20% is WAY too high. Currently ECC receives 4.2% of the total mining supply, and any future block rewards to fund development should NOT be more than that, IMO. Given that the halving will occur in 2020, the price should appreciate considerably… so I would argue that if we decide a % of block rewards go to fund development (via ECC / ZF), the total should be LESS than 4.2%. I would argue for something like 1%, if at all.
The time for investors & advisors is over, but the need for research, development, adoption, operations, legal etc will always be there.
My 2 zats worth - funding should continue but at a lower level & that should come from block rewards.
ECC should also develop additional revenue streams, especially where their help/expertise is used by other projects or for-profit entities.
It’s got such a good growth
I don’t think anyone can answer your question “How much funding is needed to finish the product?”, because anyone familiar with software development knows that the product is never really finished and will always need the support of skilled developers.
I think that by the end of the first 4 years of Zcash the team will have delivered on their initial promise of building a solid privacy cybercoin with fast private transactions, but I think many Zcash supporters had hopes of building the ultimate privacy cybercoin with many more features. Do you really want to stop development here and go into a “maintenance only” funding mode? You don’t want the world class team to make the coin much more scalable and programable?
To be blunt, I think that this type of attitude would damage the coin and the price would plummet. I wouldn’t not want to own a coin that is stagnating. I want to own a coin that has a world class team of researchers and developers supporting it.
Given that there are always more technical features to add to the coin, and the volatile price of zec, I don’t want to be ‘penny wise and pound foolish’ with development funding at this stage. There is no way to know the exact price of zec in the future, and I think we should be happy if there turns out to be a ‘problem’ of excessive funding for development.
I think that splitting the funding between the company and foundation for the next 4 years provides sufficient funding decentralization at this stage, with the expectation of much more funding decentralization in the future.
By the way, I think that we, the zcash community, are right to have a say in what happens with funding for the future of zcash. It is our coin. We are right to be concerned that the interests of all holders of zec and aligned with the incentives of the company and the foundation.
I am thinking more about how to ensure this, especially in the wonderful scenario where the price of zec increases by 10x for example. I think that a ZIP should specify what happens if the funding levels are 10x what is needed to fund the current team. Of course, to incentivize the team to be successful, I would want them to receive some nice bonuses for their work, but I would also want the whole community to benefit from this price increase. IMHO, a good ZIP would specify what fraction of the ‘excess funds’ would go to hiring more developers, rewarding the team for good work, and maybe some sort of ‘strategic reserve’ fund in case prices go back down.
What are some other essential specifications that the community would want in a good Zcash Improvement Proposal?
Look, when someone plans a business someone MUST have an idea how much funds are needed or it just won’t work out. There is a difference if someone needs 100k per month or 10M per month. IF nobody can answer such elementary question and can make calculations there is nothing to discuss about.
The next question or better, concern, is after it’s being and endless process and the product won’t be finished really ever, why the hell the concept was just a 4 year FR reward? Sounds like a flawed design by default and doomed to fail to me IF this the product still needs ages to be finished.
To be honest i perosnally awaited at least a nearly finished product out of an estiminated FR of $300,000.000. I’am aware that this amount didn’t went into development but that’s the problem of the FR Einsteins that made such distribution.
As always there are always alternative options. Beginning from true open source project up to generating other income streams that maybe could ensure some kind of funding for development, enough the involved parties have interest and are not relying on the most easiest way, funding through block rewards.
Absolutly possible. But price isn’t the priority neither of the ECC or the foundation this shouldn’t be an issue for them.
Actually i personally absolutly agree with you here, don’t get me wrong, hence why i’am crying a river for at least 6 months now to find a solution and interestingly nobody cares about it. Foundation silence, ECC silence, community silence. Not sure what changed the last months that a sudden it got actual.
Who doesn’t. But does this justify endless funding? Nicola Tesla had some of the best inventions but died poor due lack of economical skills. So it’s not enough just to have a vision…
Exactly, hence the question, where exactly went how much of the FR until today and in future for 2020 (not only the ECC part!) and how much funds for exactly what are needed. That’s the most normal thing IF someone asks for funding. And as said above allready, the amount needed.
