarding teams than the people who paid the FR, a very tall expensive order.
Because the funding for applicants is preawarded it means the MGRC will not and cannot gain/lose funds from price swings - only the recipients. This is by design and a non-negotiable part of the zip. I know I tried to negotiate against payments in zec only. (but potential recipients all voiced support for zec based payment.)
The idea of investing monies from the dev fund did come up it was by @ttmariemia in her proposal here:
Which was withdrawn and not voted on. As @dontbeevil has said, is now really the time to be discussing modifications to 1014? - and running on a position that means you will inherently break 1014 is not good.
All this was a long time ago. It might be worth going over the zips again, or even watching the livestreams. (I apologise in advance for my terrible sound) : -
- Zcash Protocol Hangout, Dev Fund Edition - not actually 7hrs long about 3.
Here is the second hangout: (at least check out the timestamped post)
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Zcash Protocol Hangout, Dev Fund Edition #2 (tromers post and stream link.)
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Zcash Protocol Hangout, Dev Fund Edition #2 - Timestamps of the stream.
and the most recent one:
I am not against “investment” and might have backed the zip, I certainly would feel a lot more comfortable if it was currently in a zip, preferably 1014.
It might turn out their is a large surplus of funds through a lack of applicants and becoming some kind of venture capital group is a good use of those resources. We will cross that bridge if we get there. Most of the other ideas people have been putting forward seem to be better suited to grants not rewards hardcoded into the blockchain.
Sorry if I come across a bit grumpy/tetchy in this post. I and others put a lot of time, blood, sweat and tears into getting 1014 to where it is and I am genuinely a bit worried. I am posting this with my CAP hat on, not as an applicant.
steve.
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i don’t see this happening. if community wants MGRC to not be proactive believe original ZIP should be reworded to exclude these types of activities. really don’t think the community voted for MGRC to act in the exact same manner as the foundation (sits back and waits for proposals to evaluate). honestly, this would be a redundancy. imo, would be unwise to build-up MGRC as a redundant bureaucracy
if i get elected - going to advocate a certain % of funds get directed towards outreach
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This logic is circular, but it doesnt matter, I am not saying the MGRC should not be proactive in their approach, the point I am making is 1014 does not give them the ability to “invest”. What it would do is allow for a marketing company to approach the MGRC (or the MGRC to directly solicit tenders for outreach) and then give that company some of the block rewards.
I hope every candidate does! The point you have highlighted from your candidate thread is not what im worried about. But it would have to be a company handling that to get a MG otherwise why wouldn’t the ZF do it?
Remember all awards will be for minimum 6 months and can only kick in with network upgrades. and using those funds we need to make sure that in 4 years time there is a development team there who can carry on the zcash logo and the network upgrades. We need to find engineers as skilled as those at the ECC as a top priority. It might even involve saving for a rainy day. We just dont know yet. (I understand it is a balancing act and if the coin is worth nothing then there is no need for a tech team.)
What we do know is everyone that gets awarded MG’s needs a strong proven track record. Those people are not cheap, be it outreach or tech or getting listed on exchanges.
EDIT: Im not 100% on when the awards kick in, I just had a thought that you could generate a number of privkeys then given out as payment. but then this seems a very obtuse way of doing things.
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I believe the ZFND already currently does this with ZEC they hold to diversify risk. Per the Q2 2020 transparency report:
We currently have roughly 110,700 ZEC, 46.3 BTC, and $4.3mm USD on hand.
And since the Zcash Foundation is to be the recipient of the ZEC block reward funds until the MGRC has directed where they would like to spend (per ZIP-1014):
The funds SHALL be received and administered by ZF. ZF MUST disburse them as “Major Grants”
I would think the responsibility of a diversification/investment strategy to mitigate risks/downside/long term holding of a large amount of ZEC would fall on the Zcash Foundation rather than the MGRC.
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Can you do that with MGRC funds? if you convert to a different asset and the price rises, you can no longer offer the right amount of zec to the applicants. I cant remember the reasoning as to why zec payments won, but it was why I was pro fiat payments. it offered a more stable path.
It is probably in the 3rd stream. I will check.
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I don’t know. I was just thinking about if there is to be some sort of long term investment strategy as @alchemydc had suggested then who would be responsible for it?
Since the ZFND holds the ZEC they would be the only ones that could employ such a strategy since MGRC doesn’t custody the ZEC they allocate where to spend the ZEC.
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But it’s also because Zcash had lots of inflation
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MGRC can be proactive, it is only meant to hire (not invest) teams that spends dedicated time building for zcash. If ZEC goes moon, and MGRC & community have already hired A star teams executing on every level then then we can see what can be done with surplus funds (one option save it for next 4 years)
For example: Ian Miers & Matthew introduced Bolt - private payment channels for Zcash in 2016
Bolt Labs company was initially formed to make this a reality for Zcash, later their team extended the protocol to make it work for Tezos & Bitcoin (which is not necessarily a bad thing because they didn’t take(ask for) any money via ZF grant - MGRC didn’t exist back then). If MGRC slice is used for investing, it will just become another investor in their cap table (there are other VC funds who probably don’t care about solution for Zcash) & it doesn’t guarantee a solution for zcash. Their mission & roadmap can change - we won’t have any control.
Imagine if Bolt labs got a good slice of funding from MGRC slice - they would build it for Zcash & try to make it a reality. There is no ambiguity there.
Community should only vote for top candidates who will respect & follow ZIP 1014.
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The MGRC will be doing basically what the ZFGRC does now because like Shawn said, custody
You can see “How it works” right there on the page and you will be emulating what they do because in the end they’re (ZFGRC) the ones doing it
They’re giving some individuals an opprotunity of taking on some of the ZFGRCs pre existing responsibilities without all the negative legal repercussions normally associated with it in granting funds and thats it
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I agree with @alchemydc (and also @ttmariemia and @mlphresearch in previous discussions) that MGRC should be able to make mission-directed investments that have an equity or profit/revenue-sharing component. That is, make payments that are not outright grants conditioned just on execution, but also include “pay us back if you make money out of this” terms, to projects within MGRC’s mission and scope.
This has several benefits.
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First, it provides a potential path to replenishing the MG funds and making them sustainable in the long term, rather than going back to the community hat-in-hand in 2024 and asking for extension of the in-protocol reward allocation.
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Second, it levels the playing field between projects that produce public goods that cannot be monetized, versus projects that be monetized. It makes sense to award outright grants to the former, while capturing some of the latters’ profits and redirecting them to future public goods. The alternatives are bad: either just avoid funding some valuable projects because they could turn out profitable (this demand did come up in the context of ZF grants!), or allow such projects to capture value without giving back.
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Third, it opens the door to the powerful blended funding models, where the MGRC would be part of a larger pool of investors, or even in explicit collaboration with VCs. MGRC can provide the domain expertise and sweeten the financial terms, thus attracting (potentially much larger) investment capital. Leveraging domain expertise and a nonprofit pool fund to attain much larger impact via for-profit investments is model used in other contexts, such as developing world investments.
The caveats I see are:
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MGRC should still give high priority to non-profitable public-goods projects that have high impact. It should not be tempted by the narrative that for-profit projects are always better because they can fund greater future impact.
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Profit/revenue-sharing arrangements can be difficult and distracting to set up, especially in the blockchain arena where business models may be fluid and weird.
Note that this is quite similar to or @ericmeltzer’s Zcash Ecosystem Fund, except that we are explicitly encouraging also funding of public-goods project with no prospect of turning investment profits. It’s also reminiscent of “green energy” investment funds and the like, but reversing the priorities: instead of serving investors who have an ideological bend, it’s about serving idealists with a penchant for sustainability and impact.
As for whether this is permitted by ZIP 1014… I think yes, though unfortunately this isn’t crisply specified. My proposed ZIP 1012 did include language in this spirit:
ZF may award grants as profit-sharing contracts, in which case any resulting profits will be added to the ZF-GU slice (to fund its ongoing operations and any future grants).
The revision from ZIP 1012 to ZIP 1014 removed that paragraph (I don’t know why), but did not contradict it. I’m comfortable with the interpretation that this is still allowed, and the removed paragraph was just overly specific.
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English is not my mother tongue, but the ZIP-1014 says the MG is to perform major ongoing development (or other work) for the public good of the Zcash ecosystem.
Do you disagree with the ZIP ?
Yes I agree with you, this is critical
It takes really long (5-10+ years) time to make any reasonable ROI - and require large number of investments to find a unicorn. Unfortunately, number of private companies who mainly work on Zcash is small. So, I’m not sure why we even want to seriously consider this route now (with many known unknowns) & increase the complexity.
Are you proposing we invest in companies like Ren & get an allocation of their tokens? 
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But it should’ve been specified right? it doesn’t talk anything about having equity, tokens, profit sharing in return for funding the projects. Does it make sense to revisit this after MGRC is formed, have already made bunch of major grants?