Placeholder Considerations: Resources, Governance, and Legitimacy in NU4

OP fails to appreciate the rise in price that is sure to come after block reward halvings. So, saying that a drop from 20% reward allocation to 10% would put dev funding under constraints (at current prices) is very unrealistic.

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I clicked reply to your post on accident. I meant to reply to original poster.

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Thanks @mistfpga for the kind words! Indeed, what a moment for us to get involved. Hopefully we can bring something useful to the table. And we’re certainly here not only to express our opinion but also to listen and learn.

Please don’t feel pressured to reply to this post - I think you’ve summarized your point of view very nicely in previous comments, including in reaction to @cburniske

I strongly empathize with the desire to maintain the hard cap and ensure that the key value proposition of privacy remains intact. But the lack of a mechanism to come to a consensus on issues like the developer subsidy (or whatever else may emerge in the future) feels problematic. To my knowledge, the best way to navigate and possibly reconcile differences in opinion is through more or less formalized rules aka institutions that everyone involved can accept as fair and reasonable. Before such rules exist for Zcash, I’d expect people to spend many hours of their lives on this forum :slight_smile:

To be fair, governance is one of the most difficult problems that exists, and the question of whether there should be a limit to what is subject to change and what is “out of bounds” is one of those perennial moral/political questions that will always stir up discussion.

I understand the criticism but, as far as I know, no one in the world has been able to figure out an ideal polling/voting system. Each system has its strengths and weaknesses and all of them can’t be implemented simultaneously. It seems to me that an elimination poll would at least identify the most widely supported proposal after the least supported ones are excluded. That said, I’m certainly open to other non-binding options, including more experimental ones like quadratic voting.

Assuming that the various proposals result in a set of ZIPs that - as far as we can tell - accurately reflect the preferences across the community, I’m hopeful that developer and growth funding for 2020-24 could be settled with NU4. Of course, I am probably not the right person to assess whether that’s feasible. I suppose that depends on a number of things taking place (or not) over the next 6 weeks. As pointed out by @zooko at Zcon1 and in another thread on this forum, the world is not ending with NU4 and there are alternatives, including extending the time for finalizing ZIPs or settling on a basic rule structure but leaving some contentious parameters open for additional discussion. And further details around governance can certainly be ironed out over time beyond NU4.

Polling/voting does not have to be binding and can be experimented with iteratively. It’s merely one tool among others for measuring community sentiment.

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Hey folks, I posted over on twitter some reasons why I’m thrilled that Placeholder has invested into ZEC: https://twitter.com/zooko/status/1150839509283532802 They are real pros and I’m really glad that they’ve chosen ZEC as one of their main bets. Now they have a strong incentive to make ZEC more and more valuable, and we can all benefit from their incentive. :slight_smile:

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Hi,

I hope so too. you seem to be specialists in areas I am not. which is always good for a tech project. it shows it is developing.

So is crypto, it is rare to find someone that can do both. I certainly cant. Personally I believe everything is open for discussion. There is no “Overton window” for this sort of thing. But there has to be some foundation.

I started that thread :slight_smile:

I think it is even less severe than I originally thought, it looks like (needs conformation from @zooko) but this could even go into NU5

I know it is a reposted link.

That being said. I really don’t have much to add. I will be watching and trying to learn some new things myself.

Technical zips are easier to assess than political ones. heh.

Thanks for the thought out reply. I will not derail this thread further. let me know if I can help in anyway.

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I made some minutes ago a proposal which adresses most if not all of our current foundation dicussion here, mostly even more.
After our conversation/discussion regarding the foundation “independence” i thought it’s worth making a formal discussion out of it in the form of a proposal which is open for further and other thoughts, input, suggestions … Maybe this would be a better place to discuss the issue further.

Reading now your above post again i think it’s ok to highlight some valid points you made:

Actually after a longer thought i came to the conclusion that the most fair approach would be to have people in the Foundations Community Governance Panel that have NO voice & vote allready elsewhere. In the concrete example this would mean Foundation board members should not be in the govarance panel as they have a final voice & vote in the board decisions they make. Same goes for ECC employees & founders. I think someone can safely come to the conclusion that their voice & vote & contribution is allready included in the ECC formal stance regarding a protocol change, idea, suggestion, decision, whatever.

In contrast your and my voice & vote & contribution doesn’t have this option to influence whatever.

