Placeholder Considerations: Resources, Governance, and Legitimacy in NU4

As you formulated and wrote a very well written proposal, or condiderations as you name it i hope it’s ok to ask some questions and comment.

1.) Currently with the Founders Reward the Founders/Employees receive the Founders Reward and than donate a percentage to the ECC. In my opinion this is an interesting experiment but it has more flaws than it has positive points. What would be the distribution of a new developement reward? Same?

2.) Isn’t it of any concern for “placeholder” that there is an ongoing law suite with an ex-employee where shares/distribution of the Founders reward is part of it? And of course the dilution of the founders reward towards ECC?

Nic’s whole research is a must read and we can find a lot of usefull information there, without doubt. But there is as well a lack of deeper or wider research, mostly because it’s from 2017.
Some questions that arise with the cross -sectional survey I and II are:

  • it doesn’t sum up how much a given founders reward, ICO, whatever funding, has generated in US$.
    Means in theory a given ICO at the start of 50% (just as an example) could have generated $10M for example, but a 5% continous Block Reward (Founders Reward) could have generated $500M. As ssaid, just as an example. This means while the percentage of Nic’s Chart than back have been mostly correct than back it doesn’t tell us anything about the amount of funds a development team has received to reach it’s target. Without this factor this chart has only limited value.

It’s not that easy for the community. Just because someone or a group of people doesn’t like the whole idea of a contioued dev fee, and/or propose to consider other funding sources or even a hybrid mix of different proposals as well shouldn’t mean exactly the Ycash one-man-show should be the alternative.

+1, absolutly agree on this one. This should be a MUST having in mind the importance of such decision.

A project without own tech can’t be called competition seriously. Just as a sidenote. If you replace Ycash with another privacy project and own tech like Monero i fully agree of course.

How is this provided and controlled havine a for-profit company as the recepient with limited transparency? An important factor in the whole dev fee discussion (at least for some).
Why not the foundation with bigger transparency options having the recepient and having the foundation allocating needed funds to the ECC? What are the arguments against this variation to ensure proper governance over treasury and control from/through the community?

There are several points why i don’t fully agree to this argument:

  • When the ECC run with a deficit the ZEC exchange rate was $60 or lower if i remember right, currently we are $100.
  • With the current Founders Reward there are expenses that shouldn’t be anymore the case with the new dev free, for example advisor, early founders and so on … This should mean more funds in % are available for the ECC development anyway compared to the current situation with the Founders Reward.
  • The halving won’t cut only block rewards, there is a big chance, even i’am not yet a believer of this, that the effect would/could be compensated by a price rise. Or at least partially, which again would lead to at leat partially more funds available for the ECC even if it’s just 10% or any given number.

Of course we do not know where the price goes so it could work out either way. Having way too much funds available or not enough funds. Wouldn’t here some kind of dynamic funding system versus US$ fit better and have the ECC safe? For example the Dev Fund gets adjusted monthly and correspondents to a $1M value per month from the generated dev fund. $1M can be replaced with whatever value the community thinks is fine.

Makes me remind Nic’s figure 4:

Any improvement to this governance model or should it stay like this?

+1, absolutly agree on this one!!!

It was an interesting read for sure, no matter i don’t agree to some points or have some concerns, much if not most makes just sense. Interesting to see if there will be indeed a discussion.


Hi @cburniske, thank you for contributing to the Zcash community!

This is an excellent post and I really appreciate how you’ve positioned Zcash within the ecosystem for context.

I hear you that participating in the ZIP process seems like it may be too heavyweight or involved. In fact, that’s a concern expressed in many of the dev-fund related proposals found in the protocol proposals section of the Forum.

One of my intentions is to ensure that we don’t let the ZIP process be a barrier to anyone in the community formulating and advocating for their own proposals, so we’ll be reaching back out to you and other proposers to simplify and clarify that process.


Thank you for these. Below I address most all of them, in order:

The distribution of a new development reward could be 70% Protocol Development Fund (2 of 2 multisig for now), 30% Growth Fund (2 of 2 multisig or sleeved into ZF Grants Process, with more experimental structures available). The 70% Protocol Development will be open for ECC to apply to, as well as the team from the ZF that maintains Zebra, not to mention any other full node implementations in alternative languages. As mentioned in the doc, “Security audits and any other expenses strictly related to protocol development should also be covered by this pool,” which is likely another independent set of entities.

