Manufacturing Consent: NoamChom's Nu6 Block Reward Proposal

I would say the crux of your argument hinges on those specific questions. Otherwise, it’s mostly a skeleton proposal of 1014 where the actionable items are not defined because they most likely amount to threatening legal action against a business entity for following business ethics. This is a throwback to 4 years ago.

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As a means of letting the protocol manage the ZF and ECC treasuries, sure I get your point. It isn’t really possible.

What I’m putting forward is an ideological position. If the position holds a lot of global ecosystem support, but the ECC and ZF decide to still go about their merry ways - buying and trading altcoins, at the expense of ZEC users/ investors… then so be it. It would be a break of trust, in my opinion.

I am not proposing that there is an NU6 technical solution to control block subsidy receiver funds. I’m proposing an ideological position that should hand waving be actionable, based on continued reading of Transparency Reports.

(See updated wording in the original proposal)

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It is not about only privacy. This is the flaw in the ZEC is fiat for day to day spending vision. People need stability (SOV) and privacy. ZEC can not provide stability under any scenario and therefore it wont work as a fiat for day to day spending as a primary use case. It only would work if it was accepted as a SOV first. Its a little bit of a chicken vs egg. But BTC seems to have taken the better approach by focusing on BTC as a SOV first where around 80% are holders (savings) and 20% are either spending or trading.

ZEC is not a viable asset for day to day transactions as we sit here today and because of the track record its going to be hard to gain the trust back. We need solid, trustworthy products to get us there. Stablecoins are the solution for day to day transactions. So in my view we have not focused enough on the blockchain and DeFi. We have focused too much on wallets and media promoting a use case that wont work. The price of ZEC compared to the DeFi hedges speaks for itself. The market has it right on the ZEC price and we need to listen. We can already see market demand is low for ZEC, it has no depth, and its highly volatile; its not because we don’t have enough wallets, and its not because we cant spend it (ZEC is already available to spend for goods in 45,000 stores in the USA alone, and its going to ramp up to a much higher number with AMP/Flexa/Anvil very quickly). If ZEC did was its supposed to do, we would not need to hedge into other DeFi projects, we could simply hold ZEC. But we cant. Having great privacy is not enough.

We have not been on the DeFi path ever. When ZcashD is deprecated, that will hopefully be the start. But to be considered DeFi I believe we need programmability. What you are proposing is the same path which is ZEC is fiat for day to day transactions. The maintenance to support this ecosystem as we are seeing today is crushing and it collapses under its own weight.

They are already doing this by using the tech we gave away for free. We need to restart/Zeboot and move faster towards a DeFi ecosystem. We can have 1,000 single asset wallets and it wont make a difference than if we had 1. MetaMask is the proof here. It can handle 10s of millions of users with one wallet. Paypal is also proof, it has more than 300m users with 1 wallet. There are countless examples that are proof we only need 1 wallet.

Just as important, the DeFi vision does not hurt the ZEC is fiat group because we are not contemplating changing the attributes of ZEC; in fact I would like to codify it and make its attributes of ZEC even more secure as it relates to the 21m cap. What the DeFi vision does is create a real ecosystem and open up development beyond the orgs. No matter how much money the orgs spend on media or wallets, it wont change the nature of ZEC as an asset. We need privacy based stablecoins and DeFi to gain the trust of every day people if the goal is to bring privacy to the masses.

one solution here is to redistribute the gains on these investments back into the ecosystem. So, no single organization can benefit from the seed/angle investment for itself only. The org making the investment can keep its original investment plus gains, up to a max of 6 months of block reward funding. The rest get air dropped back to ZEC holders or some other mechanism to get any windfall profits back to ZEC holders who provided the capital to make the investment.

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The generic term comes directly from the ZF mission statement, the keyword is primarily. Also see innovation and cooperation, here

I know it’s easy to bundle everything under one, big Zcash umbrella, but the ZF and ECC are completely separate organizations, so try not to think of them (better adverb needed) as the same entity.

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It does work, but thanks for your opinion! I’d love for you to create a video explaining how stable coins are the only use case for digital decentralized money, help us see why privacy is a second class citzen when most of the world will be stuck on TradeFI because of … , checks notes , … arbitrary rules that change on a whim. :kissing_heart: :grimacing:

In your opinion, just how captured is BTC/ETH if it is stuck on a supervised permissioned wallet? Why are we slowly but surely loosing options to hold keys? Do you even care about these questions?

