Proposal for the Zcash 2020 Network Upgrade

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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No, but i think it’s a valid concern many of us have discussed allready privatly and not on the forum.
Especially the increasing of the ECC operations, less the foundation ones as they seem to have a more healty financial planning.

But if you read " * We’re well-funded. The company has a solid runway." on the job offers someone has indeed to wonder if such spending without secured further funding is right where the most logical action in a price downfall should be economics.


I thought a long time about how and what best would fit into having a reall good governance community panel. The old one was an attempt but in my opinion it lacked several very important factors which i try to improve with my governance panel idea, especially the following:

  • everybody haveing an interest in Zcash should be represented somehow,
  • it should be easy accessable for everybody, hence the governance panel seems to be the best option without having people to figure out technical details, requirements and such.
  • It should represent all powers fair, hence some restrictions to members (which are of course to be discussed, mine are just an example how it could look like!). But i think it’s important that no fraction has more polling, voting or any other power than it should have. At the same time no fraction entity should have less voting power than they should have. I think it’s possible to make a good deal here on how each fraction is represented and involved a bigger part of the community as well and make their ideas and voice to be heared.
  • It should be easy to setup, to handle, to organize, to post results, to safe outcomes, whatever. I again think the governance panel fits best for all these so far. Every voter/member can even add his argumentation behind his voting which adds a lot of transparency, reasoning and even accounting in my opinion.

I made have choosen a different approach for this as just having new members invited by old members would eventually not lead to the desired outcome, hence i advocate here for some insitutions ECC, ZF, mining pools, hardware producers, investors & VCs fixed member places and for the rest of the community voluntary places in the new governance panel. I hope this should better distribute the power, make the whole process more appealing to all sides involved and give the best possible feedback/pollling/voting as an outcome. I strongly advicce not to keep the suggested old members invite 1 new member!

It is as well important in my opinion to make the average community member aware that he has a place there as well IF he wants, enough some minimal requirements are filled. I even would go as far as saying that bringing up such governance panel should be of higher priority and be done bevor all other decisions as it could bring more consensus to the funding discussion in generally.

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Frankly, with respect to the Foundation, it’s a nonsensical assertion. We barely existed in 2017. The increase of operations and expenses was the Foundation bringing on a full-time staff (including myself — third employee, joined May 2018) to do more things.


Let me explain again why I was harsh (which I stand by): Blocktown’s proposal reflected such ignorance of context that it was disrespectful to everyone involved so far. Blocktown’s desired arrangement contradicts the principles that we’ve been painstakingly, arduously implementing for more than a year.

Sonya, please be explicit - this will help a lot!

Why does “Blocktown’s proposal reflect such ignorance of context”?
Why is it “disrespectful to everyone involved so far”?
Why does “Blocktown’s desired arrangement contradicts the principles that we’ve been painstakingly, arduously implementing for more than a year”?

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Fair enough.

I pointed out the worst error immediately: As written, Blocktown’s proposal cannot make it through the ZIP process.

It beggars belief that such a crucial detail would escape Blocktown, had the people drafting the proposal done their research. In fact, “research” is an overstatement — it’s not hard to read a list of links that have already been collected in one spot. This oversight is the main thing that upsets me.

This bothers me less, since anything is on the table for discussion, but it doesn’t make sense to say that you want a single, for-profit company to receive a perpetual development fund, and then “implore” “for the sake of decentralization” about anything.

The whole reason why the Zcash Foundation exists, why recipients of the Founders’ Reward chose to personally pledge large amounts of ZEC, why Josh has written several detailed blog posts about the dynamics of Zcash governance, and the reason why we’re all debating about this, is that Zcash shouldn’t be controlled by any single entity.

To change that, Blocktown will have to convince ECC to go back on very public commitments. Again, how were they not aware of that?

Anyway. I have made other specific criticisms upthread, and I’m not going to rewrite all of those, but here are a couple more, quote by quote:

As @NealJayu said on Twitter:

Please don’t refer to this as the ‘Founders’ Reward’. There’s no such proposal on the table to continue payouts to initial investors. The only proposals have been for a #ZcashDevFund (or lack thereof).

People are already confused by the Founders’ Reward. Let’s try not to make it worse.

Perhaps it would be fiscally irresponsible, in a notoriously volatile market, to allocate ZEC based on assuming that it’ll 10x by a certain year. Even if we grant a value-based investment thesis, the market can stay irrational longer than you can stay solvent.

