Also want to add that since the ECC is currently receiving ~12% of the Founders Reward and the Foundation is receiving about ~15% of the Founders Reward, they would actually receive more total coins in the proposal I posted above, even after taking into account the halving.
I think that having more coins directed toward engineering the protocol (vs to investors and advisors) is a very good thing.
@jmsjsph, respectfully, I don’t like the idea of only funding the foundation. The ECC does a lot of essential work for zcash. If only the foundation received funds, I suspect they would end up just paying the company on a contract basis to continue their essential work maintaining the protocol. Also, though the foundation seems to be made up of great people, I wouldn’t want to be in a position where there is even a chance of the single source of funding going rogue like the unfortunate situation that happened to tezos.
Zcash is still in its infancy and the company and foundation are both functional and doing good work right now. I wouldn’t want to distract them with complicated temporary governance plans, but would rather they focus on engineering and build something sustainable to get the funding mechanism more decentralized in the future.
I have seen that the zcash engineers have some amazing plans for the future of zcash (e.g. more programability and scalability such as seen here Protocol Team · GitHub). I think that they have good intentions and we can trust them to use the funds from years 5 through 8 to continue to build zcash into the best possible privacy cybercoin.
Hello Zooko. It seems to me that you did not understand what I wanted to say in the first post, so you answered the general question about value, but even in this case, how the coin owners don’t describe the value correctly, you as the recipient of coins that were not on the stock exchange have value that was not formed according to your rules, right?
The value of the coins is formed by current buyers, because the rough calculation of all the coins at the current price is fundamentally wrong. An example that I described earlier is suitable, where do you have all the coins in your hands and do you trade yourself forming a value, sold 1 coin for $ 100 and got a value formation for all the others? The value of the coin determines the current buyer, and the overall demand.
Now zcash has a low demand, so inflation matters, but by increasing the demand for a coin, the value of all TRADING (because not all the mass of coins participated in the auction) will increase, the coin holders do not influence the value, as soon as the holder starts to trade therefore, as a holder, I disagree with your statement, logically it is not.
It would be more correct to specify the distribution as a tax, the tax on launching the protocol (coins) is 10% of the total weight of the coins and the turnover tax is X% of the transaction, because the distribution of the coins does not need to be converted into the value of these coins, so that no confusion would arise recipients receive in zcash and not in dollars because it is.
Thanks for the answer.
Welcome to the Zcash Community Forum aka an introduction to modern encryption! I think we’ve all considered that (or similiar) and it’s definitely not off the table so to speak
This would result in another 1,050,000 ZEC for funding. At the current exchange price of ~US$ 86 an estiminated $90,000,000.
I find it more than strange that there are proposals without us even knowing how much is needed for development. I have asked this bevor and ask it now again: How much funding is needed to finish the product?
If you need a loan from your bank or funds from an investor the very first thing you need is a plan, a detailed budget and and and. This is non different than asking for an extension/transforming of the Founders Reward.
Fine. Leaves still the question: The current Founder Reward is still good for 1 and a half year, WHY are there not made right now any changes/modificiations/shiftings of funds from this huge FR?
The most common thing every single company is doing bevor reaching out to banks and external money is re-organizing internally. I’am not aware of any internal shifting of the current Founders Reward to ensure more funds for development.
Fine, but again, why is this not done allredy today with the current Founders Reward or at least modified? Currently not changing anything doesn’t show any incentive from the current FR receivers, why should the community change something after the people in charge don’t change anything themself?
The founders reward when it expires will have generated funds of about US$ 300,000,000 value. Maybe even more at the current exchange rate. How it comes nobody has forseen that researchers and engineers need longer as expected and must be paid longer and as a result of this proper funding for allocated properly?
I wouldn’t bet on this one. There is allways the point that both fail.
Way not saying it directly and name it contiouns funding forever? Just say it clear that at the end 4.2M ZEC went for funding and 80% to miners and not 90% as promised and stated everywhere.
Ever thought that the current FR distribution is totally flawed by design? No incentive to change this for the next 18 months makes it even worse!
This point contains logic but leaves the question why have a foundation at all than? Is it really worth to maintain 2 structures to maintain 1 project? IF the ECC will be in charge of Zcash there is little to no reason to have a foundation at all. If the project continous to be fully centralized it doesn’t make sense to sponsor the foundation. As a side effect it would break as well another promise that after 2020 the foundation is in charge, not?
While i think the Zcash engineers are top notch someone can argue as well that more or less every single project is working exactly on this, more privacy, more programability, more scalability.
Just some side notes to have in mind with your proposal:
1.) Zcash would for sure be the currency with the most broken promises. Actually it would be the one that didn’t held to a single one. Asic resistance (fail), 90% to miners (fail), Foundation in charge after 4 years (fail), decentralization (fail).
2.) Mining will be fully and absolutly centralized. The less is left for miners the more the miners in very low electricity price regions, especially china profit and the more of miners in the rest of the world gets forced out. I personally consider this a security risk and unfair distribution.
3.) After we have a flawed design by default someone could ask if it wouldn’t be better to support Ycash which adresses and tries to fix these flaws with the same starting tech Zcash has.
My personally opinion is and i wrote this allready the last 6-9 months in different posts that a discussion about an extension or transforming of the founders reward/dev reward should just and only take place after a full discloser on how the current funds of the whole FR have been used and additionally a re-organizing of the current FR is done until it expires.
Quoting the “Financial Sustainability” section of ECC’s transparency report (emphasis added by me):
We also approached FR recipients to request dilution in order to allocate additional funds to allow the Electric Coin Company the ability to continue to operate and invest in Zcash R&D, engineering and
adoption. This dilution will take place in June.
Putting aside the point of whether ECC can be “in charge” of the network (users have full control to decide what software they run), the intention is that ECC won’t be solely in charge of the Zcash trademark and consensus protocol:
When was this ever promised? Discussions around the Zcash Foundation’s role in the ecosystem were AFAIR always about how it would become an equally-prominent and influentiual participant. If there had been a promise that after 2020 the ZF would be in charge, this would by definition be anti-decentralisation.
Without outcome nothing happened so far. Let’s see how this request works out. It’s a step into the right direction in my opinion and a good start. A bit late but than again, better late than never.
You are right here, seems this is my own interpretation of what happens when the FR expires in 2020.
Seems i put these sentencenes (below) into the wrong affilation.
The Zcash Company is a good vehicle to draw this team together, organize us, and launch the technology, but in the long run Zcash will need to be maintained by people who are serving the interests of all users equally. …foundation will be organized, but the intent is that it will provide a natural locus for voluntary governance, i.e. for maintenance and evolution of the protocols and software. I hope that having a well-funded non-profit foundation dedicated to serving the interests of all Zcash users will avoid some of the uncertainties…
As said, sorry that my interpretation of this statement, especially the wording launch the technology is interpreted for the first 4 years and the the role of the foundation after that. Seems this is not the case and my English is very bad to understand such elementary sentences correctly … 
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
Hi @boxalex,
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. Electric Coin Company Q2 2019 Transparency Report - Electric Coin Company
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?
Hi,
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.
cheers
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
Very fair,
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.