And before you accuse me of being anti-american,

I even created a video discussing stables , because it is a use case. I just have issue with your insistance of them being the solution. It’s an option that can work, that is it.

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My insistence stablecoins are the answer is related to a currency for day to day transactions; not over the long term. ZEc could and would work a a SOv over the long run. When i say it won’t work, i refer to 90% of the world who get paid on friday and spend 100% of their income by the end of two weeks until they get paid again. zec is too volitile for them. even if a person doesn’t get it intellectually, real world experience will teach them quickly…Zec is for savings and stablecoins for spending and privacy works on both. but some jurisdictions might need a “privacy lite” solution. the privacy lite still helps most people.

To work as a currency for day to day transsctions, many things are needed a) collateral is what keeps it pegged to a unit of value. it pegs it very well for 1-2 years to maintain purchasing power and depending on the collateral may stop so well. Again it depends on collateral and certain other factors. This creates a SOV which is missing from ZEC. b) privacy c) transaction speed. to work at scale it needs to clear in milliseconds. AMP/Anvil protocol has this part wired. Fortunately we are working with them. d) trust. need to trust the ecosystem. right now, i think zcash ecosystem is less trust worthy than any goverment system or TradeFi. But that can change. e) many other factors that can positively or negatively affect a currencies value (contract law, culture, etc).

Privacy is one important element of a bundle of attributes needed. You think because something is private that makes it good. that’s simply not the case. zec price is not being manipulated. it simply has no objective anchor and very little utility. by focusing on ZEC as a currency for day to day transactions it causes
a marketing message that is not aligned with ZECs basic attributes. So ZECs volatility won’t go away making it not a good day to day currency. but if it was to be volitile; yet increase in value over time like bitcoin, it would work as a long term store of value.

ZEC will never work as a fiat replacement for day to day transactions. Of course it’s my opinion. I think it works great as digital gold like BTC.

It’s up to the wallet creator to decide the use case. we should focus on the blockchain and blockchain assets. that is Zcash competitive edge. we should create a gas/fee ecosystem so wallet developers
can fund their own use cases. As i said before, if Zcash focuses on the edge use cases at the expense of blockchain utility, i think the downward trend continues. the only positive things i can see is improvements
to core blockchain have been made and a) we have funded qedit and ultimately i think we get there even if many in the community fight it (its on josh roadmap yet still not prioritized as much as i think is needed) and b) the halving will reduce supply.

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Thanks for posting a proposal @noamchom !

I have some rebuttal arguments against the “they have money already” argument that justify the share assigned to ZF and ECC

Unpopular opinion: ZF did a correct investment diversification. If there is an attack on zec and its prize tanks. ZF would be the only org with a diverse portfolio to resist and try to save ZEC

Speculative and not based on real info opinion: ECC Invested and seeded other projects that have very little liquidity at the moment. they might not be able to dump their tokens and shares on without risking to be sued the hell out of existence. :cold_face: people complaining ECC dumps zec to pay for development will then complain even louder because they will have to do so to pay for lawyer expenses :melting_face::melting_face::melting_face: instead of development while ZEC ticker goes down because ECC is a foundational part of market’s confidence on ZEC

That being said. I welcome that this proposal includes both QEDIT and Shielded Labs

It would be interesting to have the non us FFP thing as well in the future

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What do you mean by “work”
Zcash value is down
Zcash usage is down
Zcash user experiences have been a crap shoot for years
Zcash network full node count is down
Zcash brand perception is down
Zcash development team treasuries are down

What do you think is “working” about the path that has been taken in the past few years?

(“The path” as in - many wallets doing the same thing, many spin off Zcash based social media sites, plenty of educational contents, increasing technical challenges to running a full node, et al)


As I’ve made clear for a while, my opinion is that the past 4 years demonstrated that Zcash is on the wrong path. That means we need a narrative shift, we need to focus on building different things-differently, we need fiscal responsibility, we need to stop wasting resources reinventing wheels/ double working, we need to clean up the “Zcash” brand


I’m treating them like they’re all the same because the context here is that they’re all receivers of the Zcash protocol block reward. (If they want to stop taking block rewards, then that would open up the need for a lot of nuance in how they’re regarded)


Correct. But it is sad that many here in the forum don’t understand this yet. The market is a system that takes human behavior/ capital as inputs, and distributes wealth according to where the most value exists. (I’m not touching on speculation here, that is a different topic… the casino topic)

What does this mean for ZEC? ZEC needs a radically different value proposition, if we ever could hope to see this project/ network/ user base grow up into the mainstream


In theory, I like this, but in practice it is probably impossible.

