TLDR: Zcash Foundation is currently in breach of its reporting obligations under ZIP 1014. According to ZIP 1014, failure to remedy may result in the Foundation losing its allocation of the development fee, which will be redirected to ZOMG.
Zcash Community Members,
This weekend, I re-read ZIP 1014 for the first time since 2019 and came across the following excerpts from the “Transparency and Accountability” section:
BP, ECC, ZF, and Major Grant recipients (during and leading to their award period) SHALL all accept the obligations in this section.
Ongoing public reporting requirements:
- Quarterly reports, detailing future plans, execution on previous plans, and finances (balances, and spending broken down by major categories).
- Monthly developer calls, or a brief report, on recent and forthcoming tasks. (Developer calls may be shared.)
- Annual detailed review of the organization performance and future plans.
- Annual financial report (IRS Form 990, or substantially similar information)
BP, ECC, and ZF MUST contractually commit to each other to fulfill these conditions, and the prescribed use of funds, such that substantial violation, not promptly remedied, will permit the other party to issue a modified version of Zcash node software that removes the violating party’s Dev Fund slice, and use the Zcash trademark for this modified version. The slice’s funds will be reassigned to MG (whose integrity is legally protected by the Restricted Fund treatment).
Over the past two months, I have become an outspoken critic of the Foundation. If you’ve read my previous posts, you’re aware that I consider the Foundation a poorly run organization that does not live up to its core values and mission and does not adequately serve Zcash users or the Zcash ecosystem. This egregious violation of the ZIP 1014 reporting requirements further illustrates my point.
On multiple occasions, I have requested the Foundation reinstate regular and timely transparency reporting to community members. Quarterly Reports currently exist for Q1 and Q2 2020, but are no longer being produced. Additionally, the annual report was published, but not in a timely manner, more than four months after 2020 year end. Compare that to the Electric Coin Company’s annual report, which was published thirteen days after year end.
The current Executive Director acknowledges that reporting should be more robust and that the Quarterly Reports should be reinstated, but says right now he doesn’t have the bandwidth. I think that is a very poor excuse, and it seems that the architects of ZIP 1014 would agree with me. These reports are required, not optional.
If not corrected, this oversight could result in the Foundation losing its only source of income: its allocation of the development fee. I don’t want to see that happen. Rather, I’d like to see the Foundation get its act together and operate more efficiently and in line with its values and mission.
I ask the Foundation to acknowledge this breach of its reporting obligations and immediately reinstate providing transparency reports on a regular basis to community members, with the first report for the quarter ending 09/30/21, which should be circulated in a timely manner, on or before 10/31/21.