You forgot to include the miners in your wonderfull strategy. As an ex-miner we can see that at current prive levels most regions can’t even mine anymore. Reducing the block reward further after halving won’t make things better on the asic network leave alone all the other problems asics bring with it. The argument that price will increase after halving is poor speculation, especially for the the 1st halving.
Just as a sidenote.
About bonuses? First let’s see how much a dev/engineer/advisor/whoever got so far and what’s planned for future. Without exact numbers such proposal is not serious. You can’t make a calculation, future and business plan based on nothing. You can’t say let’s get wages and bonuses without knowing how much each is exactly. This seems a bit like a tabu as i’am not aware expect for Zooko who get’s exactly how much currently.
They should think about hiring you for marketing purposes…
We can see how the ECC funds were spent in the transparency report. https://electriccoin.co/blog/electric-coin-company-q2-2019-transparency-report/
The rest (beyond ECC) is not something they will likely be disclosing so I wouldn’t put my hopes on more granular information about how every founder/investor spent thier funds.
You can also see the section about sustainability to see how much they think will be enough to keep ECC (and the Foundation) going:
If we can see it just share how many people are paid by the 62% Employee wages and i can at least make an average wages calculation to begin with …
I’am as well unable to calculate the bonuses/additional compensation of 3,000 ZEC monthly (at the time of the report aprox. $180,000 per month).
That’s ok, it was a suggestion on explaining the lack of funds for further development. It’s not me asking for further development funds. IF the people don’t think it’s necessary to share for what exactly the Founders Reward was used than i wouldn’t as well give too much hope that the larger community fully backs up such proposals. But that’s just my opinion of course, others might be ok and fully support further funding or not being interest in why an estiminated $300,000,000 FR wasn’t enough to get further at all. Possible…
These are the numbers of the current state. Luckly at the current exchange rate at least there shouldn’t be anymore a deficit, still something. Without a clear statement i’am not sure if the current numbers fit into future plans as well, hence asking for an estiminated number of how much funds for what period they think is needed.
Edit: Just a thought after reading that transparency report again. Is there a reason it’s called “transparency report” and not “profit & loss statement”. Is there anywhere a balance sheet & cash flow statement or is this too much asked and not planned?
I think I understand what you are getting at, please correct me if I am wrong.
Am I fair in rephrasing this as “Mining new blocks dilutes the total supply, therefore, coin holders are paying towards FR via dilution”? - If it isnt fair then this post is probably irrelevant but might show what I am not considering properly.
The counter point would be that issuance of coins does not dilute the funds of others. That would be true if and /only/ if there was no total limit on supply.
The argument being, because there is a limit on total supply it is effectively the opposite of what you are proposing. Mining new coins increases the value of old coins because you are getting closer to running the well dry of new coins. (I am not an economist, this is just a counter using the same logic)
by value, we mean fiat value right? Be able to live, kinda thing? Everyone has to eat.
They are the only two mechanisms which the cybercoin has to interact with the consensus rules. Unless you are running a service layer within those rules. (something initially in bitcoin then dropped for security.)
Yes, I suppose for a ledger/fixed cap only blockchain.
Im not sure a lot of people know that the mining block “reward” for bitcoin was never meant to be the source of value. That was to come from transaction fees. The block rewards were meant to distribute the coin and encourage people to send coins to each other, this is why it started out so high and kept halving. - This model might not be ideal for successor coins.
In theory the value of all coins exist if they have been mined yet or not, as long as there is a cap on total supply.
If ECC wants to get funding from coin holders, or coin users they are going to have to either; break their initial contract or find new revenue streams. (I have some ideas, I will create a thread for people to put any idea they like up. one idea might prove useful.)
I know Im one of many who have proposed that idea, but that was before I was reminded of 90% of all mining rewards go to miners. You need a genuine opt-in and not a hobsons choice this time around.
//Stuff about Eth and funding below here.