The 30% Growth Fund is then even more widely available to the public, with Decred’s Politeia as a good example of what is possible here (sans the protocol / Company0 proposals that go through Politeia).

(this is all described in more detail in the Stay the Zcash Course: 80% to miners, 20% (?) to builders, evolve fund governance section)

We can discuss with the ECC the current state of affairs, but atm this is not a concern.

Nic Carter’s Research

Re: your points for improvements of Nic’s cross-sectional survey, I appreciate the thoroughness but am going to leave that conversation for elsewhere :slight_smile:

Fair enough, I agree a community divorce/fork is tough and shouldn’t be referenced as an option as casually as I did.

We agree. IMO the series of elimination polls for boiling down to the community’s proposal of choice is one of the most important recommendations we make about a practical yet accurate approach to distilling the community’s preference****

Wasn’t my suggestion, was Mario’s (Placeholeder’s Governance Researcher), who may have got it from somewhere else…

For legal reasons the ZF does not want sole discretion over the movement of the network’s funds, therefore it has to at least be a two signature situation. We think having the ZF and ECC vote together is better than just the ECC, and do not believe the ECC has “captured the ZF.” In cases where there is a similar Foundation + for-profit Core Company structure in crypto (which we all know is common after 2017!), Zcash’s Foundation is one of the most independent Foundations I’ve encountered in crypto

Beyond that though, you are getting at important points. I do think we should push for the Growth Funds to be more decentralized in their governance first (with a path to on-chain voting?), and then move on to further decentralized the Protocol Funds second (perhaps with the Growth Fund model which has by that time been hardened within the Zcash system).

Part of Placeholder’s push in this proposal is precisely to increase the controls and transparency of resource flows within Zcash. This is not to knock the effort thus far, ongoing examples (with the Q2 2019 Transparency Report a good recent one) are part of what convinced the Placeholder team that the ECC and ZF are committed to credibly evolving the governance and transparency of the system over time, and thus got us involved.

You raise a few points but they all seem to boil down to fear about an inefficient allocation of ZEC (either deficiency or excess). I think it’s an interesting idea to have a dynamic monetary policy based on USD spend of the different entities tapping the funding pool(s). That said, my fear at this stage is dynamic but automated monetary policies are still at the forefront of research and I’m not sure that this coinbase reward epoch is the right one to try to implement such an approach. But maybe funds could be allocated from the Growth Fund to R&D around this effort (or would it come from the Protocol Fund? Guess it’s at the applicants discretion…)

A second option, though not as nifty as yours, is the fixed division of resources again between hardware (miners) and software development (builders). I like sticking with this (for now) for its simplicity, and also time-consistent assurance to different economic agents (this includes both the miners and builders) of the resources they stand to gain from contributing to the system.

We cannot possibly speculate on ZEC’s price with precision, but we can know the budget of the teams pretty well in advance in USD terms. My thinking is after each period, and in a macro sense at the end of the 2nd coinbase reward epoch, if there is a situation where either fund has leftover ZEC, then it will just roll over into future years of allocation. The funds are never zeroed out (nor are “investment allocations” given past this 1st coinbase reward epoch, as we reference). I think it would be healthy if we start to think of and work towards these funds as endowments - eventually they need to be designed to compound capital, dole out interest without drawing down the principal, and support Zcash for decades (centuries?) to come.

Love this graphic, think it can be a helpful reference as we work towards NU4, but FWIW I don’t think Zcash is a benevolent dictatorship. As much as Zooko is revered in crypto, there are a lot of rockstars on the Zcash team, and as noted prior, the ZF is stolidly independent.

Okay, I think that’s everything of greatest relevance (for now) - thanks @boxalex!


thanks @nathan-at-least! we’re happy to explore the ZIP process, but also don’t want to jam anything up on account of being relative noobs to the Zcash process.

That said, if you could have DC connect us via email that would be great.


Chris, the ZIP process is described in depth here:

It’s a lot to dig into, but pretty thorough.

Please let us (the community) and the ZIP editors ( know what your questions are, or if anything is unclear in ZIP 0! The ZIP on-boarding experience definitely has room for improvement, especially now that more people will be participating in the creation and evaluation of ZIPs.

In fact, I just opened a PR to add a link to ZIP 0 to the readme.

cc @daira @acityinohio (the current ZIP editors)


I am currently working on a template. should hopefully be ready in a couple of days.

