Proposal for the Zcash 2020 Network Upgrade

The Zfnd only has some limited authority: a software repo, its funding, engineering staff, in the future a position in a trademark agreement. So, “Veto” only has meaning in that context. For example, by only contributing engineering effort to a software branch that doesn’t make mandatory funding to a for-profit.

The community ultimately decides by choosing what software to run, etc. The Foundation has also committed to incorporating public feedback into our own decision making. It’s advisory in the sense that our bylaws say the root authority of the Foundation is the majority vote of board members. Public votes/feedback are useful to the community even beyond guiding the Foundation’s decision - if you had to fire the Foundation for example by moving to a fork we didn’t support or something, the public feedback could help catalyze that.

This is all my best attempt at explaining what “veto” and “foundation governance” means. It’s consistent with everything the foundation has written so far. Hope it helps!


@amiller Sorry if this is a little off topic here, but since you mentioned the ECC for-profit status, maybe the foundation should emphasize that dev fund proposals can include mandates such as to build a voting system for future funding or for the ECC to become a non-profit.

If none of the proposals mandate this then I would take it as a sign that the community is OK with the ECC maintaining its current legal status.

I read the ECC statement and found their argument that there are strategic advocacy things they can do as a for-profit to be a pretty convincing argument. So I am intentionally not putting that mandate in my proposal. I think this should be made clear to everyone working on a proposal, so the Foundation can get a clear idea if this is actually so important to the community.


Vetoed? What ever happened to the “at the end of the day the community decides”?

My wording was intentional. The key phrases are “as software” and “the protocol called Zcash.”

and what exactly have ZF done that’s good for Zcash, and planning on doing to grow adoption and bring value to Zcash?

You are literally on a forum with a section dedicated to talking about ZF’s activities. I considered just linking you to our blog, but honestly. Come on. Don’t talk to me like ZF’s work and future plans are clouded in mystery. If you have specific questions, I’m happy to answer them.

Might I recommend you tone down the aggressiveness when you reply to members of the community, especially investors. There is debating and then there’s this condescending tone on your part :point_up_2:.

I reserve the right to condescend to people who haven’t done their homework and still want to bluster in here and tell the Zcash community what to do.

In fact, I’m surprised that no one else seems to feel insulted. If I were playing D&D 5 and someone showed up wanting the whole campaign to follow Pathfinder rules, apparently unaware of the existing arrangement and the work that went into setting it up, I would be equally annoyed.

You’re giving Zcash a bad image the way you handle yourself on the forum and twitter and it’s clearly not professional…not to mention constantly voicing your crappy opinions how investors do not matter for the longevity ZEC. Please take it down a notch, or find yourself a replacement. Thank you!

Look, I’m not a corporate PR person. One of the reasons why I like this job is that I get to be human and tell you what I really think. I would never want to moderate a forum where I wasn’t also an active community member.

Zcash is an open-source project, and ZF specifically exists to serve the public at large. In my capacity as a spokesperson, I am supposed to be transparent and direct. I can’t always tell you guys 100% of what I know due to confidentiality, but I will never lie to you.

No, it’s not the typical smooth-everything-over-doublespeak-only comms experience. It doesn’t smell Official™ — but is that what anyone wants? Aren’t we trying to do something new and revolutionary here?

Of course I try not to jeopardize ZF’s reputation. But ZF actually deserving trust is far more important than ZF affecting the rhetorical veneer of a normal think-tank. Personally, I’ve never trusted someone who talks like a LinkedIn testimonial. Why ape that style?


We realize our full proposal above is fairly lengthy. We just published an executive summary that highlights the salient points.

As always, we are happy to hear feedback from the community.

Our goal is to unite the Zcash community as much as possible while hopefully welcoming new members/investors who were put off by the original 20% Founder’s Reward instituted in 2016.


Eh, that’s only a strong argument against 501©3 status. Coin Center is a nonprofit and talks to regulators all day long — there are various different nonprofit statuses.

