As Zcash has gone down the road to full token holder based governance, offchain mechanisms have been put in place until THV (Token Holder Voting) could be securely implemented.
Since then, THV tooling has been built, and while it is still rough around the edges, it has been used to securely vote on the retroactive grants process, with a ~7.5% participation rate in the last vote.
Meanwhile, the ZCG (Zcash Grants Committee) consisting of 5 delegates is voted on by ZCAP (Zcash Community Advisory Panel) which is a group of 50-300?? people that vote on the ZCG candidates.
Criteria for eligibility on the voting panel includes being active in the grants system in some way, or the forums (which is largely comprised of people involved in grants receiving or reviewing).
This system worked for the time it was implemented, but as Zcash grows in scale, the incentives that link ZCG, ZCAP and Grantees are designed such that a “revolving door” economy is surely inevitable, leading to the devbox becoming a corrupt tax on token holders.
Therefore I propose that it is the correct time to upgrade the ZCG election process to use the now functional THV system and deprecate the FCAP electorate.
This is an easy step to make progress on THV that does not require significant undertaking to implement. It would not involve any change to the ZCG committee, only a change in how they are elected.
As a next step, I invite ideas for concrete logistics on the proposal to be put forward for a token holder vote.
I assume you mean ZCAP here. ZCAP is a panel of community members established by the Zcash Foundation (ZF) as a means of soliciting advisory input from the Zcash community. Regardless of how ZCG members are elected ZCAP will continue to exist and have an advisory and consensus-gathering role in the Zcash community.
I’ll also note that coin holder voting is not the sole method of determining consensus in the Zcash community. ZCAP and ZAC both have roles.
Based on the lopsided distribution of wealth shown during the retroactive grants voting, this seems like a bad idea.
Until it becomes better balanced then it would essentially give a few whales like @outgoing.doze (no offense) great influence on who sits on ZCG and who gets reimbursed by the Retroactive Grants program.
I agree with @Shawn. I also don’t think calling out ZCAP’s cardinality is a good argument here.
See:
Across all 9 questions, if you de-duplicate voters across proposals, the maximum electorate per question is 40 unique coinholders.
So, even with all its flaws, ZCAP is currently more decentralized in the “many independent minds” sense than what we’ve actually seen from THV so far. Yes, ZCAP is gatekept and THV is permissionless but those are different axes (membership vs. headcount vs. stake concentration) that all require considering.
IMO for THV to be truly representative of where the community is at with anything, we would need roughly:
~100Ă— the number of unique voters, and
probably 2–3× the total ZEC participating,
before I would support moving something as important as ZCG elections over to it.
It looks like the last vote had ~80 active ZCAP voters and ~40 active THV.
I absolutely want to see better voter tooling and participation, but the THV numbers don’t take into account implicit or explicit delegation. People don’t vote when they are confident other voters will vote their way. This is why I still think delegations and elections is important, you do want people who job it is to just pay attention.
On the other hand the weakness with ZCAP is there is no proof of skin in the game. Those voters may hold zero ZEC and they may have financial interests besides the improvement of Zcash. The THV proves they have ZEC at stake which is a strong incentive.
Overall, cardinality argument as it is seems weak for both ZCAP and THV. However the revolving door concern is unique to ZCAP.
Another key difference between those two is the 80 participants on ZCAP each had an equal vote, So the results are a better representation of consensus of the group.
The tally of participants in THV isn’t as relevant because not all of them have equal voting power. You could have had 5,000 people voting with small amounts of ZEC to only be overruled by one or two with 100k ZEC.
That proposal was part of a broader governance proposal, and with our current setup where there is more direct coinholder control in the retroactive grants process I think maybe I would even reduce it to just 1, but I still believe it is valuable to have some representation of coinholders on the ZCG.
Groups and committees are generally good for maintaining status quo and making obvious decisions: keep the lights running and avoid clear existential crises.
Markets are much better at selecting non-obvious truths and promoting them. The reason markets work is because someone with well calibrated judgement can take a small amount of money and make it a large amount of money.
I prefer to trust the judgement of voters who are good at making money, that is a rare sense of judgment that can’t be found on any committee.
in particular, we need to wisely allocate this dev tax so that it benefits Zcash which requires good judgment of capital allocation. Who is a better judge of Zcash capital allocation than the whales of Zcash? Who has the most skin in the game to make sure it gets done correctly?
The devbox has long been a source of narrative weakness for Zcash as outsiders view it as a looting mechanism for insiders. As I learn more about the mechanics of this committee I have to say that on paper it looks very much like a looting mechanic for insiders.