It is going to be based off feedback I have received from the ECC, other zips and the RUST model.

Am I wasting my time? I was going to collate a post that could hopefully be pinned that tells people what is needed to write a zip. (like going into detail about rfc language and why it is important, how to use it, etc) the post will be specifically designed for non technical people to be able to express their ideas and directly compare them to others.

And remove a lot of the ‘heavy lifting’ of getting to grips with the zip process from a community standpoint.

This post is a basic outline. of the format, but I have not made the template yet. (and wont for at least a day)

@daira @acityinohio

Should I still continue? or wait?



will do, thanks sonya.

love this!

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i shouldn’t be the final authority here, but so long as the work is not duplicative it sounds helpful.

on the duplicative part, i would follow up with sonya per mention of intro materials in ZIP 0.


I think a “crash course on the ZIP process” guide would be incredibly helpful, even if it overlapped with ZIP 0. I would be happy to offer feedback or contribute, when / if you’re ready for more input!


Just want to ACK that we agree with your sentiments here at Amentum, Chris. And too have amassed a holding of ZEC over the last year of our operation during ideal market conditions.

We look forward to reading others feedback.


A follow up and some more thoughts on your answers/comments:

Seeems on this point, due my bad non-native-English we speak about different things.
What i have in mind is how the current founders reward is distributed:
==> Block reward % goes to a Zcash adress
==> from the Zcash adress it’s distributed to the different recepients, founders, employees, whomemver.
==> From exactly these founders, employees, whomever ECC gets the “donations” or funding.
That’s my impression how it currently works and in my book this is an absolutly wrong setup.

Or in case you exactly have this in mind the the protocol change should modified and 70% go to Protocol Development and 30% to Growth Fund by default? Still, who will be in charge to decide what gets used for what?

Seriously? A multi-million dollar on-going lawsuite is not a concern? Just in case the law-suite is begin lost others could follow and this should at very least be a concern in my opinion. And in case one or more such law-suites are lost in future, who is paying these multi-million dollar fines/compensations?

Why? It’s your chart you posted with the funding percentages and comparision to other project.
But it’s less than half of the story to use NIC’s numbers without US$ conversations in how much a given funding has generated.
Interesting enough we have no clear confirmed numbers on how much funds the ongoing FR has allready generated and my personal calculation/estiminate that it will have generated at current exchange rate (for the outstanding period) at least $300M, mostly around $400 is just that, an estiminate.
This raises some questions:

  • How many crypto projects are you/we aware that have ~$300-$400M raised within 4 years?
  • Was/is the current Founders Reward really distributed good enough to favour R&D, the product itsellf and development or should this be improved. Avoiding this question automaticly leads to unability to improve whatever.
  • My personal opinion is that it’s at least strange to talk about a new dev fee or modified founders reward without analyzing the current one. And you has a financial investment company for sure have done such analysis allready, but i guess that this point doesn’t favour the discussion with a 20% new fee.

Not that this matters, but it was my suggestion in another proposal to use this kind of election to get the best result (you even linked it in your first post).

However, even such very fair “election process” isn’t worth 2 cents if for-up the opinion gets manipulated. In my opinion posting your and only your proposal on the 76k followers Twitter account of the ECC is not fair towards all other proposals and someone can allready consider this manipulation of opinios to get a higher support for a given proposal.

This said, the best election process is worth nothing if things are decided (manipulated) from start.

I didn’t read such statement yet, even more suprising not in my own proposal which has the foundation as the whole recepient of a new dev fee. IF this is true than:
1.) At least this should have mentioned allready in my proposal which favours the Foundation as the recepient.
2.) Some people know way more than the forum community.

And of course some following questions in this scenario, do we need a foundation than at all if the foundation itself wants only very limited (legal) responsibility and accountness. I mean if the whole role of the foundation is just or mainly here and there some grant approving than this could be implented as well in the ECC and at least safe some funds.

I could discuss this point further but this would go into another thematic mostly, but it’s worth thinking about if the foundation should have more control than now over funds or not in the name of more transparency, fairer distribution and eventually even generating competition with the Zcash projects development.

Why over time and not within the introduction of a new def fee or even bevor?
One of my main concerns is that there is lacking whatever control on how funds are used and as stated even more as we talk here about a for-profit-company which leaves less possibilities for transparency and control than a foundation in principe.
So what’s the idea on how to improve transparency and control further with a new dev fund?