In a roundabout way, this seems like celebrating after your house burned down… because you had the good intuition to add a fire insurance policy in the month prior.

All of your personal belongings are scorched, but thankfully you had a stash of BTC in a safe deposit box.


Again, I just don’t follow this logic. By divesting out of ZEC, the big two organizations have damaged the long term value proposition of the entire project.

What is the point of the ECC, when all that we can cheer about are their StarkWare and Agoric seed investments paying out a 1000% ROI to the Bootstrap Project Board of Directors/ to C-level roles at the ECC? That isn’t what was signed up for during the 2019-2020 block rewards debate as far as I’m aware.

These organizations pitched themselves as advocates/ builders for the Zcash project, then turned around and pushed their block rewards into other speculative altcoins. All while we’ve lived through 4-years of Zcash delivery delays, staff turnover, technical issues, et al


My proposal is here to acknowledge that despite countless mistakes, Zcash still can’t afford to lose the ECC or the ZF. We’ve got to keep both organizations, but we can also acknowledge that more strict policies could be put into place that would inspire these organizations to do more to support Zcash, rather than supporting the competition or their Boards of Directors/ holding companies.

I also believe we need to open the doors to a couple of international organizations that have competency in the Zcash Ecosystem.

Shielded Labs - Switzerland
Qedit - Israel

ATTN: @_jon @vivek @aquietinvestor

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It is not a celebration. That interpretation is yours only. ZF did a correct risk assessment and took actions to mitigate risks. Every serious privacy advocate is talking about a second wave of crypto war coming for privacy preserving cryptocurrencies and Zcash happens to be the pioneer project on that front. Continuing with your insurance analogy, no one celebrates having to make use of an insurance policy, but I haven’t known anyone regretting having one the moment they needed it.

OTOH, wrong risk assessment lead to the spam attacks being possible around four years after the core protocol engineers had indicated its feasibility. We zcashers didn’t have any “Insurance” for that. We all know how that went.

I welcome criticism introduced in the proposals. The “they have money stashed” argument does not seem a very constructive one to me. Pretty much the opposite.

I would appreciate you quote whole paragraph. I’m remarking a possible scenario of ECC being mandated to “dump” theses assets that will be totally detrimental to Zcash as a whole which totally defeats the purpose of your proposal.

That’s all.

I am aware of the fallacy of the fallacy, which is why I read your things, but this absolutely is false equivalence and your arguement is invalid.

Seems that we have different levels of sophistication at abstract thinking.

I’m abstracting the ZF, ECC, ZCG, or any other entity that wants to receive block rewards into the same object type.

You haven’t got to understand the concept, but calling it a fallacy isn’t nice.

A logical fallacy, more accurately. While the argument might make sense (to you, or others), it cannot be valid if the form is not valid.

This is called derailing, and is violating the forum policy.

What argument are you suggesting that I’ve made in the proposal, that is logically false?

The one that I quoted and mentioned earlier about conflating the ECC and ZF. You’re drawing a false equivalency based on an oversimplification.

It’s applicable because of what I mentioned earlier about the crux of your argument and enforcing banning things that for-profit entities decide to do. With the ZF we have that now, we don’t have to worry about it. And so therefore you can not conflate these different entities based on one simple little thing. That’s all I’m saying. I apologize to get your feathers ruffled.

This is a proposal for the 4 years ahead. In the context of who gets the block subsidies, my proposal doesn’t explicitly care about whatever nuances you think matter between the ZF and the ECC.

You might think there are nuances that matter, but this isn’t your proposal.

This was a good criticism of how the proposal is originally written, I gave the implication of some actionable/ enforceable treasury management by this proposal. I didn’t intend that sort of direct involvement (it is not possible), so I’ll work on updating the language above for clarity. I already acknowledged that you were correct to point out the impracticalities of trying to make anything enforceable.

