Staked Poll on Zcash Dev Fund Debate

Hmmm… “plutocracy”.

You keep using that word…


‘A plutocracy (Greek: πλοῦτος, ploutos , ‘wealth’ + κράτος, kratos , ‘power’) or plutarchy is a society that is ruled or controlled by people of great wealth or income.’

Plutocracy has historically been applied to the rule of “societies” in the sense of political authority. While policies governing the regulation of cryptocurrencies have interesting, and sometimes poorly understood relationships to historical political regulation… they are not the same thing. Exapting a specific term, which has A: Always been associated with political governance, and B: Has almost always been used pejoratively, is not bringing clarity to the important arguments we as a community are engaged in to discover new insights.

I strongly believe that we argue, not to best each other socially, but to enhance our own understanding and those of observers.

The term “plutocracy” is sufficiently related to concepts we need to understand, and sufficiently both different from the actual concept and pejorative, to impose a cost on our efforts to obtain new understandings.

I vote we all reconsider what we mean when we use the word, and try to use it sparingly and consciously.

I have a similar opinion about the term “whale” which I believe is extremely common in forums I try not to visit too often.

In general I think terms that derive a significant component of their salience from their pejorative resonance, are less likely to be useful for expanding understanding than alternatives.


Please see my reply to @vbuterin in this thread.

I think the use of the term “whale” to marginalize a group of people… in this case people who have staked a large amount of wealth in zcash, but also in more general parlance, is troubling.

In general I am a big fan of diversity, and in general, I believe marginalization is a process whereby outliers are suppressed, in favor of norms.


While on the subject of semantic critique, I’d like to question the term “stake” in the current context. As in “staked voting/polling”, or “staked a large amount of wealth in zcash” as @zancas wrote above.

For the kind of vote we had here, where the ZEC position only needed to be held for a few minutes at an (ideally…) pre-specified time, there’s nothing really at stake. The voters are free to convert other assets to ZEC for those few minutes, and then convert back. They are also free to loan ZEC for a brief period, and indeed for traditional company stocks, there are efficient markets for doing just this around stock-weighted votes.

So you can call it “coin-holding-weighted voting”. Given an efficient market, you’d recognize it as “pay-to-vote”. But please don’t call it “staked voting” or “stake-weighted voting”, these are just incorrect and misleading.


Thank you for making this point. I used to feel this way too about the use of “whale” in cryptocurrency, but recently I’ve come to think it doesn’t have the same pejorative meaning in this world as it does in others like gambling or mobile games. There the idea is that whales are profitable repeat customers. Here it’s because of their potential effect on the overall market.

By definition, a cryptocurrency whale is a term used to refer to individuals, or entities, that hold large amounts of digital currencies. Both feared and marvelled upon in equal measure, much like the marine mammals with whom they share a namesake, Bitcoin whales move around the cryptocurrency space causing waves at every turn.

So I think “whale” isn’t pejorative at all, quite the opposite. If anything I think it’s exaggerating the turnout here. But everyone who participated in this experiment (despite the hazards and inconvenience) is a whale in my book :slightly_smiling_face:

I’m curious now what it would have cost to borrow 1.39% of the ZEC for a few days, assuming that’s how you would pay-to-vote. Would that cost more or less than renting 1.39% of the mining hashpower?

Anyway, I don’t understand the distinction you’re making between “stake-weighted” and “coin-holder-weighted”? You could borrow some stake to vote with, but it’s still stake even if it’s borrowed

Going rates for crypto loans are 5-10% annualized, which is less than ZEC inflation so probably cheaper than mining. I don’t really know how deep is the ZEC loan market, but loans on the order of 1,000 ZEC are readily available on retail platforms, so I would guess that OTCs/institutionals would be a couple of orders of magnitude higher, which reaches what you ask for.

Anyway, this isn’t about what’s readily available now, it’s about what we expect to become available given demand and efficient markets.

Anyway, I don’t understand the distinction you’re making between “stake-weighted” and “coin-holder-weighted”? You could borrow some stake to vote with, but it’s still stake even if it’s borrowed

It doesn’t matter here whether the ZEC is borrowed or bought and then sold (though costs would be different). The point is that because it’s held for a very short duration, then the risk of a drop in value is very low (and thus also cheap to hedge, given efficient markets). So the “stake” narrative, i.e., “they put they money at risk so their opinion is worthy of weight”, doesn’t work.

As for dollar amounts: taking Binance’s ZEC margin loan rate of %0.02/day, and under the grossly simplifying assumption that you can get a similar rate for those 111,344 ZEC, and at current ZEC prices:

It would cost about $600 per day to loan all the ZEC that participated in the above poll.

That’s not a lot, for a poll that that affect who gets tens of millions of dollars (hmm maybe you can tilt it towards your friend?), that affects the future of Zcash (hmm I can imagine some that would consider this a very cheap way to anonymously sabotage financial privacy), and that can even be monetized (hmm why not vote for “crash and burn”, then keep the loan a while longer and use it to short ZEC?).