If we have to choose from this figure there are only 2 options that would fit the current State of Zcash governance. Either it’s a Corporate control (which in my opinion as well fits better) or it’s a benevolent dictatorship.
The ZF doesn’t play a role here in my opinion as it has no direct influence at all on any Zcash decision. At best some day maybe they could be something decision-influencing but until that point their independence doesn’t affect anything at all.

Final word:

Your indeed well written proposal that for sure will convince a lot of people and with the help of the 76k ECC twitter account and spreading this exact proposal i doubt there are any problems in having it accepted by the wider community…Someone has to admit it’s a professional job in pushing something through…

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Here’s a link to the statement, which was made directly to the forum community:

I got aware allready about the Foundations stance of this:

The Foundation would only support proposals that:

a) don’t rely on the Foundation being a single gatekeeper of funds
b) don’t change the upper bound of ZEC supply
c) have some kind of opt in mechanism for choosing to disburse funds (from miners and/or users)

Will be interesting to see what the foundations stance is as there are not many proposals with an opt-in mechanism… And this one is lacking one as well…

This is incorrect since one of the ZIP editors represents the Zcash Foundation. We have an effective veto on protocol changes, and it would be pretty disastrous in terms of reputation for ECC to go around the ZIP process after committing to it publicly.

Granted, once a trademark agreement is in place, that will carry more legal weight.



Welcome to the forums.

As you stated this is a contentious topic, I hope you can appreciate my frustration with the situation, it is not directed at you.

Having said that though it has reached a point where I need to take a step back for the politics and concentrate on writing the proposals, and my work on RandomX. I will be around to reply to things but less opinion.

You have brought some very good ideas to the table and I really do not want to discourage you.

I would like to pick up on one point in particular in your post/proposal. This is more to clear things up for the newbies and people who might be drawn here by your post.

The way you have framed this argument saddens me. You seem to understand crypto currency on a deep level, so I am not sure why you would phrase that the way you have.

The argument against a continual development fund from block distribution is a strong one:

  • There was a promise that was made by the ECC was that after 4 years they would no longer received 10% of the total mineable supply of zec from block distribution (not block reward, block distribution) and all block distribution will go to miners (this is baked into the protocol like bitcoin) This is not a 20% tax it is a 10% tax frontloaded to be 20% there is a important distinction. Any adjustment to block distribution would be being taxed twice, for supporting the network and processing transactions, i get to pay twice and enrich everyone else.

  • There was a promise that their will be an emission curve and that curve was set in stone (by algo, like bitcoin)

  • There was a promise that the total number of issued zec would be 21 million (fixed cap like bitcoin)

  • There was a promise of finacial privacy

If zcash can break one of the 4 pillars, then how can they be trusted not to break others?

edit: zcash in the sentence above is a reference to the technology and community. not the ECC. I wanted to make this point doubly clear because my post is aimed at more of the newer crowd who might not be as aware of the difference.

  • There was no mention of any form of ability to change these rules via community consesus.

  • There is a mechasim via zip’s but they are not decided upon by community consensus. No one votes on zips. That would be a crazy way to run a company.

  • There is no definition of who or what the community is

I cannot stress enough how there is no mechanism for people to come to a consensus, zec simply isnt designed like that. Could we use the same consensus mechanism for changing emission? how about depreciating z-addresses? These things have to be fundamentals right? So we can never have voting - bitcoin got that right completely by accident. (the 1 cpu 1 vote design is broken)

I am not trying to be negative, but these are real issues that are stopping this from progressing any further. The best we have so far is some really good suggestions from zooko about implementation aspects of possible ideas whatever ideas they maybe

However once you think about any one of the points he has raised with any one of the ‘change things ideas’ then, the downstream impact on the rest of the community (exchanges, mining pools, miners, people who accept for value) is so non trivial things start to melt (like my mind)

As someone who lives in a country that is governed by such a mechanism. It doesn’t work. Look at Brexit and the elimination polls in the house of commons. (not rigged - no outcome)

Then look at the tory pary leadership, (that was rigged). boris was always going to win but Gove was the best candidate against him, Boris out right stated he got his voters to back hunt so he wouldnt have to face Gove in the final race. (Hunt was never going to win gove had an outside chance, similar things happened in every round of that selection process)

With this mechanism, with a zip like “Dont change things” it will lose in the first round, it only benefits one kind of change, it doesn’t benefit changes that do not make changes.