ZF’s main focus is legally binding accountability. The specific legal status is a red herring / relevant-but-not-the-point rabbit hole. It’s worth discussing, but we should also explore alternative structures that achieve the same goal.


I don’t see any restriction for a 501/3 to talk to regulators.

Organizations described in section 501©(3) are prohibited from conducting political campaign activities to intervene in elections to public office.[26] On the other hand, public charities (but not private foundations) may conduct a limited amount of lobbying to influence legislation. Although the law states that “No substantial part…” of a public charity’s activities can go to lobbying, charities may register for a 501(h) election allowing them to lawfully conduct lobbying activities as long as their financial expenditure does not exceed a specified amount.[27] 501©(3) organizations risk loss of tax exempt status if any of these rules are violated.[28][29]

A 501©(3) organization is allowed to conduct some or all of its charitable activities outside the United States.[30][31] Donors’ contributions to a 501©(3) organization are tax-deductible only if the contribution is for the use of the 501©(3) organization, and that the 501©(3) organization is not merely serving as an agent or conduit of a foreign charitable organization.[32] Additional procedures are required of 501©(3) organizations that are private foundations.


Basically it adds a lot of compliance cost, so in practice it would be silly to choose 501©3 if talking to regulators is going to be a substantial activity of the organization.

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Thank you for correcting me! :slight_smile:

Agree this is very important. I’m not informed at all about the legal structures, but there should be some mandates for legal binding accountability in the dev fund proposals.

I think I will edit my proposal to reflect this.

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Hey folks: Like Andrew wrote above, The Zcash Foundation doesn’t have the ability to veto anything. As to the trademarks—they are currently owned by ECC. We’re in negotiation with the Zfnd to enter into a licensing agreement which would further decentralize control of the trademark, but until such a legal contract is signed, ECC still has all the rights and responsibilities due to owning the trademark. I’ve committed to using the trademark to honor the community’s decision. To do anything else with the trademark would be self-defeating, and it would be wrong.

This brings up an issue I’ve been thinking about. Zfnd and us have previously talked about how we agree that 2-of-3 is a better “multisig” than 2-of-2 is. That’s because 2-of-2 is a “double veto”. Double-veto increases the risk of inaction. This is why, when you set up a new company or a new non-profit, the Board of Directors is three people or five, but never two.

We at ECC have been thinking that we should go straight to a 2-of-3 multisig governance protocol governing the trademark, where the three parties could be Zfnd, ECC, and a third party chosen by the community.

But in any case, for now the ECC is the sole owner of the trademark, and we’ve committed to using the trademark to honor the community’s collective decision, even if that is something that is adverse to ECC, or something that contradicts a Zfnd mandate.


Thank you for clarifying this Zooko.


So… in practice ZF has a veto :stuck_out_tongue:

But seriously thanks for clarifying the legal backend.

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2 years later and still “in negotiation” over trademark?

Something is wrong.

Maybe Foundation and ECC are fighting over money and weapons are trademark and non-profit requirement.


Now, when I look at what happened 2.3 years ago and now it seems to me that nothing is changing dramatically, and the plans were that everything should change and it seemed then for the better, so I ask you to clarify the plans, and in general the vision of the future what organizations are striving for The adoption is certainly good, but based on the fact that it’s not entirely in their power, what real things will be done and what they think it will lead to, it seems to me that everyone here will agree that the situation (even with the brand) is not healthy, many words and negative actions do much more bad than reaching in the right direction.
It doesn’t matter to me how the financing will be spent, the result in any business is important to me, but it turns out that everyone focused on financing and forget what should happen in a short time, say 1 year, or we will decide on finances and everything will go at the same pace, in 2021 there will be negotiations by brand and discussion Do I need a wallet for poppy and light wallets on all platforms with new features, or access to the Chinese market?
The ECC team, as noted by professionals, but now we are seeing an outflow of personnel, the community should pay attention to it, why this has not been done, how will it slow down the development?

