Zcash Foundation - Questions & Concerns

My name is Jason McGee, and I am a long time Zcash holder and an active member of the Zcash Community on Telegram. Over the past two days, members in our community have brought up questions and concerns related to the Zcash Foundation, which I have summarized below. It would be much appreciated if Jack Gavigan (@Dodger) or another member of the Foundation (@amiller / @secparam / Alex Bornstein) could address these questions/concerns at your earliest convenience. These are community concerns, and do not necessarily reflect my personal opinion, so please don’t shoot the messenger. :slight_smile:

  1. In 2019, Bolt Labs received a grant from the Zcash Foundation to build out a Layer 2 solution for Zcash (similar to the Lightning Network for Bitcoin). What is the status of this project? Is it still active? If not, why has this not been communicated to the community? What has happened to the funding Bolt Labs received?

  2. The Zcash Foundation received 3% of the mining reward from 2016-2020 and now receives 5% as its allocation of the dev fee for 2021-2025. It has adequate funding and appears to have adequate development resources; nevertheless, the zebra client is still in alpha since 2019. What is the status of this project? Why hasn’t it been productionalized?

  3. In 2019, the Zcash Foundation made a donation of approximately 1,044 ZEC to the Canadian non-profit Open Privacy Research Society. While this donation supports the advocacy of privacy, it arguably does little to benefit Zcash holders or the Zcash ecosystem. Perhaps this sort of charitable donation would be better made privately by an individual and by not the Foundation. In the future, should the Foundation make donations that do not directly benefit Zcash holders or the Zcash ecosystem?

Thank you.

Jason

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Hey Jason, I can’t answer all your questions (I don’t speak directly for the Foundation) but I have some info

BOLT was pretty much shelved in favor of having Zcash scale on layer 1 instead of layer 2 with fast/cheap payments, see HALO tech instead. Bolt labs was later spun off into it’s own entity to build zk-payment solutions. https://boltlabs.tech/

Zebra is still under active development, including hiring and building out a consensus compatible node in pure Rust. The primary Repo is here GitHub - ZcashFoundation/zebra: An ongoing Rust implementation of a Zcash node. 🦓

Last I heard it’s slated to be released before the end of the year, but @dconnolly would know more about that than me.

True, however Zcash Foundations mission isn’t limited to projects directly benefiting Zcash.

The Zcash Foundation is a public charity that builds and supports privacy infrastructure for the public good.

This is in contrast to ZOMGs mission for example, who’s funding decisions have to have a relationship to Zcash or it’s ecosystem directly.

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I can add some context here. I’m not aware of Bolt receiving any funding but maybe that was before my time.

The Bolt product is now called zkChannels. Before zkChannels could be deployed on Zcash we needed to deploy the transaction malleability fixes which are included in NU5 and also Transparent Zcash Extensions (TZEs), which are code complete and feature flagged off. Bolt’s intent is to deploy in the NU6 timeframe.

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This is news to me, so Zcash will have a private lightning network?

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That’s correct. Once NU5 deploys on Testnet their intent is to get a prototype up and running there.

For clarity, they need the transaction malleability fixes which are included in NU5 (ZIP 244) and TZEs. TZEs are feature flagged off but Bolt can turn them on for testing on Testnet.

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This thread in itself shows off one of the most glaring flaws of Zcash as a whole which is the suspicious obfuscation of information.

I would think a forum moderator + zomg member shouldn’t be in the dark about Bolt’s NU6 deployment timeline.

If this tech is to ever get adopted more broadly, there needs to be more transparency. Also why does https://z.cash.foundation/blog/ have an invalid SSL certificate?

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I wouldn’t assume bad faith here. There may not have been any intentional “suspicious obfuscation of information.” It’s likely a communication issue where either (1) the status of Bolt Labs was communicated to the community and the community didn’t get update or didn’t bother looking for it (meaning perhaps it was included in something like the weekly forum update that goes out) or (2) the status of Bolt Labs was not communicated and going forward there needs to be better communication.

I don’t know the answer. I’ll dig into it a little more and come back.

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Absolutely not implying you are – this is just something that’s been on my mind in fact I think I’ve mentioned this in one of my previous posts on all the various organizations that Zcash is built upon. It’s hard to find a pulse sometimes on Zcash happenings.

Maybe there could be a website that ingests all Zcash related news from the Zcash forundation blog, Eletric Coin Company blog, forum updates, etc. Some kind of roundup be it weekly or monthly.