What this boils down to is I did not opt-in [as I was made fully aware of what I did and did not opt-in to in the ASIC war of 2018] to having the rules changed after they are set in motion.

welcome to our world. none of us have. Sonya has started a megathread (that was on my todo list - only just got regular status back to enable me to do it though), that with daira and str4ds ideas on my proposal I think will help everyone be able to use their voice. All voices have to have the same weight. No voting, no polling, only voices.

I am trying to write a zip that says we dont need voting, then people are going to vote on it. How does that work? (I shake my head and go do something else every time i try to type it up)

Please dont flippantly dismiss my opinions by just saying “go play with yec” - I didnt opt-in to yec, i opted into zec. (I saw you already apologised, its just a very hot topic at the moment)

Thanks for your time.


thank you for the thoughtfulness @mistfpga

out of curiosity, are you a miner? couldn’t help but notice your name includes FPGA

to address some of the good concerns you laid out:

this speaks directly to the points i tried to make around legitimacy. legitimacy and trust can be used interchangeably here, and both are built over time by adhering to a community-endorsed decision-making framework (ie, governance). that framework can choose to balance rules and discretion, so long as it is time-consistent. i’m of the opinion that strictly rules-based frameworks are likely too inflexible (except for maybe bitcoin) to allow most cryptonetworks to optimally innovate and adapt to market opportunities.

therefore, zcash is currently in the search for its governance balance between rules and discretion. i can see some people feeling violated if they felt the “2016 launch promise” was that 4 years later zcash would fall in line with bitcoin and move forward with a rules-based system, because this very conversation violates that perceived promise. the PoV i’m most sympathetic to here is a miner’s, which is partly why i asked if you were a miner :slight_smile:

that said, 2019 is not 2016, and i think our learnings over the last 3 years need to be incorporated into how we govern and evolve zcash - there is no reason in attempting to be bitcoin. imo bitcoin has already won as the reserve asset of crypto, and its strategy cannot be replicated, because its strategy involved birthing the entire crypto space (and being the first asset to price all other cryptoassets).

if we can set in place the right governance framework, and one which the community largely agrees with, then we can agree on using that process to make all future decisions. so long as that process is adhered to, with plenty of checks-and-balances to counteract human nature, we can have trust in it. but until we agree on the process, we will always have contention like what we’re currently facing.

if you look at decred, for example, there is less contention because everyone is clear on what the process is for making new decisions.

much of my response above is applicable here, but to summarize:

right now there is no mechanism for people to come to consensus on such changes, but that may not always be the case for zcash - and to be very frank, i wouldn’t be here if i didn’t think the ECC + ZF was moving towards formalizing means for people to come to consensus on these very contentious decisions.

the way i see it, decisions will always need to be made. one of the biggest first decisions that must be made is how the decisions will be made. choosing to not make a decision about how decisions are made, is a decision in itself, and typically one with messy results. given what bitcoin is, it’s been able to get away without much of a decision-making framework, but that doesn’t mean other projects will be able to so successfully do the same.

agree though that the downstream impacts are serious and hence any implementations here cannot be taken lightly.

i’ll let @mlphresearch weigh in here as he has more background in the topic than i do.

i appreciate your opinions and am sorry for the discomfort this process is causing you.



Sorry I do not address a lot of the governance stuff, that is beyond my skill level.

Yes I mine Monero. I am primarily in this for the tech though. I have been in cryptography since before bitcoin was a twinkle in statoshis eye (hashcash was the first project that I took notice of in the kind of crypto currency sphere)

I am not that involved with the monero community though, ring signatures don’t really interest me that much. I am glad they were proven secure (although I cant find that paper now) ZK proofs, that really does interest me, it could fundamentally change how cryptography works.

The FPGA in my name refers to the initial bitcoin fpga another member and myself started (miSt FPGA - the St is for steve) but the teams speciality is in hardware cryptography and bespoke devices. (it is more than just me)

Partially quoting you. Because my interest is from a technical perspective legitimacy is sticking to the rules.

It is why this governance stuff is so tricky for me. I get a bit personally invested, and I don’t want to have to be involved. I have more interesting things to do, like play with NoBL Sram , RandomX, Hardware wallets, reverse engineering bugs, etc.