When you combine the mechanics with the results, eg. we don’t have a functioning shielded block explorer, it really makes me wonder what exactly the ZCG has spent money on and why.
This is not how we defeat the accusations that the devbox is a looting mechanism.
We could also just delete the devbox altogether! I would rather we make it a strength.
Coin holder voting still feels unpolished and clunky. Revealing the seed phrase to third party software and the requirement to move coins/update notes is a bummer.
I like that we are going this route and I support it but it has to get more accessible and easier to vote. It needs to be integrated into the wallets with good UX.
Right now coin holder influence over grant decisions is limited to 12% of the block rewards which seems fair (for now). ZCAP/ZCG diversifies decision making with the other 8%.
I was mulling over this thread since created but that statement is neatly expressing my thoughts on the current voting. It’s amazing that it works, but it’s also “unpolished and clunky”. I think it’s perfectly normal as we are just getting started and I expect the UX to improve.
The other thought that I have been having is that honestly, I don’t really know what is ZCG and I never cared to look because it’s not part of the protocol and it’s KYC’d; not my cuppa tea. Now, with that being said, I also have a good amount of respect for it because I have observed a fair number of people on the forum are part of ZCG and they seem aligned with the project, it feels like they are doing good work and they care about the ecosystem.
All this to say, as it relates to spending stakeholders funds, it’s always been a simple equation for me: it has to be controlled by those who give that money through the inflation. Stakeholders.
How? Kind of up to ZCG. Whatever is less disruptive to their work, and stakeholders don’t need to get involved in every possible spending either. But somewhere in the flow of the money, stakeholders have to have control over the on/off.
It doesn’t have to happen right away either, but we should certainly start planning for this, and discussing how it would work ideally.
Misuses ZEC ownership as a measure of “skin in the game.”
Coin voting is not ready for prime time.
To begin, I’d like to point out something you already know based on what you wrote in another post. All the hard power over Zcash is in the hands of the miners.
The rest of the governance groups here are, for better or worse, just advisors to the miners. The miners can run whatever software they want, and the longest chain wins. For this reason, I suggest to anyone who would like to have some real and absolute control over Zcash, buy some mining rigs and vote with your hash power!
When you buy ZEC, unless and until Crosslink is implemented, you’re ultimately just along for the ride. The only hard power you do have is to sell your ZEC and then do whatever else it is that you want to do with your money. (As an aside, @thowar2, I find it odd that as a ZEC owner advocating for more power for ZEC owners, you’d not be in favor of Crosslink, but I suppose that’s for another discussion in another thread.) It’s true, you can participate in coin-weighted voting (a.k.a. THV), but as I say, really that’s just advice to the miners; they can still do as they please.
So given that the miners have all the real power, the question that we have is how do the rest of the interest groups (ZEC owners, ZCAP members, forum posters, Zashi users, software developers, ECC employees, etc.) advise them through governance? One thing that I like about Zcash governance is that it is, awkwardly, decentralized. Zodlers can distribute funds through coin-weighted voting. ZCAP members can elect ZCG members. Anyone can become a ZCAP member just by posting a lot on the forum with good feedback. ZCG members are accountable to the community. The software publishers in the community–ZF, ECC, Shielded Labs, etc.–also have a large amount of power just by publishing software that follows certain protocols or has certain features and not others. Senior software architects and engineers also have their own say through their knowledge and hard work. Is this all “governance”? I don’t know, but each is for sure an example of power. Community norms also have power. Zcash does a hard fork every 90 days. Every 90 days, those miners get to switch what software they run. Or not. Despite the trendy narrative, this is not Bitcoin.
When I rejoined the Zcash community over two years ago, I was amazed at all this, and it took me a while to appreciate how this web of dispersed power across a diverse group of interested parties functions. I see you joined the forum in October. Welcome! I spent the first year of my time back in the community doing a lot of listening and not that much talking. It takes a bit of time to see how things work. (I still don’t do much talking, but with our project’s next phase, that’s going to change.)
What you propose, given this diverse and admittedly awkward governance model, is to centralize power more by shifting power away from the other parties and into the hands of ZEC owners. Your argument for this is that ZEC owners are better aligned than these other groups to promote Zcash. Let’s look at this.
You say,
Here’s the thing though. Yes, what you imagine is possible, but is there any evidence that it has happened or is about to happen? No. None. You are proposing to fix something that is not yet broken, at the expense of decentralization.