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We were informed about ZKchannels being deployed in Bolt back in the Sept ZDA update. I think that this website does a pretty ok job of staying up.

I don’t think it’s intentionally being hidden if that’s what you are getting at.

The original Zcash Foundation grant for BOLT was back in 2018, later was said to be considered for NU5 (this year) but was removed from NU5 without much comment.

So it was news to me that it is scheduled for NU6 ( if only on testnet?) , this may have been communicated via an arborist call or NU pipeline chart somewhere but I missed it. Which means, correct me if I’m wrong @steven-ecc , it would have to go through testing during the end of this year/early next, which would probably push it to NU7 for mainnet deployment at the earliest?

But to your other point, there are so many channels to monitor it’s really hard to keep up. It would be a full time job for someone who is well versed in the field just to collate all the info and translate it into a easy-for-the-average-person to understand format.

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I don’t speak directly for Bolt but their preference was not to deploy in NU5 due to overall timeline of the NUP regarding the feature selection coordination point. They didn’t feel they would be ready to submit a draft ZIP in time. ECC completed the work for Transaction Malleability fixes and that will be included in NU5. We also completed the bulk of the work for TZEs but that will be feature flagged off in NU5 but still able to be used in testing with an NU5-compatible code base. This allows Bolt to test on an NU5 testnet and be ready in time for NU6 feature selection.

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I would LOVE such a news source. As @MineZ.cash said it would be a full time job. I don’t think it’s a bad idea - the benefits for community coordination would be huge. The ZOMG tried to facilitate a ZF-ECC-ZOMG bridge but that hasn’t really taken off.

You raise a great point. That being said, I would like to request that you consider not using provocative phrases like “intentional obfuscation of information.” The ZF and ECC teams are hard at work and made up of decent people. Most of them could work elsewhere for a lot more compensation. Many of them are in this for the mission. What people say on the forums do affect some of them at least… so please be kind where you can. But continue to ask the hard questions - politely :slight_smile:

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Thanks for the insight. Probably a poor choice of wording which I attribute to frustration on lack of discoverability. Could be a good grant idea. :thinking:

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Hey Jason, thanks for posing these questions! FYI, I regard them as perfectly valid, reasonable questions.

A couple of them relate to grants made before I joined the Foundation, so I wanted to avail myself of the facts before I responded, which is why it’s taken a few days.

The grant was to fund the development of a proof of concept (PoC) of Bolt on Zcash. The PoC was duly completed, and the code can be found here: GitHub - ZcashFoundation/libbolt: Rust implementation of libbolt

Note that, as I understand it, turning this PoC into a mainnet-deployed solution would have required fixing transaction malleability (scheduled to happen in NU5), and the addition of Bitcoin-style opcodes to the Zcash scripting language. The opcodes approach has since been dropped in favour of using TZEs, and we don’t yet have any firm timelines for TZEs.

As has been mentioned, the Bolt team went on to raise funding, and have recently been working on adding zkchannels to Tezos (which implemented a version of Sapling).

I know that Ayo is still very much interested in seeing Bolt implemented on Zcash but no progress can be made until we have a firmer timeline for the implementation of TZEs (or a similar mechanism).

Development is ongoing on the Zebra node implementation. The code can be found here GitHub - ZcashFoundation/zebra: An ongoing Rust implementation of a Zcash node. 🦓

While zcashd was built using a fork of Bitcoin, Zebra is a “from scratch” implementation in Rust. This necessitates re-implementing all of the Bitcoin functionality that the ECC team got for free (or, at least, relatively cheaply). Building a new Bitcoin node is not a trivial task, and it’s further complicated by the fact that there’s no formal Bitcoin spec that we can refer to (the Zcash spec only details the Zcash-specific changes that were made). We’re also working towards a moving target - the NU5 timeline is extremely aggressive, and wasn’t designed with a second node implementation in mind, so it’s been a challenge to incorporate that work into our roadmap.

It’s also worth nothing that, for a long time, the team working on Zebra was relatively small. We’ve recently hired more engineers, bringing the team up to a total of six engineers, and we’re also going to be opening up a DevOps engineer position in the near future.

In terms of demonstrable progress, we are working towards a late October timeframe for having a (beta-quality) version of Zebra that can passively participate on the Zcash network (i.e. verify the blockchain, relay blocks and transactions, and maintain a mempool but no mining or wallet functionality). After that, we plan to start work on making it possible for people to use Zebra to manage their ZEC.

To answer the question posed in the final sentence: Yes.

