@joshs - I support this proposal. Zcash has significant governance needs without great forms of legitimate governance baked in. There is still so much work to do; indecision and ossification are not viable options. Balanced with the MGC, coin holder voting with appropriate controls appears to be the least bad option. I understand people’s concerns about plutocracy. In this instance, coin holder voting is not the end all be all for the protocol, just for the lockbox funds, which they effectively fund anyway.
Zcash’s other forms of governance are extremely noisy right now - it is very difficult to tell who has skin in the game and who just has a lot of time on their hands. Holders are putting their money where their mouth is and frankly holding a sometimes tough to love asset (at this point I assume it’s because they believe in something bigger than price). It is the single strongest signal of alignment with the project - it should be treated as such in the governance of the protocol.
From the perspective of “Voice or Exit”, holders have not had much of a strong formal voice in governance to date. Besides some signaling polls and creative messages, the only form of communication has been the price of ZEC (let’s call this “Exit”). It’s possible that if we give coin holders a stronger form of “Voice”, they may chose that over “Exit”, which could make it more attractive to hold ZEC. This could improve the money attributes of ZEC while also improving sustainability for the ecosystem and everyone that depends on ZEC funding. It’s probably less the fact that they have a voice and more what they do with it that would lead to this outcome.
Coin Holder Voting:
Does anyone have data to support coin holder voting increases user adoption, zec price or transaction volume?
Does anyone have data to show coin holder voting is a tested method of decision making as a model for production use in governance?
How many coin holder votes inside the zcash community have been conducted?
What is the reliability of the methodology of coin holder voting in zcash governance?
What is the participation rate of coin holder voting inside the zcash community?
The theory that a large holder of zec is more incentivize vs a small holder of zec needs to be challenged. For example, one of the top five holders of USA treasuries is the communist peoples party central bank, does this mean the communist party of china has more incentive vs a brick making company in Boston who holds a small amount of treasuries? The central bank of china holds these assets for the strategic risk making of different potential outcomes. This should not give the communist parties central bank a disproportionate position of power in American decision making, if any. Holding USA treasuries is a business decision, nothing to do with values or outcomes.
The structure of decision making should align with increasing user adoption , retention of users , increasing user participation which should increase transaction volumes, price value, and price stability.
Community User Groups should be paid in zec to verify a user in a user group for a vote. For example: if zashi has 2147 app users who are verified for a vote by the zashi developer to the zcash vote standard this developer receives an amount of zec for this verified voter from the z block fund.
It’s pretty hard to buy zec to vote if you live in a currency region with 00 000 trailing a loaf of bread, let a lone incentivizing future zec users to come in an dance with whales. However, anyone can grow a group.
An option would be to do a “test run” to see what coin holders decide to do with
~75k ZEC (assuming my calcs are right and the current lockbox period ends in Nov 2025). Currently the lockbox has ~18k ZEC.
After Nov 2025 either a) accrue ZEC in a second separate lockbox for 1 or 2 years while letting coin holders decide about the “lockbox period 1 funds” or b) redirect the 12% to the miners immediately.
The ZCG 8% share is another discussion for me. But I think the ZCG model has a good track record and earned to keep getting funded.
We should stop once and for all with the fairy tale that most people are only working on zcash because of its privacy and that is the real motivation. This is complete nonsense and pure hypocrisy and sometimes even self-protection to justify the slow development.
Because if that were the case, everyone would work for free and not talk about money all the time. Let us all agree that we are all advocates of privacy and at the same time think that a bet on it could be successful later, but especially if it is actively worked on. But everything else is pure hypocrisy and above all implausible.
During the Zcon3 Town Hall, then-ZF board member Peter Van @Valkenburgh gave an excellent perspective on the wisdom of incorporating “ZEC holders into the governance process in a formal and binding manner”.
(The relevant section starts 90 seconds in.)
My personal views (and please note that I’m not speaking for ZF in this post) on the topic of coinholder voting as a governance mechanism have been heavily influenced by Vitalik’s excellent blog post on the topic, in which he identifies three major “problems with coin voting even without explicit attackers”:
These problems are relevant when considering whether coinholders should play a significant role in Zcash governance (including funding decisions).
For Zcash, the question of whether coinholders’ interests are naturally aligned with the Zcash mission, principles and values is a critical one.
Simplistically*, the motivation for any individual’s interest in and involvement in Zcash can be plotted on a spectrum with “Mission” at one end, and “Self-Interest” at the other.
(＊ The reality is a lot more complex and nuanced - this is merely a simplistic mental model to help consider how someone is likely to act. )
Someone on the “Mission” end of the spectrum is likely to be primarily motivated by Zcash’s mission of financial privacy, its values (e.g. personal freedom, inclusiveness) and principles (e.g. open source, permissionlessness). At the extreme, they are likely to be interested in supporting or contributing to the Zcash project whether or not they receive payment or recognition for doing so.
