Zcash Dev Fund - Results Based Financing & Equity Proposal Amendment

[mistfpga]

Hi,

Thanks for this well thought out post. I am going to make a couple of replies, this is just to make it easier to read and follow. I am just correcting a few misconceptions in this first post. Most of it relates to the ECC and how I understand that they function. This information has be from discussions with recipients of the Founders Reward (from now on just called FR)

I really like the charitble idea that you have put forward and I certainly think a 4th entity working in tandem with the foundation is a great idea. When I talk about 4th entity in this post it is in relation into how things currently work - I know the main job of this 4th entity would be to shepherd the donations. (somewhat like the monero community thingy?) So some of my questions might seem out of context, I am trying to reframe those specific parts in current context (pre halving)

I am putting this at the top, because it is specifically in this context I am referring to your points, I am just trying to get you up to speed on a few things that probably are relevant to your proposal.

@ttmariemia

If there is a fundamental misunderstanding held within these ideas or if there’s an already-existing system I have not taken into account, or if you’ve written something similar that you > think I should review, please do not hesitate to let me know and send me links — I will read, listen, and watch everything you take the time to communicate to me.

I really like your attitude, I hope you stick around on the forums. Please PM me if I can help at all, I always keep PM’s private. I have used footnotes rather than inline quotes to make things a bit easier for you to read up on and the post a bit easier to read.

Sorry if this seems a bit disjointed there is a lot to digest in your post and I wrote this over a few days.

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In relation to the ECC as a start up, or more when it was started up these things were not really accounted for then. However they should be for the 4th entity. (this is why I am seperating out the posts.)

@ttmariemia

Auditable and measurable metrics for defining success, learnings, and pivots

the ECC does not publicly disclose these. - and it is difficult to see where we are now from where we were because of the small incremental stuff that you have to be on the very high volume dev list to notice (a metric ton of work does get done, so much so I had to unsub from the list - it is just not done in an auditable way by a lay person. This is the main issue as I see it. Any new group would need to somehow get this lay person auditability.

@ttmariemia

A governance system for accountability

There is nothing the ECC is accountable for except to distribute the FR to the specified addresses in the specified amounts. They just so happen to work on zcash technology because it enriches them because that is how they get their funding. please see footnotes [1][2]

@ttmariemia

Flexibility and freedom to pivot on short iteration cycles

They have this but wont. “all in zec” even though zooko has expressed that this used to be an option. [3]

@ttmariemia

From the Dev Fund proposal review conversation hosted by the Zcash Foundation and published on September 20, 2019, I’ve distilled some of the pain points discussed from the user-perspectives of:

what about:
5. hardware developers?

@ttmariemia

Zertilizer funding will be a set % of the Developers’ Endowment Fund.

Okay you later say this funding comes from donations. these donations have nothing to do with the current protocol? or are they somehow connected? it is not obvious to me.

@ttmariemia

Zertilizer represents a community-agreed-upon amount that will be disbursed via a voting mechanism, preferably through a smart contract, by which x-amount of ZEC is used to cast votes.

Doesnt this favour the ECC, seeing as they have potentially 20% of the current supply and the turnout for these types of things is usually very bad. Why don’t we use the mechanisms we already have? Like the foundation and community governance panel? They are not perfect. but they function and will be used for the NU4 development funding decisions. - I know you are describing a new entity, but I don’t see why they wouldn’t be bound by existing protocol in these matters rather than a 4th party.

I think you will struggle to forum a quorum for is, especially in under 24hrs. (for example, timezones)

@ttmariemia

it can be decided that a ‘voting committee’ should be appointed by the Zcash network for the purpose of managing Zertilizer funding.

Like the community governance panel?

@ttmariemia

To apply for Zertilizer developers (individuals or teams) must submit a 3-minute (max) voice memo describing:

1. The team or the individual
2. The intended development
3. The value-proposition of the development
4. The alignment of the project with the ZEC strategic roadmap (see #3 in the Recommendations Section)

Okay but how does this help retroactive development? for example radix did a lot of work for free developing a GUI for windows and mac and there was no real way for them to get paid.

I am currently having an issue with some tech we developed for another project and have adapted to zec, but we have no requirements to work from so we dont know what effort we need to put in and what we will get paid for it (and we are not looking to make a profit, but different specd devices cost different amounts). Because of this we are thinking of just dropping the zec side of the project and moving on to another project.

We welcome any new processes that would help. Most businesses use things like IBM’s DOORS to track stuff and pay people. Requirements based deliverables are much easier to test and track. you could have a whole set of unit tests that something must pass then that bit of code gets a payout from a smart contract, a human reviews the code and submits their review, again partial pay out.

The thing is Ethereum is designed for this. zcash, not so much. (I do have a post around here somewhere, i think, where I go into the ‘blue skys thinking’ on the idealised situation for smart contract distributed development. I will try to dig it out if you want to have a look.)

1. Should there be a blended approach which includes a Bounty system?

There has to be or you have created a new bigger barrier by making this ‘committee’ a hoop that needs to be jumped through. This also makes it pretty hard for small fry to add to the project. I understand this fund is not really meant for that, but the zfnd doesn’t account for it either. so it would be nice if some fund somewhere did.

2. How much money should be awarded per project?
3. Should developers be able to submit multiple proposals per day, or should there be a waiting period before resubmission?
4. Should each development proposal each have their own 3-minute voice memo, even if it’s authored by the same developer/team? (I’m leaning towards having only 1 suggested project per proposal so that the community can reject one project and approve another project submitted by the same team).
5. Should teams be allowed to re-submit a rejected proposal for a re-vote? (Yes but…) If so, should there be a stipulation of significant change or time-in-between? (there should definitely be some rule around change, inclusion of community feedback, or time-in-between submission of similar proposals).

the zcfd should do and already does this role, however like you I see that there is much room for improvement. are getting there though. I dont get the need for a 4th party (if you count the community panel) - unless the funds are completely independent of the protocol. I am only mentioning this in case you are assigning future protocol based donations. (which it does look like you are doing later on in the post)

Any vote is subject to nullification if:
1 If there is a statistically insignificant number of voters participating in any vote.

How are you defining a quorum?

Ideally the voting mechanism is simple and easy to use

This is a problem for democracy in general.

Zcash Developer’s Endowment Fund (Seed Funding)

I really like this concept. But you cannot get seed funding for this from the current FR. Please see my footnotes.

@ttmariemia

The Zcash Foundation will have a fund called the Zcash Developers’ Endowment Fund. This fund will be initially financed[2] through a crowd-funding campaign and will then invest a %[2] of capital-raised into traditional market assets which will generate a pre-defined return. This will allow the Fund to exist in perpetuity without necessitating crowdfunding beyond the initial financing campaign.

Just so I am double clear on this (I have read your proposal a number of times so I think I have it down.) - All funding for this Zcash Developers’ Endowment Fund. is purely driven via non protocol based mechanisms.

@ttmariemia

In addition, where a developer earns a % of the original Dev Fund/Strategic Reserve, a set % of the developer’s reward is returned back to the Zcash Foundation. These funds are to be used by the Zcash Foundation to “top up” the Developers’ Endowment Fund, thus allowing the Zcash Foundation to continue to award Zertilizer and seed grants to external developers.

I dont understand, so say I get a proposition through this new entity and get awarded x amount and that money comes from the FR (which it cant, but for arguments sake lets say it can)
Do I have to give y% back to the foundation? or does the foundation get a % of the FR proportional to the amount of the FR I got?

Through this top-up mechanism, the % of Miners Rewards afforded to the Electric Coin Company and its employees will transfer over to independent developers over-time[3] as projects and the capacity of developers become of enough quality to meet the metrics and milestones required to apply for equity funding, thus achieving a step towards financial decentralization.

Are these rewards the initial FR rewards and not the new “dev fund rewards” (I am just double checking. heh)

The Zcash , Zcash Foundation, and ECC must work together to develop and achieve consensus on auditable metrics that:

agreed. Like I said I really like the concept and idea behind the proposal. I just want to get some technical bits out of the way first. I have probably misunderstood a few things.

I believe a requirements based development model suits your outlined goals in the proposal. this is just post is just about funding it.

If we want to make sure that 4-years from now there is no Dev-fund, we need to build that into governance, technology, and metrics. In other words:

So you are envisaging 4 more years of funding? Where is this funding coming from? I am a bit confused now.

Please see footnote [3] - people tried to do this 3 years ago. (although the context is slightly different)

Cheers,

Steve.

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footnotes

[1]

One of my proposals had this, which is think is similar to what you are saying.

@mistfpga

6 - Requirements

• The ECC SHOULD use its portion of the FR for zcash development.
• The ECC SHOULD NOT use it portion of the FR funding for pivoting.
• This zip SHOULD NOT preclude the ECC from sourcing funding elsewhere, or from donations.

However the top two had to be taken out for the final github submission. (if you look at the edit history for the that orginal post in that thread and compare it to the github.

[2]

@daira

[In this comment, I am not speaking officially as ZIP Editor, or for ECC, but am speaking as an FR recipient.]

The FR funding up to the first halving belongs to the FR recipients . Specifying what they (including me) can do with it is not within the scope of the ZIP process. The ZIP process can set goals that should be met with respect to the Zcash protocol and governance, and it can set constraints on what is done with new money associated with any dev fund if there is one, but it can’t purport to specify what ECC does with its existing money (including its share of the FR).

Compare the first post in that thread with the actual github pull request that went through. (this is why people were confused by my proposals in the call, the github versions and my local ones are very different from the forums ones [due to a quirk of the forum]

Nicely formatted github version.

• zips/Keep the block distribution as initially defined.rst at master · mistfpga/zips · GitHub

The forum version

• [ZIP 1001] Final: ZIP proposal Keep the block distribution as initally defined. 90% to miners

[3]

@zooko

You asked for an example of something that would benefit the Company but not be in the interests of all users. The first example that comes to mind is that the Zcash Company could get into the business of selling enterprise software to banks. They certainly are extremely interested in the technology, so we’re in a good position if we want to start selling a product based on that technology to them. This could be really valuable to the shareholders in the company.

It wouldn’t necessarily bring a lot of benefit to the users of the open blockchain. Although it might , if we could use the revenue from the enterprise side to build better and better technology that we also open source and everyone can benefit from using it.

But, whether or not that strategy would result in better or worse results for the open community in the long run, it is a valid strategy that the Company could consider taking if it needs the money.

Whilst that is from a 3 year old thread, it seems very prescient.

• Founders should only receive 10% of the first halving and beyond - #65 by zooko