Now let’s look at your “skin in the game” theory:
Let me give you two counter-examples, of groups who don’t own much ZEC but definitely have “skin in the game.” I just returned from DevConnect in Argentina, and while there, I spent most of my time meeting up with Zcashers. There were a number of Zcash users there who actually use ZEC in commerce, as a medium of exchange. They told me that they have not benefited from the recent 10x increase in the price because they do not zodl–they are too poor to be able to afford to do so. They are paid in ZEC, and they pay in ZEC, and they use Zashi, but like so many people all over the world, they have trouble saving. I’m not going to dox these people, but I’ll tell you that one uses it for safety, and another devotes their professional life to promoting private payment currencies. How can you argue that these people do not have proof of “skin in the game”?
As another example, let’s look at me. My company is building red·bridge, connecting Zcash in a decentralized and robust manner to the rest of crypto. We are funded by ZCG, Avalanche Foundation, and a substantial investment of my own. Not only have I invested my own funds, but I’ve been living a low-income life for the past two years in order to launch this startup. When I go to Zcash events, I stay in an Airbnb instead of at the fancy hotel. When I fly, I sit in the back of the plane. I spend most of my work time focused on launching red·bridge. As a VC, I know you understand that this is just how it goes when you launch a startup, and I am fine with the grind. However, it is highly extraordinarily extremely inaccurate to characterize me, with my small stash of ZEC, as not having that much “skin in the game.”
Finally, let’s look at your solution, coin-weighted voting (THV). You write above that
But let’s look at what you wrote a week ago:
So your proposal doesn’t just centralize power in the hands of ZEC owners but in the hands of the few ZEC owners who managed to figure out how to even use the software. Not good.
In summary, your proposal does not make sense to me for these reasons:
Increases the centralization of decision-making.
No evidence of actual problem.
Misuses ZEC ownership as a measure of “skin in the game.”
Coin voting is not ready for prime time.
So with this proposal making so little sense to me, it looks, at best, uninformed. I hope you take some time to learn more about and appreciate the hard work that’s been done over Zcash’s down-only years to prevent centralization of governance power into any one group’s hands.
Most of the real conversations happen on X - but the most involved forum community members have no idea what the facing public thinks about the project. Zcash was an insular project - I left the forums 5 years ago over this.
The price of Zcash as “Encrypted bitcoin” or “Hedge against bitcoin” is $500. Price of Zcash as forum community circle jerk is $50.
By far the hardest sell to Bitcoin OGs is the foundation involvement of funding. They have 0 problem with token holder voting. Turning this over to voters is the single best thing we can do for Zcash.
These governance discussions are happening in several threads and on X, so I’m cross-posting here too (not everyone follows every thread).
The discussion on governance is both exciting and absolutely decisive for Zcash’s future.
It’s not only about who votes and how; it’s about the whole design of power, incentives, and decision-making.
A few days ago I posted a short note on this topic under my candidacy thread:
During the December 4 community call (or in a follow-up note) I will share a concrete proposal on how we could approach governance evolution deliberately, carefully, and together.
1 - Zcash’s run from $50 to $500 was driven by the “encrypted bitcoin / bitcoin hedge” narrative. That’s what resonated with the broader market.
2 - The main pushback from Bitcoin holders is still perception of “funds not voted on,” ZCAP, ZCF, ZF involvement, etc. How deep you go on the forums determines how if you get a voting spot etc.
This insider dynamic is why I stepped away years ago. Insiders on these forums are rarely heavily involved to the outside crypto world.
3 - The broader conversation is happening on X. Most of the people here on the forums are soft-vying for influence that outsiders don’t understand and don’t trust.
Regardless of what the optimal governance structure is, it is by far the hardest part of the Zcash narrative to sell.
4 - It makes 0 sense to do THV on 12% of the lockbox but do forum time spent + ZF involved somehow + a bunch of other criteria to elect people for 8% of ZCG funds.
Elected by token holder voting helps us push voting into Zashi and focus on it more. THV is the entire reason I got re-involved in Zcash.
5 - I love people with the most to lose controlling the dev funds - it is aligned incentives.
6 - Many of the people driving real impact don’t have time for heavy forum participation. I’ve been to five conferences, I fight every day on X to push Zcash, and I’ve barely spent time here (I did 5 years ago until the non THV governance stuff made me quit).
Everyone I’ve met who’s been effective over the last 12 months is the same.
The false assumption is that insiders to this community are the most effective. False. The most effective people don’t have time to spend in the Zcash forums.