With a system like Ethereum you can have a self sustaining, decentralised, nonhuman financial governance (in theory at least) - eliminating part of the problem. Sure it doesn’t solve where the rewards come from.
You might, for example, give rewards based off things like, unit test passes, integration testing, writing unit tests, translating a document, verifying results manually, etc.
You kinda have something like this already with the ton of tickets i keep seeing for unit test passing on the dev list. So it could be added as a sidechain, retrofitting sounds like hard work and expensive tho.
Do the rules allow for smart contracts? I think the devil is in the details on this. Any could work or not work.
At a high level I suppose for a new coin, transaction fees maybe with an initial FR of 10% + 10% of fees, weighted over 8 - 12 years, then fees only.
Going by your screenshot.
After 10 years ~8.5% of transferred btc is transferred in mining fees.
After 4 years ~4.8% of transferred eth is transferred in mining fees.
After 2.5 years ~0.015% of transferred zec is transferred in mining fees.
this seems to indicate that mining fees might actually work, if you coin gets adoption. (I admittedly that is what I wanted to see in those numbers so it could be conformation bias.) I’d love to know the monero numbers.
For zec, I really dont know. You are stuck between a rock and a hard place.
You guys are great but can we try to keep it < 45 paragraphs per post!
Sure, I can make it all one big paragraph.
Wow, just checked, 20 line breaks. heh point taken. I will try to be more succinct.
What would the ECC like to do? I don’t presume to know, seems fair to ask
I fear people are considering breaking the 90% contract.
I would like positive affirmation from the ECC that this is not the case. And any adjustment to the rules that we are currently talking about would be opt-in - so users can select if they want some of their transaction(sender/receiver sets these), block reward or transaction fees (the miner sets this not the sender) to go to some development - or the (default) initial contract distribution is honoured.
I am all for adjusting the rules as long as the 90% contract is not broken, be that by majority vote or otherwise.
The only way any of the above could be implemented as an adjustment to the consensus rules, is for the consensus rules to specify that certain hard-coded addresses may optionally be present as outputs. But if it’s optional, then it’s basically useless as a consensus rule. Users and mining pools are already free to optionally add addresses as outputs to their transactions (a few wallets have done this in the past as “dev fees”, and IIRC some mining pools in the Grin network opt to donate a small percentage of their profits to developers). The only marginal benefit it provides would be having a globally-agreed-upon list of receiving addresses - but users can by definition ignore those and just create equivalent outputs to different addresses.
(As a side-note, miners wouldn’t get to set anything; it’s the mining pools that create the coinbase transactions and choose a policy. Miners could at most move their mining power to a different pool with a different policy, or solo-mine with significantly less efficiency (and thus incentive to do so) unless they are large enough that they are effectively their own mining pool.)
Tying this back to what @acityinohio stated about the Zcash Foundation’s position:
Any opt-in proposal where the opt-in process is not “user chooses to upgrade to a version of the node software that will follow a Network Upgrade activating this proposal” should IMHO not be proposed as a consensus rule change, because it adds needless complexity for no useful benefit. I think it would be valuable for @acityinohio to clarify the above statement, because if it is referring to local on-demand opt-in (as @mistfpga is referring to), this implies (in my view) that the ZF would only support proposals that do not change the consensus rules.
 I am specifically ignoring consensus rule changes that would create some kind of dynamic in-network decision-making process (a la Tezos) to decide when to turn on or off some kind of funding, because that is an extension of consensus-making and is not a local opt-in decision like @mistfpga was referring to.
I posted some notes on the dev fund topic here:
https://medium.com/@socrates1024/here-are-a-couple-of-points-on-framing-the-discussion-of-a-potential-new-dev-fund-in-zcash-c13bcbf4ed5b (just my own thoughts, not on behalf of the Foundation). To summarize:
- The dev fund question is best viewed as a negotiation. It’s a good idea if it adds more value than it costs. The no deal option, where (speculating here) ECC does something else after next year, and others (including Zcash Foundation) do maintenance and improvement, is a fine option, which is good because we start from a good negotiating position. Several other commenters in this post have been discussing along these lines: what would be the cost of a dev fund? If it goes to one entity, how much of that is overhead vs goes to engineers (or other activities like marketing)? What would we want to get out of it? Another upgrade on the same scope/quality as Sapling? Who else besides ECC could compete for this?