It just upsets me from time to time when I see talk of “oh we can change this, or that”

This is why I got involved in the very first place.

Yes this is the point of view I am coming from. In numbers we trust. but don’t get me wrong I am not salty about it.

I have offered to write up proposals and help with all proposals that people ask me for, I may not agree with it but everyone should have a voice and have a chance to get that voice heard. - if the thing stopping that is time or not knowing the right format/language then I can and will help.

I was disappointed that I could no longer mine zec and the implications that ASIC’s reduce the ability of the network to dynamically adapt, potentially limiting the technology.

I agree, and they should be made by a benevolent dictator. I thought we would have moved to that being the foundation by this point. I really am not good at governance or finance. So I will leave that for others to work out. All my proposals will be governance less. I don’t have the skillset to deal with it.

heheh, it is not you its me :smiley: - I think the issue more was you declared a large holding in zec, which would make you a large holder of yec, so telling people to mine yec might not have been the best idea to an already contentious subject. suggesting monero whilst it might have seemed strange it was exactly what zooko did in the asic thread [that was before yec though]

I hope this gives you a bit more insight in to where I am coming from and why I hold my positions.



Sorry for the double post. but the edit got too long and it seemed better to make a new post.


In my last post, I didn’t mean my initial statement to come off as flippant. I had read your proposals and ideas in depth, and I like them and what you bring to the table. I just don’t feel I can comment on them and add value, I just don’t understand it enough. which is why it is good that we have people that do. hopefully my last post explained my simplistic stance.

My main reason for posting this new message was to ask

  • do your plans for governance include what will be in NU4 - or are they for NU5 - because funding needs to be worked out for NU4 and that deadline is in 6 weeks.

Given that timeframe, and experience, what would you think would be the best course of action? My best attempt is over here.

Please read zookos responses at the end of the thread, they brought whole new insight onto this issue for me.

I would really like your feedback or input. Or anyone’s for that matter. Governance will be important. I just don’t want to have to vote, especially on the future outcome of a private company. So I really hope those who know about this stuff can work something out. Please check out that thread.

Hopefully you will see I am not anti funding ECC I am anti breaking core values. I think my stance is pretty much the same as the foundations. I believe both can be achieved without the need for voting. Mainly through a true opt-in protocol level adjustment. Greatly simplifying the issue for downstream and users. (primarily because of my limited understanding governance). But we now have greater community engagement again, after the topic going a bit stale for a week or so and people might get reinvigorated in funding ideas.

I have been thinking about this, and yes I agree to an extent. bitcoin is the coin to hold. However I believe that strategy could be replicated, in the sense of distribution of coins. One thing bitcoin did was get lots of coins out to lots of people quickly. If you can keep ASICS off your network for 2 halving’s then I think you will be safe as a legitimate assets store of value, or whatever the right word is. but this is just speculation and probably out of scope. Get it in as many hands as possible and you are in the right place.

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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 :slight_smile:

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.

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My argument was more towards the current situation and this statement

  • Right now the Foundation is financed & funded with “donations” from the Founders Reward by the founders for the next 1.5 years. That’s not what i call stolidly independent.
    @mlphresearch. Not sure if you are aware, but the foundation does NOT receive their funds directly from the protocol or founders reward, this was planned but abondoned 3 or 4 weeks ago if i remember right.
    Hence my comment, they currently don’t play much of a role while being fully dependent on Founders donations.

  • As far as i’am aware at the moment the Foundation has NO trademark rights, neither shared rights no anything regarding trademark. Until this happens there is just no 2-of-2 multisig, no matter how good it sounds.

So the foundation’s current role is very much limited to a theoretical veto in zip questions, which of course could be bypassed by just creating a fork leaving the foundation with 0 funds & 0 trademarkt at current state. That’s not independent in my book.

Do i miss something?

Edit: Just another thought regarding the foundation and it’s independence or influence.

We know that the public stance of the foundation is: ONLY an opt-in funding will be supported, hence against mandatory funding which seems to be the preferred type by the ECC/founders.

IF somehow a mandatory funding proposal will make it to the ZIP process & beyond i’am more than curious how the first veto on a protocol change will look like.

The alternative option would be that the foundation steps back and withdraws/changes their announced stance towards a mandatory funding system. In that case there is a good chance that there wouldn’t be any need of a foundation at all…

Edit 2: Link to the post where the direct Foundation funding got canceled: