I work as a governance researcher at Placeholder and this is my first post on the Zcash forum. Happy to explain the thought process behind our proposal, as well as provide personal opinions on open questions. I hope the community welcomes the relative newcomer that I am
Thank you @boxalex for your comments and questions.
Yes, the 70/30 split between “Protocol Development” and “Growth Funds” could be written into the protocol. Your question about who decides how the funds are used thereafter is of course absolutely critical and central to our proposal.
As discussed in the initial post by @cburniske, the “Protocol Development” funds could be controlled - similarly to trademark-related decisions - by a 2-of-2 multisig shared between the ECC and the ZF, subject to semi-formalized input from the Zcash community as a whole. Prior to each funding period, both the ECC and the ZF (and potentially other teams supporting development or working on alternative implementations) could publish past progress reports and future work plans that are reviewed by the miners, ZEC holders, and other interested community members with access to various feedback mechanisms that allow them to signal their approval/disapproval and concerns. It is my understanding after attending Zcon1 that both the ECC and the ZF are committed to putting in place the necessary systems for measuring community sentiment and publishing justifications for their decisions.
Could the ECC and the ZF decide against the measured preferences of certain parts of the community? Strictly speaking - yes. But such action would not be without consequences and I would expect both organizations to treat community feedback with great care and consideration. The described governance mechanism guarantees continued funding, but introduces certain checks and balances, allows increased community involvement in decision-making, and democratizes access to the funds. Depending on one’s point of view, it may not feel ideal, but all things considered, we hope it is also seen as a reasonable compromise given our current understanding of the challenges faced by decentralized projects/networks such as Zcash.
We are in conversations with the ECC to better understand this issue.
I agree, although it’s important to note that these allocations are made under a lot of uncertainty. No one can accurately predict the future value of assets tied to the development of innovative technologies like Zcash. Of course the relative percentages don’t tell the whole story in retrospect, but they do provide context for a comparison in which Zcash falls well below the average in the set considered.
Such information should not be too difficult to find, especially in the context of the crazyness of 2017 and early 2018.
I think there are several proposals, including ours, that aim to address this question and suggest ways to improve the management of developer funds.
I think that’s a completely valid opinion and is clearly part of the public discussion/consideration. But let’s assume, simply for the sake of argument, that we decide to spend time digging further into the details of how funds have been used thus far and arrive at a conclusion that it has been done in a suboptimal way and there is considerable room for improvement. Assuming that there’s sufficient agreement for some type of protocol-level funding to remain in place, the next step would be to come up with ways to increase community involvement in governance and improve transparency and accountability, correct? It appears to me that this is what we are already working on.
Correct. It was an interesting suggestion and we thus decided to mention it in our analysis. I will reply separately to concerns raised in this thread about the possible shortcomings of such a system.
In my opinion, community members should be informed about all proposals. This is a good moment to come up with some procedural rules that everyone can accept as fair, thus adding to the legitimacy of the final outcome.
I think having two separate and independent entities (potentially more in the future) is important and, based on my impressions thus far, I see the Foundation’s role as clearly distinct from the ECC. There is obviously some overlap (e.g. in development work) but this is by design. For example, the ZF is responsible for maintaining an alternative implementation of the protocol which makes the network less dependent on the ECC.
I completely agree. The 2-of-2 multisig that was suggested at Zcon1 and that we support in our proposal gives the ZF considerable power. It is my understanding that this effectively includes the right to veto certain decisions that the ZF sees as misaligned with the common and long-term interest of the network as a whole.
We have suggested that funding decisions should be subject to community feedback and approved/justified on a semi-annual or annual basis, potentially tied to the NU schedule. The granularity of regularly submitted progress reports and road maps is an open question. Should a new developer fund be introduced as part of NU4, the most recent Transparency Report (or subsequent ones before the 2020 halving) could serve as the baseline for the first round of funding proposals under the new governance mechanism. The exact details of this can be worked out over time but a basic description of what constitutes “sufficient transparency” should be included in the ZIPs put on table at the end of August.
As pointed out by @sonya, this is not an accurate description of the de facto rights and power the ZF already holds. These would be enlarged under a 2-of-2 multisig system where decisions concerning the trademark and potentially the use of developer funds would have to be confirmed by both the ECC and the ZF to go through. Each decision would be preceded by a community review/feedback period and both organizations would accompany their decisions with a public statement on how/why they arrived at a particular outcome. At least that was my takeaway from discussions at Zcon1 and we’ve broadly supported such a vision in our proposal as well.