The revised concept in this proposal is that block subsidy receivers of the past, present, or future, would be held to a gentleman’s agreement where if they want to continue as block subsidy receivers; they would take good-faith actions to reduce exposure to competing altcoin project assets, and would not engage in any new forms of speculative altcoin investing with the ZEC block subsidies.

That is it. A gentleman’s agreement about what is desirable vs. what is not.

ZF has what it has now, correct. It is a non-for-profit entity though(?)

If my proposal gains traction and becomes the community preference, then ZF would find itself needing to change its behavior, while establishing a good-faith path for risking out of the BTC & ETH positions (the same would apply to the ECC with their large BLD & STRK positions).

They could chose not to, it would be a break of trust with the ecosystem, but it would not create anything actionable based on this proposal.

Hypothetically speaking if Qedit and-or Shielded Labs accepted, and became block subsidy receivers, then we would also keep track of how they were applying their block subsidies to Zcash.

If we found that those two new orgs were taking in their ZEC, and then swapping them into BTC/ ETH/ STRK/ BLD, then it would be a break of trust, and would put their status as a receiver in jeopardy also.

I’ve updated the original proposal wording based on feedback thus far:
1 - increased Qedit’s allocation to 2%
2 - specified details (RE: no actionable means are created in this proposal to manage treasuries of block subsidy receivers) about the use of ZEC rewards for speculation/ angel investing
3 - noted that obvious violations to requirements in this proposal could result in block subsidy removal via TBD NU

Point #3 is an emphasis from the original text in ZIP-1014:
It is expected that ECC, ZF, and Major Grant recipients will be focused primarily (in their attention and resources) on Zcash. Thus, they MUST promptly disclose:

  • Any major activity they perform (even if not supported by the Dev Fund) that is not in the interest of the general Zcash ecosystem.
  • Any conflict of interest with the general success of the Zcash ecosystem.

What else can be said? Sure 2018 was a long time ago, and we all understand that seeding crypto projects typically involves long lock up periods. This chart does not look like primarily focusing attention and resources on Zcash


Exactly… they have strong altcoin holdings today that have notably outperformed ZEC, because in large part this was possible at the expense of ZEC/ ZEC holders/ Zcash project sentiment/ Zcash adoption


I agree with these estimates, hence the update of Qedit from 1 to 2%


Emphasis to these

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I like that you are adjusting. I really would like to see you take it further as it relates to Qedit, as I think we need a new org focused on more proven real world use case applications. So we need to derisk Zcash and start developing much more in line with how the organizations are investing: We need to start hedging development.

The existing orgs fund non Zcash projects that are much more aligned with a real world product market fit; but they wont build the same functions into Zcash (namely Ethereurm, Bitcoin, Starkware). So, instead of hedging ZEC block rewards where the orgs are the key beneficiaries when they buy into these third party projects, we need to hedge development that results in a benefit Zec holders (IE ZEC value goes up rather than organization trading profits). By that I mean we need an org whose ideaology is to work with and develop products that work for people regardless of their location, ideology, or anything else: an ecosystem agnostic to politics and for people, technology that can be used today, and develop more of the functions the organziations like to fund outside of Zcash and bring those development projects onto the Zcash blockchain (we need DeFi). We need to build bridges to help the existing legacy infrastructure transtion to the blockchain; not islands that have no way for a transition (ethereum is great at building bridges). I believe all of the projects we invest in are designed to work inside countries and in compliance with local laws. We need to hedge and develop accordingly while also providing the highest and best privacy to users. We are funding projects that have programmability, stablecoins, layer 2 blockchains, DeFi, use POS, that are compliant and more…The result, orgs we have seem to be better at buying into other chains than development on the Zcash Blockchain (possibly the ideological filter gets turned off when they invest and we need the same for Zcash development). Their investments go up, while Zcash goes down…Its been a good trade for the organizations; and a bad trade for Zec holders.

So, one way to fix this is eliminate ZCG as an independent org and let the ECC and/or Foundation use ZCGs services as project managers (so we give more money to ECC/Foundation which they have the option; but not the obligation to fund projects where ZCG can manage such projects on their behalf. We need the flexibility to reduce spending on non core projects and we currently dont have the goernance to contract spending in this regard), and hire Qedit to be focused on real world applications (ZSAs, stablecoins, and more).

Separately, we fund these third party projects (and Im really thinking about Stakeware). So when they need money, we provided it to them. Now that we need money and the token is liquid, what do they do? They added lock ups so we cant sell. They care about their ecosystem and the price! They know selling hurts the price. We need to care more about the Zcash ecosystem.