By contrast, someone on the “Self-Interest” end of the spectrum is likely to be primarily motivated by greed (“Make number go up!”) or ego (e.g. the prospect of using Zcash to enhance their own standing or influence). Such a person is more likely to prioritize their own self-interests over the Zcash mission. There’s nothing intrinsically wrong with allowing self-interest to influence one’s decisions (let’s face it - we all do it!) but, an issue is likely to arise if someone is willing to act amorally (e.g. by lying or concealing information that ought to be disclosed), and actively undermine the Zcash mission to further their own interests.
I’m not suggesting that coinholders are solely motivated by self-interest but I think that, in general, they are more likely to be closer to the “Self-Interest” end of the spectrum.
Imagine a scenario in which compromising Zcash’s mission, values or principles would likely increase (or prevent a decrease in) the price of Zcash (e.g. weakening Zcash’s privacy in order to avoid wholesale delisting from exchanges). The more coins a person holds, the more they stand to benefit if the price or ZEC increases. That creates an inherent conflict of interest between the Zcash mission, and that individual’s interests.
None of this is intended to suggest that all coinholders are amoral. I don’t doubt for a moment that many existing coinholders (including whales) are, in fact, very close to the “Mission” end of the motivation spectrum. The problem is that, if we adopt a system that hands control of Zcash governance (or funding) to coinholders, that will inevitably attract carpetbaggers who seek to wield that control to benefit themselves.
I’m genuinely interested in hearing coinholders’ views. I really want to hear from folks like @outgoing.doze, to understand their motivation for holding ZEC, and what they think we should be prioritising.
However, I don’t believe that a ZEC whale’s views should automatically eclipse, say, 200 active community members simply because those 200 people collectively own fewer ZEC than the whale.
And if some whale posting some kind of threatening message on a public blockchain is supposed to entice you for coin voting, I don’t know, for me it flashes more like a big warning sign that some whales are lurking in the shadows (and probably of the worst kind if their funds are not shielded) waiting to fulfill their own or other’s agenda.
It doesn’t mean that coin holders shouldn’t be more involved, but it should be done gradually and intelligently (the Milton governance proposal is very reasonable in this way I find). But going without transition to 100% constant coin voting is just very risky and a recipe for total disaster (and grifting on a large scale). As for transparent coin voting, I assume it’s just a bad dystopian joke.
This seems to me a less imminent risk in comparison to the incentives that already exist in the ecosystem - which are not the ones most aligned with long-term sustainability, for which market cap growth is essential. Zcash will not survive and thrive unless it is a reasonable place to store value AND sustainable from a security/mining standpoint which won’t be the case if the price craters or flatlines. If Zcash does a 10x on the basis of purely self-interested behavior on the part of coinholders, everybody wins.
That said, the best system IMO is one with checks and balances, meaning some sort of system (several which have already been proposed) that treat coinholder votes as one decision making body subject to the veto of another that not weighted purely by the value of holdings.
My biggest concern with overweighting coinholder votes is that someone buys up or borrows a huge quantity of ZEC solely for the purpose of influencing the outcome of a vote to do something nefarious, like say weakening privacy features, as you describe above. A body comprised of stakeholders from across the system with veto power should be able to hold that in check.
In the proposed model, the orgs with signing keys can refuse to fund what the coin holders voted to fund. And the core devs can refuse to merge code. The nuclear option would be to fork. Multiple backstops.
Something like this already happened. ZCG approved a grant for Qedit to implement a feature in support ZSA stables. The core devs dissented and the grant was cancelled.
It gives coin holders a voice in what is funded, alongside others in the community.
I am very much in favour of coin voting (past ref. 1), and specifically prioritising votes from the shielded pool (past ref. 2) as to:
incentivise coin migration towards orchard → better privacy for everyone → better value proposition for Zcash as a whole
avoid, as you mentioned in another thread, transparent custodian exchanges voting with customer funds
Looking at some comments from this and Josh’s other thread makes me think that there a need for separate debates regarding:
what will be the weight/power of coinholder voting? here I very much like @nuttycom’s comment about coin-approve, key-veto:
what pools should be included, and if multiple pools, should there weight be equal
My position has not changed around coin voting good and shielded voting best, but more widespread in-app voting (Zashi), and or vote delegation is necessary if we wish to distill true coinholder consensus. Some added dimensionality around voting weights, e.g. 1 t-zec = 1 vote, but 1 orchard zec = 2 votes might make vote inclusion feel less like a stick, and more like a carrot (referencing @peacemonger) whilst still incentivising better protocol-level privacy.
While I do like this idea better than excluding t-addresses completely, there’s no way around the fact that this is still a stick. For many holders, moving out of transparent ZEC means compromising the security of their ZEC. They shouldn’t have to earn being treated equally by sacrificing their user experience. The answer is always better UX and giving users more, not forcing them into giving up something they clearly prefer.
Many users would much rather shield their ZEC, but they just don’t trust the available storage options. If we want more shielded ZEC, we need to create a smoother, more secure experience for storing it. Shielded ZEC went up significantly since the release of Zashi, and grew again since the Keystone release. We just need to keep building for better shielded storage.