Maybe that’s an acceptable risk — it’s not for me to decide — but it’s nonetheless a huge risk. Zcash inherits a lot from bitcoin, no argument there. But ZEC is not BTC. The ecosystems are vastly different. Why doesn’t Blocktown address this obvious concern?

Addressed here and here.

There are also aspects of Blocktown’s proposal that I think are well-informed and reasonable (which, please note, is different from agreeing that we should do these things).

  • Wanting to reduce to 10%

However… wouldn’t it make more sense to have a dev fund that narrows down and then ends, rather than a perpetual 10%? Especially when you’re assuming that ZEC is going to drastically go up in price in the near future.

  • “The prohibition of privacy-centric cryptocurrencies will only continue to tighten with adoption. To withstand this pressure, Zcash’s greatest strengths are its decentralization and network security.

That’s certainly a valid argument, IMO.

  • “As we explain in the subsequent sections, the Founder’s Reward weakens both decentralization and network security.”

I think there’s an argument here too. But like… if something weakened by the Founders’ Reward weakens decentralization and network security, and those are Zcash’s greatest strengths, aren’t you decreasing Zcash’s comparative advantage by creating a new dev fund at all?


It is already 10% (of total distribution). it goes to zero. then how much % over what time do you think they should get. and should it be block distribution or block reward that this comes from?

To be fair I cant see why this has caused so much upset. well I can, but still not for me to judge. Would you like some help in making it more compatible with the zip process, and getting up to speed on what has already been discussed.

Sonya has done an excellent job of collating all the latest info. but it is still changing on a daily basis.

I know I cant keep up with all the proposals, but it does state at the very top of sonyas megathread (High signal, Low noise) that I will help people and have written guidelines.

Let me know if you would like some help. (I am just a community member im not affiliated with the ECC or foundation.)


Just adding 2 sources where this proposal was mentioned:



We are not advocating a perpetual 10% for the dev fund as you indicate in this thread. We propose setting a precedent/establishing a social contract of halving the dev fund % of the miner’s reward every 4 years. For example, 2016-2020: 20%, 2020-2024: 10%, 2024-2028: 5%, etc. This would be in place of just keeping it at 20% by the next halving, which would set the precedent that the dev fund will be perpetually 20% (what’s to stop the ZF/ECC from asking for a collective 20% in 2024?).

This perpetual FR/dev fund/tax on the network is what scared many investors away in 2016 who were looking for a private currency that adhered closer to the principles and network/mining incentives of bitcoin. I know because I was there. Our proposal sets a precedent for the Zcash network to rapidly approach the decentralization and security of bitcoin, while simultaneously providing funds for further development during Zcash’s infancy.

Regarding the projected value of ZEC over the next 5 years. Choosing a price of $50 to value ZEC at for your dev fund projections is extremely speculative. I don’t know if you’ve been investing in this space as far back as 2013, but cryptocurrency prices don’t just hold steady for years. In crypto, projects either grow in value or they become illiquid (die) over a course of 5 years (by next halving in 2024). We aren’t investing in railroad tracks here. Zcash will be worth a lot or will be worth nothing in 5 years. Which camp are you in?

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If the Zcash community shows support for our proposal of decreasing the dev fund from 20% down to 10% for this next halving, then we would be happy to create a proposal that meets the guidelines of the ZIP process. Thanks for the offer and if the demand is there, would be great to have your assistance!

-James Todaro


I think your proposal, as all others is a valid option one and deserves to have it made ZIP ready.

I personally still have no idea how the final proposal will be choosen by the community with still no mechanism in place, but i would make it ZIP-ready for what it’s worth later has to be seen.

Just out of curiousity. Did you go through all the other proposals as well? Me personally is more than curious to have opinions from non-forum regulars and especially VC’s as these are seen rarely in the forum.

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I wouldn’t worry about getting support before the proposal. The process doesn’t really work like that. There are a number of proposals that give more than 10% from this halving to the next. (5% of total issuance)

The way the proposals work at the moment is you can propose anything. It then gets a first pass filter from the community and ECC/Foundation in a non official capacity.

edit: just in case I wasn’t clear I agree with the post by @boxalex which is why I went straight to I will try to get something done for you by tomorrow.

I don’t know if you have taken a look at my proposals yet or the megathread (there is a lot to digest, which is why I am offering to help, I have been breathing this topic for about 2 months now)

This is what we are trying to get done for the 31st. So to get past this first pass filter is has to be in a reasonable but not yet standardised format. (I writing in British English, or as we call it in England, English. heh) - There are a few obvious (to me) parts of your proposal that I think are non essential to what you are trying to get at but stop it from being considered (a bit like some of my second proposal, link at the bottom)

I don’t have time tonight there is a football (soccer) match on I want to watch at the pub. Tomorrow I will take what you have written and try to rewrite it in a way that passes the basic sanity checks and highlight where your proposal made some basic, yet understandable and fixable misunderstandings.

I will do this via pm or private document.

Here are a couple of my proposals. They are very different to yours. I am 99% sure the stop the FR one will pass. That passing makes a lot of others change so you need to keep this sort of thing in mind when writing them (but the community can do this for you.)

This or something very similar will pass 100% sure of that. (the ending of the FR, the new mechanism, if there is to be one is what is up for discussion)

This maybe, maybe not. (and certainly not as it is currently worded)

Even though they are different to yours I will still give you my best. but you will have to work with me on it. I don’t think you will find it that difficult, its just getting up to speed on already covered ground.

  • in my opinion every voice should be heard, and I will do my best to make that happen. If I have the right to my voice being heard, so do others, even those I disagree with.

The ECC has said that this part of the NU4 selection process will be slightly delayed because it is important we get it right.

Oh and I don’t really write short messages. heh. (feel free to PM me for my email or if you just want to keep the discussion on the forum but in private)



As far as I can tell, this was not actually stated in the proposal. Maybe you could write a practical summary, focused solely on the concrete details of Blocktown’s envisioned setup? The existing high-level summary is mainly philosophical.

Ideally, well-balanced governance of Zcash.

Camp “it ain’t that simple.” Consider this example:

  • Bitcoin debuted in January 2009 (as a live blockchain).
  • Five years later, in the beginning of 2014, the price was ~$770 USD.
  • If someone predicted in January 2014 that BTC would reach $7,700 by 2016, they would have been wrong and stayed wrong until late 2017.
  • What if that person was counting on a 10x price increase by January 2016 to fund operations in 2016, 2017, and beyond? They’d be in big trouble for about two years.

Directionally correct is not good enough, unless you have the luxury of a long time horizon. If you need the money in a couple of years (which ECC has said it does), the timing matters.

I’m not even saying that Blocktown’s price projections are implausible. But they’re projections, which is a fancy word for “guess.” We can’t take guesses out of this process — it’s impossible to know the future — but we should acknowledge the risks.

I agree. This detail may have gotten lost in the proposal.

Our proposal for a decreased dev fund of 10% is only hardcoded for the next 4 years (2020-2024). We do believe that whatever decision is made for this halving though will set a precedent for the future halvings (e.g 2024, 2028…).

If it remains at 20% for 2020, then we believe the precedent will be set for 20% again come 2024.

If it is decreased to 10% for 2020, then we believe the precedent will be set for a continual halving of the percentage every 4 years. (e.g. 10% for 2020-2024, 5% for 2024-2028).

Nevertheless, it will ultimately still be up to the zcash governance system to determine if they follow precedents. This is why we didn’t specifically outline a roadmap on this beyond 2024.


I have seen similar proposals. I haven’t had the time I wanted to work on your stuff. but I get the core of it.

Once I have that in some kind of state you think represents your ideas (wont take long but wont happen until tomorrow uk time) - we can go over the nuance of it, if you like. Sorry if it seems like I am forcing myself on this, it is not my intent.

I want your proposal to at least be considered. The ECC are looking over stuff at the moment. So by removing a lot of the extra stuff and pinning down the detail on the reasoning you should get some really good feedback from the ECC and Foundation.


Thanks! We are actually putting together a proposal that adheres to the guidelines and clearly articulates our proposed path forward for Zcash. It will be pretty concise.

As it has been mentioned before, our proposal at the top of this thread is more the background/philosophy supporting our selection of a 10% dev fund after the halving. In any case, we plan on releasing the more detailed proposal by Thursday. If you don’t mind, I’d like to run it by you before we publish to get your thoughts/comments.

-James Todaro


Cool, that would be really good. Saves me some work too.

I’d love to give it a look over for you. no worries at all. Glad you are engaging in the community after getting a bit of a ‘baptism of fire’ as it were.