Manufacturing Consent: NoamChom's Nu6 Block Reward Proposal

[noamchom]

@zkcroc

I guess the point of this proposal is that there IS cash in the ECC and ZF treasuries so a smaller reward might work

Yes. It also intends to be sure that ZEC are less freely available in the next 4 years, which will imperatively make the recipients of their % of the freebies treat them with more respect.

@GGuy

Need more details about time allocation to this project. Hard to believe they can actually deliver in a year. So $2m to 3m feels about right.

The point of this post was to show the figure is within the ballpark of what is required to fund QEDIT’s proposal.

My belief here is that Qedit and Shielded Labs are intentionally “under funded” because it doesn’t make sense to accidentally over fund them (wherenever there is always the possibility of ZCG performing budget gap coverage).

Overall as many of you know, I believe there are huge problems with over funding organizations because it inevitably forces them to find more esoteric, creative, value negative means of keeping bussy… Look no further than the Zcash Parachute project, countless other ZCG grants, and on the ECC side - they over spent in many value-negative initiatives in the last 4 years. ZF is still paying legal counsel and auditors to conduct Trademark battles…

There are better things to spend capital on, this is why I believe that funding for free needs to drop lower. We’ve got to think about the bottom line in these next 4 years. The easy money belief system needs to be eliminated.

@gottabeJay

I really do want to see robust governance reforms of all existing orgs and to align incentives to better support Zcash the product not the idea.

Yes I believe that governance needs to be improved. No, I don’t believe NU6 should be the field for which that debate is held/ resolved

@Jgx7

zec holders - 5%. i think some type of reward for zec holders is beneficial until we get to POS

I agree in theory, but in practical terms… My guess is that this is impossible given that NU6 happens in only 8 months.

@Autotunafish

501c3 charity status mandates they are prohibited from engaging in self innurment investment schemes with public funds and stuff, which incur the reporting requirements, so on so forth.

My guess is that they’ve got the good fortune of having not been investigated by the IRS yet. We’d only know in hindsight, whether or not it is legal to achieve 501c3 status for a project named Zcash, then to become a protocol encoded receiver of Free ZEC coins… which the organization then turns around and sells into the market to create a huge bag of Bitcoin.

I call that a Crypto Hedge Fund, taking speculative risks, from the pockets of the project investors (ZEC holders). Maybe I’m too conservative in my assessment, maybe the IRS would see it differently.

@Autotunafish

How would you, the Zcash community, actually enforce reporting requirements or enact penañties for potentially for-profit entities? Why do for-profit entities think they can profit off of donated money from the public (stupid question!)? What is the lever and why would they not immediately start planning on pivoting away from under it? Who monitors and then, presumably, soft-forks us? What actually constitued that and who gave them this authority? What are they even montoring? How are they incentivized? There are many things open to capture.

All Good questions, I don’t have explicit responses. But if my proposal gains traction, I’ll put in the work to formalize expectations around these topics.

I believe that it is a broadly supported theme that I’ve created here:
Under the next block subsidy model, recipients will be banned from taking ZEC from the protocol and then re-investing them into other non-Zcash speculative crypto projects.

@Autotunafish

The last part where it says “non-Zcash related treasury activities”, I assume falls into the same category of angel funds hedge stuff, but it is a bit ambiguous.

Correct.

@Autotunafish

The goal is privacy enhancing technologies

Where did you pull that generic theme from? I looked at the ZF mission statement, and it speaks directly to Zcash. I hadn’t noticed any remarks that open the book to sponsoring anything they want, at their discretion.

Once again though, funding other stuff like Tor is fine. Even funding StarkWare is fine. But I propose that it shouldn’t be taken out of the pockets of ZEC users/ investors.

@GGuy

Just so everyone is aware, at $40 per ZEC would mean 1% is approximately $250k a year.

I understand how you reached your 60% proposal, its bottom up/ worst case modeling. My opinion here is that we’ve all got to say our prayers at night, keep buying & zodling, and keep building & evangelizing. ZEC should be valued by the market well above $300 in the years ahead.

I’ll ask all of the readers here to imagine a best case scenario… add an extra zero to GGuy’s totals here from a $40 annual ZEC. Let’s instead suppose $400 per coin.

@zkcroc

Unironically ECC and ZF “playing hedgefund” has put them in a position where they don’t have to solely rely on block rewards, has that come at a cost to the price of ZEC

Exactly my point for years now… its only speculation, but I would assert that if the orgs had been acting with some interests toward ZEC - rather than Agoric, Bitcoin, StarkWare, or Ethereum

We could easily be holding this debate within the context of ZEC being valued at $100 each.

Block reward receivers shouldn’t be shooting their project in the feet, by derisking out of their project natve coin. It is counter productive.

@zkcroc

Does anyone know what the state of external funding landscape is now? Zcash could be in a position to ask for some VC funds of our own since the license switch

Great Question.

@GGuy

It’s my understanding the the ecosystem would require well over $10m USD per year to have enough funding available to even begin seriously working on POS again. This proposal provides $3.5m in development funding at $40 per ZEC. I find it hard to believe POS work will be completed in the next 4 years under this proposal.

Once again, ECC is sitting on a warchest of $20 million in others assets with liquidity. The block reward should never be the sole funding mechanism for Zcash work. All of the altcoins that ECC owns today can fully fund the organization for at least 3 years, if not 4.

Boiling my proposal down to annual capital flows based on $40 per ZEC for 4 years doesn’t make sense. I’ve made a few broader assumptions

1. Significantly more valuable ZEC in the years 2025-2028 (lets suppose $100 - 400)
2. Organizations sell-down their huge bags of BTC, Agoric, ETH, Starkware to cover funding stresses
3. Broad re-visioning of ZEC as a valuable asset to save, rather than a liquid, dilutive fiat-like digital coin

@Jgx7

ZEC will have its single digit moment if we continue with the zec is fiat for day to day spending vision. or it could still have its 100x moment if we are successful in a DeFi vision.

yes!

@hanh

For instance, after a year of NU-5, we have arguably the strongest privacy system but hardly any software supporting it.

Exactly. And I am here suggesting that this maligned feature-product situation has been created due to the moral/ behavioral pitfalls created by Free Money (ZEC). With less available Free ZEC, this entire ecosystem will be forced to focus on creating value. (Rather than creating $2 million dollar YouTube videos, for example)