Speaking of better shielded storage—I’m currently doing research for Zashi Vault and gathering user feedback. This encrypted Zashi Vault Survey is about to go out to the entire community, so I might as well post it here. Please take a few minutes to fill it out. It takes about 8 minutes to complete, and would really help us build something that could have a massive positive effect on the percentage of ZEC stored in the Orchard pool.
Hey, what you guys think about a governance platfrom that proposals can be voted like this one? Zcash lacks a unified platform that makes participation accessible unlike other protocols - i am just checking pulse of the community.
Please explain one thing to me: What does democracy and the principle of equality mean to you?
When you go to the polls, it doesn’t matter how much money you have in your wallet. You don’t have any more right or a higher weight to vote, than someone else who has less money than you. It is important that a certain voter turnout will achieved and that there must be the possibility of a veto in the case of zcash. But it doesn’t matter at all who has the most eggs in the basket and whether they are transparent or not. A voting is not about what a single person or group thinks is right, but about the participants as a whole. Even if a small group may have the better arguments without views, then this is only the case from the perspective of this group. In democratic elections/votings, the majority decides. I would go even further and say that if an election/voting is determined by the weight of financial resources, it is even more dangerous than if all of them together make up the weight. “You can say and do anything as long as it is the opinion of a certain group”. This is not called democracy but representative democracy and is dictated by a few rich people. (In general, one should assume that the voters as a whole are more likely to make the right decision than a small group, but voter turnout is of great importance and if something becomes inconsistent, there is the veto function and the possibility of subsequent discussion.)
Solution: Everyone has the same voting power. Everyone can vote, regardless of whether it is transparent or not. It is important that there must always be a minimum level of participation that reflects the community as a whole.
There must also always be a clear majority for something to be decided. Also, and this will be essential, there must be the possibility of a veto. So if there is no majority in a vote or there are any other reasons why the vote was not completed successfully, discussions must continue until a solution or majority acceptable to all is found.
Hey, you do need to know that i do not endorse weighted voting. You see, even this idea (weighted or non-weighted) itself needs its own proposal to discuss.
I am a simple developer who find opportunity to work on such a project. That’s all. It is the community that decides everything in what will the project deliver.
As a Zashi & Keystone user myself, I’m not convinced that UX has become the bottleneck here. ECC is doing an amazing job with Zashi, and prioritising a Keystone integration was in my opinion the right choice. I might butcher one of Josh’s past statements but I very much adhere to the idea of prioritising work with external companies that show willingness to do so.
Do we have data from transparent pool holders as to why they’re not switching to Orchard? I understand this to be potentially sensitive and/or private information, but I’d like to what t-% is constraint by:
Brand Trust, i.e. they are waiting for a Trezor or Ledger (orchard) product
Cost of new Hardware device
UX difficulty when migrating/or using Zashi
Other (e.g. compliance reasons)
Zashi’s already very user-friendly UX makes me think that point 3. would turn out to be the minority argument nowadays.
When focusing on voting UX, then yes, current voting UX is not great for anyone not already using ywallet. I’d consider vote delegation the gold standard in voting UX, but I’m aware that such an implementation does take time and resources that we currently might not have.
As for:
In the context of voting, considering that one has to have access to their private key in order to sign a message and prove ownership, I don’t see how a user with a security setup that doesn’t allow for shielding would have one allowing for transparent voting.
I’ll use Ethereum as a working example:
If you’re securing the network by running a validator and putting your capital at risk, then you gain revenue & voting power.
If you put your capital at risk, but don’t run a validator, then you only get the revenue.
If you hold unstaked ETH, then you get price volatility, but no voting and no revenue.
Under PoW I see putting your $ZEC into Orchard as similarly aligned to Zcash, as staking (but not validating) $ETH is for Ethereum. An extra mission-aligned* effort (shielding) warrants extra rewards (favourable voting weights).
I never saw Ethereans argue that staking rewards are a stick for those unwilling to stake, I do see the parallels to a though.
*I put mission-aligned in bold because I agree that just extra UX effort alone does not warrant extra rewards. I’d never argue that those who vote through a CLI get more voting power just because it’s the more difficult thing to do.
Conflict of interest from rent seekers who don’t get much / anything done is 100X worse.
“Sometimes people make bad decisions”. Coinholders might but so might managerial class (or any other decision making body). Just that coinholders have the biggest incentives not to.
I think the term you are looking for is “incentive aligned” - people who have the best interest in the growth of the project will have the most say.
Midwit takes (like the above) are why ZEC is at $35 & I can’t send funds out of my ledger.
) or ego (e.g. the prospect of using Zcash to enhance their own standing or influence). Such a person is more likely to prioritize their own self-interests over the Zcash mission. There’s nothing intrinsically wrong with allowing self-interest to influence one’s decisions (let’s face it - we all do it!) but, an issue is likely to arise if someone is willing to act amorally (e.g. by lying or concealing information that ought to be disclosed), and actively undermine the Zcash mission to further their own interests.
though.
Love this and fully agree.