Interesting questions. I took the time with my morning tea to calculate these costs and took a random date, 25th November for the calculations:

1.36% hashpower would cost about $2.559 per day at Nicehash for rent.

Calculation: 4787Msol x 1.36% = 66.5393 Msol x 0.0054BTC per MSol/day = 0.3593BTC = 2587 US$ at a BTC price of ~$7121

1.36% of lending at Binance would cost $296 per day

Calculation: 1.36% of 7,990,056 ZEC = 108,664 ZEC x $28 = $3,042,592 x 3.5% interest per year = $106,490 per year / 360 days = $296 per day

Explaination: 3.5% anual interest is the Binance rate for 60,000 ZEC. There might be other expenses for transfering the US$ amount to a lending platform and back.

BTC to ZEC and ZEC to BTC exchange would cost about $6084 for an undefinded time period.

Calculation: 108,664 ZEC = $3.042.592 @ $28 per ZEC, 0.1% exchange fee = $3.042 x 2 = $6084

Comment on these 3 approaches:

Renting mining hashpower for a given period:

While renting the hashpower would cost $2,559 the person as well gets mined ZEC for this period (24 hours) which would be worth around $2,370 means the effective rent/expense he paid would be around $200 per day.

Lending ZEC:

While lending costs only $296 per day it could be an higher expense or even a profit due volatility.

Exchanging BTC to ZEC and ZEC to BTC:

This seems the most expensive way on first view but could be even the most profitable if done/used by a good trader as such would buy ZEC at a low price and wait for a higher price pike to sell back. Than again, it’s as well the most risky one in my opinon as buying ZEC worth of 3M US$ would for sure cause some volatility despite ZEC’s low real volume.

Added and edit after i saw the below post just when i finished mine:

I guess your binance calculation is more correct as mine was based on the interest rate someone gets without the binance profit/fee.

I agree though with everything you wrote that with the possibility of just holding ZEC for a short time someone is able to manipulate whatever he wants for a very low price.

Bitfinex lending rate is 4% per year. I think you cant take the ZEC out of their address though. I think you can only use it for margin trading or shorting ZEC. The cost of borrowing ZEC for one day when DEFI kicks in will be negligable so this kind of staking will make no sense then.
EDIT I ran some numbers.

The lending rate currently is 0.0007% per day for ETH. So the multiplier would be 0.000007. One would have to take care not to move the lending market but a week should be sufficient to do it.

Literally $7 represents $1 million at 0.0007% per day. This represents the cost of doing this. One would get 90% ETH of his stable coin staked in the contract. So one would still need a 1.11 million dollars to stake for the day to rig a million dollar vote.

Mind you rates are so low because nobody wants to short. There is not much use for borrowing crypto other than shorting it these days.


Hmmm… OK… I’m still wary of “whale”… but maybe it’s the best term, or at least a useful term.

I think “plutocracy” is less ambiguously pejorative, and therefore confusing… and maybe that’s the larger point (not that this is a carefully constructed argument, mind you), pejoratives tend to be confusing… or distracting… or obfuscating… or some such…

I have to admit that “whale” seems quite apt in many ways.

I assure you the term whale is not pejorative in any way, nor does it represent any negative quality. It simply refers to a person with a relatively large amount of coins. One does not have to be rich to be a whale for some small market cap coins.

Its simply meant to represent that that person could move the price of the coin significantly if motivated to do so.

Because when a whale (the animal) swims in the ocean it tends to make waves.

In fact smaller holders refer to themselves as dolphins, sharks, piranhas and such its all harmless fun.

Its not as pejorative as calling someone a “pig” in the traditional market for example. (This is a term that’s used to describe someone who is uneducated in his investment)


Thanks for the info!


No problem, thank you for taking your time to participate. It really means a lot to me to see successful people backing this project. I am now sure we are going to make this work.

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I’d like to point out another issue with the coin-weighted polling.

Let’s put aside the privacy and security problems; hopefully we can resolve these using new protocols (and perhaps a network upgrade to enable them). Let’s also put aside the “plutocracy” and “pay to vote” issues; maybe we’ll decide that these are acceptable, at least when the coin-weighted voting is just one non-binding signal among several. There’s still this:

The whales are silent. [1] They’re not vocal about their position. As far as I can tell, no one on the Dev Fund public discussions identified as holding significant fraction of the ZEC supply, so how can we tell in advance what’s on the mind of those whales?

Now, for a poll about a simple “yes/no” question, maybe it doesn’t matter: the question is what it is, and we’ll know the result when the poll is over. But in the Dev Fund discussion, we had complicated adaptive dynamics where proposals were created and modified based on the ongoing sentiments expressed on the forum, blog posts, Twitter, etc. Many of the final proposals were honed to those sentiments. If the whales don’t contribute to to the formation of the proposals, then perhaps none of the proposals properly reflects their perspective?

And so with “silent coin-holder-weighted poll”, things become reminiscent of ancient cultures arguing about sacrifies to the silent gods. The fields are dry? Clearly we need to sacrifice a goat. No, the gods desire a lamb. No, it must be a child! No, a maiden! So which is it? Only the gods know… And then there’s a flood, so people explain that it was because the lamb had a blemish. Perhaps, all along, the gods just wanted a nice salade niçoise?

Now, perhaps whales’ opinions are close enough to what we are hearing, and their opinions are already adequately weighted in. Maybe. The incentives are very different, so it’s hard to tell. But for what it’s worth, to the extent that the recent experiment is indicative of the whales’ opinions (despite the many reservations), we see very significant divergence between the opinions expressed there vs. the forum members and Community Governance Panel, so there’s reason for concern.

Action items?

  • Obviously, encourage the whales to show up and express their opinions (whether or not they identify as such)
  • Recognize that this is another issue with the signal quality of coin-weighted polling.
  • Strive to make the poll questions simple, with few moving parts, so that it’s more likely that some choice represents the wishes of parties who did not contribute to the formation of the poll questions

Note: all of the above applies also to miner polling.

[1] By “whale”, I mean someone who holds a large fraction of the pertinent ZEC supply; enough to significantly affect (or even dominate) a coin-weighted vote. No derogatory insinuations are intended.


The Lady of the Lake, her arm clad in the purest shimmering samite held aloft Excalibur from the bosom of the water

Strange women lying in ponds distributin’ swords is no basis for a system of government


Supreme executive power derives from a mandate from the masses not from some farcical aquatic (staking) ceremony!


Are you and @Autotunafish denying the legitimacy and authority of king Arthur?

Sounds like treason to me…


Lol at the Monty Python references. Over on the Community Sentiment thread I posted my reason for why Coin-Holders Petitioning is an important long-term strategic advantage for Zcash.


In my comment over on the Community Sentiment thread I said why I believe that Coin-Holders Petitioning is an important long-term strategic advantage for Zcash. If you hold Zcash coins and you want to participate in the Coin-Holders Petition, here is how:

First, read the Zcash Foundation’s blog post explaining what we’re voting on and the Electric Coin Company’s blog post saying why we won’t take dev fund money under a U.S. Dollar-denominated cap, and make up your mind how you want to vote.

Second, follow Andrew Miller’s instructions on how to vote with your coins (quoted below). Use zecwallet-full not zecwallet-lite.

Encoding your vote: If you put “1A2C3B4A5A” into the encrypted memo field, that would mean that you vote for answer A to question 1, answer C to question 2, etc, based on the ballot with these question numbers and answer letters:

#1 of 5: Do you support the ZIP 1014 presented here? (ZIP 1014 is a lightly modified version of ZIP 1012, which had the most support in the previous sentiment collection poll. Note that all follow up questions in this poll assume ZIP 1014 as a basis; please read it carefully before answering the rest of this poll)
A: Yes
B: No

#2 of 5: Using this ZIP as a basis, what should the distribution of the dev fund slices be?
A: ECC: 35%, MG: 40%, ZF: 25%
B: ECC: 40%, MG: 35%, ZF: 25%
C: ECC: 45%, MG: 30%, ZF: 25%
D: ECC: 50%, MG: 25%, ZF: 25%
E: Any of the above distributions is acceptable

#3 of 5: Do you believe the Foundation should have independent authority in determining Major Grants, or should there be a new Major Grant Review Committee as prescribed in this ZIP?
A: The Foundation should have independent authority in determining Major Grants
B: There should be a new Major Grant Review Committee with near-complete authority
C: Either option is acceptable

#4 of 5: Using this ZIP as a basis, should there be a US Dollar-denominated Monthly Funding Cap/Volatility Reserve for the shares to ECC, ZF, and Major Grants or should there be no restrictions? Note that ECC has indicated they plan to decline their funding if a US Dollar-denominated funding cap is imposed, while ZF has indicated that they have no issue with a funding cap. We are not measuring your approval of the specific amount of the Monthly Funding Cap in the ZIP; we are interested in your approval of the concept as a whole. The exact cap can be set by processes outlined in the ZIP.
A: There SHOULD NOT be a Monthly Funding Cap and Volatility Reserve
B: There SHOULD be a Monthly Funding Cap and Volatility Reserve
C: Either option is acceptable

#5 of 5: ECC has indicated they plan to decline their funding slice if there is a Monthly Funding Cap/Volatility Reserve restriction. If the community decides on a Monthly Funding Cap/Volatility Reserve and ECC declines their funding, where should their slice be redirected?
A: Major Grants
B: Zcash Foundation
C: Miners

You can also put whatever additional comments, explanations for why you voted that way or why you care about Zcash, Bible verses, etc. in the encrypted memo field after your encoded vote!

See also my comment on simple, actionable observations about the risks.

By the way, the deadline is Monday, January 27, but if you’ve never done something like this before, I bet it will take you a few tries over a few days to get it working, so don’t put it off til the last day.


This would be such a cool ZecWallet feature… imagine voting on anything/everything/anytime.

Edit: Closest real-world example I can think of is the Swiss who seem to vote on everything, even trivial stuff like changes to a bus route. Almost like being asked your opinion every time you use an ATM machine.