Protect the integrity of the monetary base supply schedule

[zooko]

Just one point of clarification plus a couple points of disagreement. The point of clarification is that some of these “ways to redirect money away from specific recipients” have the effect of delaying issuance (right-shifting the supply curve), and others don’t. From Eran’s list:

1. simple burn: down-shift the supply curve
2. burning, but delaying the halving to restore total: right-shift the supply curve
3. distributing to past miners (within some time window): no change to supply curve
4. distributing to future miners (within some time window): right-shift the supply curve
5. redirection to discretionary spending by some designated entity: no change to supply curve
6. redirection to spending by some consensus enforced mechanisms, such as:
   a. a “shielded adoption incentivization fund” that would pay interest on ZEC held in z-addresses: no change to supply curve

While in my previous post I said that manipulating the supply down was a terrible idea, I also think (perhaps a little less strongly) that manipulating the supply to the right (delaying the issuance) is also a bad idea for the same reasons.

Remember, the vast majority of users and hodlers whose decisions impact Zcash will not have the information or the capacity to distinguish between these nuances. What is obvious to you, Eran, and to me will never be understood by the vast majority of those people whose support we need. That’s why I insist that “The monetary base needs to be extremely predictable and it needs to be extremely simple.” Anything that doesn’t change the supply curve (3, 5, and 6 in your list) qualifies.

Two points of disagreement:

@tromer

Regarding securities regulations consideration: as discussed elsewhere there is a big difference between burning done by an “ [active participant that] controls the creation and issuance of the digital asset ” (quoting the SEC framework) versus having a community-approved consensus rule that does so automatically and without the discretion of any participant.

As Swihart previously replied that’s not necessarily what we’ve learned from legal counsel, and we would advise against coming up with your own legal theories.

@tromer

Distributing to past miners isn’t great in terms of incentives (unlike distributing to future miners, it doesn’t increase security), and it also may create operational and tax issues by “airdropping” coins on people who happened to do some mining a year before.

Disagree. Inasmuch as this “redirect coins away from other people” consensus rule is predictable, then it incentivizes miners in advance and it is part of their normal operations and taxes.

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Frankly, all of the proposals I’ve seen for “redirecting coins away from certain recipients” seem overly complicated and likely to have unintended consequences. The simplest solution to all of this is “just don’t do that”. If we really think it is so important that it is worth the complication (a lesson I’m continually learning: whatever it is, it is almost never worth the complication ), then I still strongly suggest we keep the overall supply curve as close to unchanged as possible.