No, i can only make suggestions that might be good, might be reasoned, might have some sense or in this case especially raises concerns. It’s not to me to decide whatever. I’am a huge fan of the german doctrine that only “positive” critice can lead to improvements. Who & how improves things later is not up to me alone, neither should it as i’am a human with flaws and mistakes by nature as well :slight_smile:

This is a very valid point i try to adress in my Foundation Governance Proposal. In the case of the ECC i think they allready have a more than powerfull structure. They are the main developers, have main influence, main activity, the main voice, the main vote, the main funding, actually the main everything.
Having this in mind i think it’s missleading IF we talk about the ECC as it has no voice IF it’s not represented in the foundation’s board and/or the foundations governance panel. That’s simply not the case. As you call it “denying them a voice” is simply wrong in my opinion as we talk about here about a structure that should balance and maybe even oppose exactly THEIR voice.
My suggestions exactly aim for a good balance of power which in my opinion right now is currently everything else but not a good balance of power.

Let’s make an abstract but simple example:

In the US you have the Republicans and Democrates, right? One of these has the majority of power after elections, currently the Republicans while the Democrates should at least try to balance, overview, control here and there.
Now my how much independent would you see the Democrates IF:

  • they are funded by the Republicans
  • 2 of the 5 democrates party board members are as well representatives of the Republicans
  • the democrates party governance panel includes let’s say 15% Republican representives

While this might be a more than abstract example i think it illustrates the conflict of interest very good.

I absolutly agree to this and that fits exactly my point and personal vision how it should be. Actually it should include even a much wider implentation of different interests as it currently has, especially as said allready voices & votes & contributions from groups that have no platform. Hence a possibility of limitation for the ECC has these allready have the strongest platforum for their voice & vote & contribution, the Zcash blockchain, the protocol, the funding, the everything.

This is absolutly NOT correct and should be a main concern while claiming the Foundation is independent and soley seperate:

  • Foundation Board of Directors: 2 out of 5 Foundation Board Members are ECC Zcash Founders ( Matthew Green, Ian Miers)
  • Foundation Community Governance Panel: The following ECC affilated person are as well active in the FCGP: Daira Hopwood (ECC), Jack Grigg (ECC), Sean Bowe (ECC), Simon Liu (Ex-ECC), Gordon Mohr (ECC Advisor), Christina Garman (ECC Zcash Founding Scientist), Eran Tromer (ECC Zcash Founding Scientist), Ian Miers (ECC Zcash Founding Scientist), Matthew Green (ECC Zcash Founding Scientist)
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@mlphresearch is correct when saying that ECC and ZF are “staffed with different individuals”. Matthew Green and Ian Miers (the overlap you are referring to) are not employed by ECC (source: ECC employees page).

Whether or not ECC and ZF are “independent and solely separate” is a broader question, but IMHO hinges on whether or not the decision-making process of one organisation can be controlled by the other. Advice is not sufficient to create a dependency, because the decision-makers should be seeking a variety of advice to base their decisions on.

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And they are not share holders in the Electric Coin Company (ECC)? Just to clarify things.

Edit: I was so far under the impression that the founders are as well share holders of the ECC, maybe i’am indeed wrong here. Hence asking for clarification.

… the stakeholders in Electric Coin Companyfounders, investors, employees, and advisors…”.

That’s the reason why my assumption is that the founders are shareholders in the ECC.

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Thank you all for your reactions thus far!

We covered a lot in our initial post, throwing out a bunch of half-baked ideas, and possibly making an already difficult topic even more complex. Our next step is to work through the comments, as well as discussion around other proposals, and distill our ideas down to a more concrete and digestible format that could serve as a starting point in case there’s sufficient support for turning it into a full-blown ZIP.

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A note for all reading — @boxalex and @mlphresearch among others continued discussion of the Foundation in this dedicated thread: Proposal & Possible Changes in the Foundation Governance

The link was posted already in one of Alex’s replies, but just in case anyone missed that.

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It is clear that at least some community members are open to the idea of continuing with a block reward based funding mechanism even after October 2020. But I’d be interested to read what folks think is the most appropriate duration for such a solution, all things considered.

  1. Indefinitely, i.e. until block rewards run out altogether?
  2. Until the second halving in 2024 so that the issue can be revisited then, if need be?
  3. Decrease gradually according to some predefined schedule?
  4. ?