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Would love to see Shielded Labs come to life. @aquietinvestor any update on this?

As well as Qedit @_jon commit to Zcash full time sometime in the future.

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Sentiment [re-poll/ with updated ZIP list]

Given the option to only have one, I support the following block subsidy proposal:

Adding some thoughts here, that were lost (and to a tiny audience) earlier in the Zcash Discord. @joshs shared a question along the lines of. How are you confident/ why recommend 2 new organizations that have yet to deliver tangible work to the Zcash project/ protocol layer.

Context here being Shielded Labs, with 3 ongoing network upgrade research initiatives, and Qedit which has past and ongoing ZSA/ asset swap related research and development

In short, I’m of the opinion that these 2 orgs are uniquely qualified to receive this sort of trust from the ecosystem, while I also note some details their respective 1% and 2% block subsidies are intentionally small. Only if ZEC rallies up to $200-500 in the next 4 year cycle, would their %s represent quite over sized funding streams.

At 2% for Qedit the income monthly is about 1000 coins (~35 coins per day, times ~30 days), and Shielded Labs 1% is half of that. With a ZEC baseline of $50 (100% higher than today), that monthly income would be around $50,000 per month for Qedit and $25,000 for Shielded Labs. At today’s ZECprice, those are merely $25,000 and $12,500.

Those incomes line up to be about enough capital to retain 1-5 full time software R&D manager(s) and-or technician(s). I am comfortable with recommending the risk of retaining a handful of new Zcash SMEs, in two organizations extra-ECC/ZF via a new block subsidy.

If ZEC instead held an average value of $500 (rather than $50) over the upcoming 4 year halving cycle, then I’d take the blame for over funding these two new orgs…

My funding recommendations for these orgs is intentionally low because I assume that they would also participate in grants related work over the course of the next 4 years. I’m assuming that in-sync, continuing grants work is how transparency, planning, and accountability would be held against Qedit and SL throughout the 4 year cycle.

Again, I’ll also stress that these recommendations are totally contingent on Jonathan (Qedit) and Jason (Shielded Labs) having full interest/ committment in ironing out the details, accepting the marriage proposal so to speak.

Broadly speaking, what I’m aiming for is 2 new, non-US organizations to be the next Zcash SME hot spots. We all know and love the Foundation and the ECC for their invaluable SME, to begin to distribute globally, my opinion is that a indiscrimate funding stream can help assure participation.

With grants only, it is possible that Qedit or SL ultimately look elsewhere if Zcash headwinds remain strong/ ecosystem sentiment shifts away from ZSAs/ emission smoothening/ ZSF/ ZSF funding economics. It would be sad to have 2 organizations close to breaking the SME inertia point, who then end up going elsewhere (or disbanding).

Welcoming 2 new orgs is a huge wager of trust, I understand that. But given the relatively small economic incentive that I recommend, I hope that the downside risk feels balanced. I’d also like to specifically state that I would be recommending a technical solution here, that could act as a stop gap if circumstances/ sentiment shift significantly.

Zcash Foundation should act in a similar capacity as it does for ZCG today, for Qedit and Shielded Labs, should they accept this model. Meaning, ZF would receive and custody their ZEC, and then use a non-discretionary process of distribution to Qedit/ SL. This would ideally create less address hard-coding into the NU6 upgrade… Again, there is an assumption here of @Dodger willingness to accept this expanding responsibility at the Foundation.

Overall, I like Josh’s proposal a lot, and GGuys, I don’t mind simply letting block rewards expire either (my older first preference), or renewing them exactly how they are… I conceived and presented my proposal because I feel that this ecosystem needed to ask itself the question, what do we think about something similar to today as-is, but broader and with a dash more austerity

To the topic of engineering an ambitious new governance/ grants model, I also love the idea but I’m not convinced that it can be started and completed in the next 18 months (~6 months to halving + 1 year extension). I think that a governance/ grants framework is necessary, but we risk biting off more than we can chew by associating it with hard calendar dates and coin/ treasury economics.

The roadmaps of ECC, ZF, Qedit, SL, are already ambitious enough for the next couple years, without even speculating about the (negative) impact from engineering a new governance/ multi sig grants model along the way as a toss on.

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