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Speculation of bad faith without knowledge is a bad look, though sadly common these days.

For a long time, the foundation was not ready to take the responsibility. We spent considerable time and money to secure and protect the mark around the world since that time.

We started working through models last year, and then drafted a novel approach to a shared trademark agreement. We began working through it with the foundation earlier this year. It’s a complex agreement. Who has what responsibility for the mark? How can the other part use the mark - who has authority to do what? What if there is a disagreement? What if there is a chain split? How will users be notified on sites, etc? How can the mark be applied in that case? What happens if ECC ceases business? What happens if the foundation is forced to cease operations for some reason?

We put a lot of thought into it. Through the process of working through this and speaking with a lot of advisors, it appears that it might be a good time to introduce the idea of furthering the decentralization of control of the mark. The work done to date is still a good foundation for a 2-3 multisig.

I’m skeptical that increasing community-determined decentralization with all its benefits, would be controversial to anyone that honestly has the best interest of the project in mind.


Lack of understanding of the situation is not the best side for everyone who thinks about the interests of the project, the conversation about the brand has been going on for a long time, but there is no easy to read and understand text about the current situation, for example, Zooko explained the situation today, and the fund manager was surprised for For the community, this situation is abnormal, if it is, as ECC says, then why besides the organization it is not clear to anyone, even if someone from the fund knows, then why is the secret for the rest and so on. Do you agree with me?
It is from this point of view that distrust of the project as a whole is formed, I still don’t understand what is really happening, what prospects the ECC and the fund see, whether any benefits will be derived from the project (financial or practical), what is needed for this, that happens to the state, why there is no news on the main task in the adoption of the project and negotiations with the regulators, where is their vision (a lot of course concerns the closed information, but I think not all), why there is still no analysis of the effectiveness of the methods in the work done over the past period, there will be what t changed that would accelerate or improve the efficiency of the work, whether directed the company to benefit from the practical proeta which means chooses which considers timing. It should just be clear, you don’t need gigantic articles overloaded with technical information, people don’t need it mainly, do you consider it marketing (I think) and will you consider any of the proposals.
I say all this for the period until October 2020, it is this kind of work that I see as “all in”
If this is classified information, just say how many questions I do not ask. There are no answers.
Another confirmation of my words, your comment and my commentary makes it clear that even the first persons do not have a common understanding, if one can clarify his idea for the other and not clarify the general idea, if the fund clearly understands its authority, then why all this conversation , enough to start to fix the start agreement, without all these variations what will happen in the event of a collapse and the like, agree?
On this issue, I am on the side of the fund for the vision of the situation.
On the proposal to reduce the reward from 20 to 10 percent, after halving the reward, even if the cost of $ 50 remains, I see a lack of funding. When there will be discussions of each proposal, will this problem be predicted (enough for the fund but not enough for the company, or vice versa)?

This deserves some context Zooko, I don’t think this characterizes the Foundation’s position completely accurately — we agreed 2-of-3 multisig was better if we find the right third party. That in and of itself requires an additional process/mutual agreement between the three parties (which is much more difficult than a bilateral agreement), and as I’ve mentioned before in presentations in the past, 2-of-2 with known entities dedicated to Zcash is better than jumping straight to 2-of-3 with a third party hastily decided or staying with 1-of-1 entity trademarks and software development processes.

As for why 2-of-2 is still strictly better than 1-of-1: in the case of cryptocurrency governance, I believe that inaction in the case of disagreement is a better outcome than one party unilaterally exercising power.


I agree that finding the right third party is critical for 2-of-3 governance. I think the community can do that!

To be honest I’m currently very encouraged by how the Dev Fund decision process has demonstrated the community’s vigor, diversity, and power. Critically, the Zcash community is working toward collective action built out of the diversity of their opinions and preferences, instead of (like most of what seems to happen in so many communities and societies nowadays) just focusing in on the differences and spiralling into endless debate over those.

I’m thinking the sort of collective decision process by which the community is currently hashing out Dev Fund ideas could also be used to select a third party to serve in a 2-of-3 governance mechanism over the trademark. It seems appropriate that the third should be selected by the community directly instead of being appointed by ECC and/or Zfnd.

In the long run, having a strong, decentralized, constructive community is super valuable because we’re going to have to make collective decisions in a few years about things that we can’t even conceive of now — new technologies and economic concepts that haven’t been invented yet, shifts in geopolitics that are unimaginable to us today, etc.


Why not the community as a whole in the form of a new community governance panel like the one that is part of my new proposal which would represent all different streams of the Zcash community.
It’s still an idea and at least i think it’s a good approach to have as many as possible different views under 1 form:

Here an example how it could look like:

A new enhanced Governance Panel should replace the current Foundation’s Governance Panel:
This is just an idea below to show how a better, more fair goverance panel could look like:

  • ECC, 10 member
  • ZF, 10 member
  • Zcash Founding Scientists, 7 members IF not employed/paid at/by ZF or ECC allready.
  • Mining pools, biggest 10 mining pools each 1 member, results in 10 members
  • Hardware producers, Innosilicon & Bitmain: Each 3 or 5 members, results in 6-10 members
  • Investors like placeholder, blocktown, grayscale and such, each 1 or 2 members, results in “unclear”.
  • Zcash community: Every forum member registered on the official Zcash forum for at least 3 months? Eventually a minimal post count or other restriction could be added to avoid people joining just for voting reasons, results in unlimited unclear members.

Other possibilities to include"

  • Zcash affilated or Zcash supporting projects like parity, wallet creators, such like, 1 member each.
  • pretty sure i forgot some groups, this of course can be included as well.

The reasoning behind such design would be that indeed every arm of the Zcash community would be represented, would have a voice and even a vote and can influence important decisions that have to be made.
So far everybody is talking about community decisions but nobody is even near a plan on how this could be done fair, promising and working and accessable to literally everybody interested. Here at least a solution that tries to include all the different streams of the Zcash network.

Edit: Just thought that the more “normal community members” join the less influence the ZF, ECC, investors and so on would have.

I think a possible solution would be the that fixed members for a given organization should be per 100 people that vote. Means if the new governance community panel gets for example 200 members the members or vote count of the fixed members should be double to garantee a fair voting power distribution.

In my example this would mean that the 10 ECC members would have get double the voting power resulting in 20 votes at the point the community panel reaches 200 members. Just as an example as there must be a mechanism that the bigger the community governance panel gets the influence of the must members like ZF, ECC doesn’t get inflationed.

Voting, Polling, Results:

  • Every member of the new governance panel gets invited to take take part in the discussion around a given proposals, changes, whatever and of course later a vote in the governance panel.
    A voting must result in a suggested 75% majority to be accepted, maybe 66% could be an alternative level as well. Up to community discussion what the best level in % would be to replace a wider community agreement.

Voting/Polling by the New community governance panel should be seen as binding even if not ultimatly and not like now just some polling. Eventually some pure highly technical aspects should not be taking into the new community governance panel, that’s up to further fine adjustment on what would qualify to be decided by the new community governance panel.

from: Dev Fund Proposal: Increasing Monetary base by 10%

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ECC and Foundation accused of spending more money to “justify budget renewal”?

Is there official response to Blocktown VC?

This is a good idea, looking though your post it echos some of the things that Josh mentioned in the Foundations blog post (ie: using a variety of members) about measuring community feedback.

Reviving the Community Advisory Panel

We will revive last year’s Community Advisory Panel and request old members to both:

  • invite one new member of their choosing
  • vote on the proposals (once they have been submitted as ZIPs).

The polls will open September 3 and be due September 17.

Once ZIPs have been formalized I think we could petition to make the governance panel more inclusive of the parties you mentioned.

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