To me, intuitively, the second option feels most reasonable. Four years is enough to make plans and get a lot of work done. But a lot can also change in four years, so it makes sense to force a reconsideration of the whole question.

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Option 3 fits nicely with my idea so I’m somewhat biased.

I’d quite like to see funding from block rewards synced with the NU cycles, ie: pick an appropriate start/end block, amount per block & maybe change the amount over time (ie: more up front & reducing, or the other way around)

It makes sense for funding to become part of the ZIP process for each NU.

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@ChileBob I agree that it makes sense to connect funding cycles with the NU schedule. I now realize that our proposals are indeed quite similar in principle, although they were not flagged as such here.

One concern I have is that perhaps the ZEC that would accumulate into a development fund between 2020 and 2024 is sufficient to last even beyond the second halving? Given that such things are impossible to predict, perhaps it makes sense to guarantee block reward funding only until 2024, distribute funds for research and technical work one NU at a time (plus a separate grants program for valuable non-technical initiatives), and reassess the situation prior to the second halving. This may sound unattractive now when everyone is perhaps a bit tired of discussing this topic. But again - a lot can and certainly will change in four years.

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I think there’s a benefit for revisiting this each NU, it makes it a normal thing and offers a direct connection between funding & new features, but thats just my humble opinion.

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@mlphresearch @ChileBob I would love to see you work together to move toward a ZIP!

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@sonya Our goal is to have a draft ready for initial review by early August!

@ChileBob and anyone else who finds the idea of a block reward based funding for 2020-2024, combined with a more open and inclusive governance process, a reasonable path forward - don’t hesitate to keep sharing ideas or PM me if you’d like to help out in drafting a ZIP.

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Hi,

It is really cool you are getting it in early. I intend to do the same with mine. One thing I would like it if you could address in your proposal is the mathematics of how much of the total supply the community would be expected to donate on top of what has already been donated.

ie they FR has received 2.1 million coins by 2020. 10% of the total supply. How much more would it be, because if it continues indefinitely they will receive something along the lines of 32% of the total supply (very rough calculation) - This is not block distribution and could have real consequences.

For me this is a really important point of any proposal that is designed to take from block distribution rather than block reward.

Thanks,
Steve

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I do think a development fund should be aiming for a set period time (not indefinitely) for several reasons, such as re-evaluating if the funds are being used effectively. However, I don’t really see why the re-evaluating period (ending blockheight) should have to coincide with the block halving schedule.

I purposely chose a set period of 11 total years of funding in my proposal to make Zcash “good” (ie, fast, scalable, adopted, etc.) and to avoid complacency. I did some calculations, based on the suggestion of 9% for 7 more years:

  • Founder Reward of 10% of total supply = 2.1M ZEC
  • Development only plan of 9% over 7 years = 641,650 ZEC
  • Total ZEC allocated 13.05%
  • Total monetary supply unchanged

I think that an additional 3.05% of the total supply of Zcash for development is a reasonable amount that the community could support. Feel free to use these numbers in a proposal if you want, I have withdrawn mine due to implementation challenges.

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Hello everyone, i’ve been following the thread pretty closely lately. Looking forward to see how things conclude in the coming weeks. If i can mention one of a few concerns with the FR situation, but wouldn’t a renewal of FR keep adding more sell pressure to the price of ZEC given that both ECC and ZF need to keep funding operations? Not to mention some miners selling tokens to pay their monthly bills?

I think it’s important to cover all details here, as the current performance of ZEC isn’t so hot right now relative to the market. We also have a very big year coming up with important catalysts, and it’s important that ZEC stops the passiveness and starts capturing market share. Far more opportunities for business growth, tech growth, and awareness emerge with a healthier price, not to mention a stronger growing community and less haters taking turns at us.

That being said, let’s not screw this one up :slight_smile:

Cheers!

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This is going a bit off-topic, so If you want to discuss further I suggest a separate thread, but the weight on ZECs value you are seeing is due to the extremely high rate of issuance of new coins (inflation is at 42%) not due to selling pressure from the ECC or Foundation. The market has to absorb $500,000 worth of new ZEC every day. This will drop to 13% after the halving next year.

I don’t think the continued development funding conversation should be influenced by market value whatsoever. It’s literally impossible to predict.

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