- The trademark policy will probably play an important role. While the community (node operators, miners, exchanges, wallet devs, etc.) get the final say on what software to run, “the community” is hard to define precisely and it’s clearly a lot harder to coordinate without at least unity over the name and symbol. Lacking any other better model for community ownership of the trademark, some kind of joint-control between ECC and Zcash Foundation would be a first step. If the Zcash Foundation and ECC enter into a bilateral negotiation over a potential fork, the scope would likely be over which fork (if any) gets to stay called Zcash.
- It’s fairly unclear how best to form and recognize a community consensus but we should try anyway. Options include coin holders vote, community governance panel like we did before, miner vote, combinations of them, or other options. I think any of them are better than nothing, and that in most cases the outcome would not be sensitive to which mechanism we choose. One possibility is a community consensus could start from outside, e.g. a petition or ad hoc miner vote, and be adopted after the fact by the Foundation.
To summarize: My view of an ideal outcome is that ECC and Zcash Foundation agree on a process for recognizing Zcash community consensus, and in case of a fork, pledge to license the trademark to describe the community’s chosen fork. This would serve as the basis for a negotiation between the Zcash community and any potential development firm hired by the community through a new dev fund.
We would support proposals that change consensus rules if there’s overwhelming consensus to do so, but specifically in the case of opt-in we were imagining some flag for users (to enable in their transactions) and/or miners (in their coinbase transactions) that would determine whether funds are awarded to a potential future dev fund (and at what proportion to potential recipients). A scheme along these lines would definitely require a consensus change.
I understand the concern about complexity, but in our view this would preserve user choice and provide important signaling for the ECC, Zcash Foundation, and any other recipient of a future fund. Note that others associated with the Foundation may have more detailed or nuanced personal views (see @amiller’s comment above), but this was the consensus reached by the Zcash Foundation Board of Directors on how we’d approach the possibility of a new dev fund.
@battbot, I am surprised that you, and apparently several others, are concerned about the development funding levels being too high? Wouldn’t you want to to err on the side of having too much funding than having too little funding?
I am getting the sense that some people think having ample funding for development is ‘unfair’ to the miners. It’s interesting that no one has said “giving 20% of newly mined coins to a development fund will decrease the security of zcash to unacceptable levels”. It seems to be about a sense of what is “fair” (and I do believe having a sense of fairness is important!)
1% is so low that it would cripple the project imho.
@garethtdavies I just came across your interesting idea of funding development with a fixed $ amount of zec. Are you concerned that wouldn’t have the full benefit of aligning the incentives of zec holders with the developers, since they would get the same number of dollars regardless of how their work impacts the price of zec?
(btw thank you for getting this conversation started many months ago! )
I don’t think that was me. I’ve always been a fan of % of block rewards. I can’t seem to find where this was brought up though to give proper attribution.
I could certainly support your plan. I’m more on the fence of % of distribution between Foundation/ECC mainly due to the accountability of the Foundation where there could for example be a greater representation on the Board for all interests (where ECC remains a private for-profit company). Being pragmatic though, ECC has basically done all of the development, so any solution without them is frankly worthless and maybe these concerns can be addressed in other ways.
I can’t take credit for that either but I do think we need concrete proposals sooner rather than later.
I don’t feel strongly about the 50/50 split that I suggested, and I share you concern about accountability. (I do trust Zooko and the company to act in good faith in the best interest of Zcash, but it would be irresponsible to not have some checks and balances). Perhaps it would make sense to shift a little more towards the foundation, with the expectation that some of those funds would go toward contract work with the company.
The thing I feel pretty strongly about is making sure that there is enough funding to build all of the things that the community wants for Zcash.