The Zcash Foundation’s mission is “to be a public charity dedicated to building Internet payment and privacy infrastructure for the public good, primarily serving the users of the Zcash protocol and blockchain.”

Zcash is part of a broader ecosystem of organisations and projects that research and develop privacy-preserving technologies, and indirect benefits often accrue to Zcash and its users from those organisations’ and projects’ research. So, while the Foundation’s primary focus is serving Zcash users, it’s full scope is far broader, and the grant to the Open Privacy Research Society falls under that broader remit.

I strongly believe that the Zcash Foundation can be more effective - and, specifically, serve Zcash users better - if it collaborates with that broader ecosystem. Many of the skillsets and expertise in this space are highly specialised, and we can’t hope to possess them all within the Foundation. Working with and supporting other teams is a great way of furthering the Foundation’s goals while keeping the organisation’s administrative overheads low. I wish I had more time to devote to building and strengthening relationships and alliances with other organisations and projects that share our goals and align with our mission. We’re hiring a Communications & Ecosystem Relations Manager, and part of their role will be to help with that.

Once again, thanks for the questions!

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2 posts were merged into an existing topic: The Zcash Foundation is hiring a Communications & Ecosystem Relations Manager

Jack – Thank you for your response, I appreciate the detail. I want to use this opportunity to learn more about the Foundation. I had a nice conversation with Andrew Miller yesterday who told me about the origins of the Foundation and its role as part of the Zcash ecosystem.

Can you point me to the annual roadmaps (or similar documentation that lays out the Foundation’s goals and objectives for each year) and annual reports (which detail what the Foundation accomplished)? I was only able to find the roadmap for 2020 and annual reports (“State of the ZF”) for 2018 and 2019.

Thanks!

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@Dodger - Following up. Can you or someone else from the Foundation please assist with this request?

Thanks!

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I think that most of what you’re looking for can be found on our blog - e.g. The Zcash Foundation’s 2020 State of the Foundation.

Right now, our primary focus for 2021 is making progress on Zebra. The best way of tracking that progress is via the Github repo or by joining the fortnightly Arborist calls.

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@Dodger Thank you for your response. I have reviewed the documentation available on the Zcash Foundation’s website, including all blog posts, quarterly reports, and board minutes.

I wanted to do something relatively modest: independently assess on an annual basis (1) what the foundation set out to do and (2) what it accomplished. However, I am unable to make that assessment using the documentation you referenced on the Foundation’s website.

I could only find the roadmap for 2020 and the retrospectives for 2018 and 2019. There are “Quarterly Reports” for Q1 and Q2 2020, but they didn’t exist before 2020 and they are no longer being produced. The board minutes started out with a decent amount of detail in 2017, but became much less detailed as time progressed. The most recent minutes lack any substance whatsoever (see Jul & Oct 2020), and it appears the minutes for the meeting in June 2021 have not been posted.

The Foundation lists “Transparency” as its #1 value under “Values and Goals.” It states:

Transparency. We are committed to accountability. Our policies, significant decisions and their rationale, and software shall all be publicly visible. We will strive to accurately and accessibly communicate the security properties of Zcash and of proposed changes.

But compare what exists for the Foundation to the roadmaps the Electric Coin Company produces or the meeting minutes produced by ZOMG. The difference is as clear as night and day.

It appears the Foundation is merely paying lip service to transparency and accountability; it is certainly not delivering it. I think the Foundation can do a much better job and it should make it a priority to “walk the talk.”

There is a growing consensus within the community that the Zcash Foundation is not sufficiently transparent and does not adequately serve Zcash holders or the Zcash ecosystem. Its mission is to “build financial privacy infrastructure for the public good, primarily serving the users of the Zcash protocol and blockchain.” Is the Foundation succeeding in that endeavor? How would you rate its track record of building financial privacy infrastructure? Zebra has been a major priority for the past few years, and when it’ll be completed and released to production is still unknown. What happened to projects like the Zepio Wallet, which were publicly announced and commissioned, then quietly abandoned for unclear reasons?

What’s the Foundation doing to bring new users to Zcash? Or to educate the public on the benefits of Zcash’s privacy-preserving technology? Why are there no education materials, position papers, or regulatory-friendly marketing campaigns?

Where’s the community engagement? Compare your Twitter account and the account of the Foundation to those of the Electric Coin Company, Zooko Wilcox, and Josh Swihart. The latter actively engage with the community, the former do not.

To be clear, my opinion of the Foundation is not completely negative. It does an excellent job organizing and producing the Zcon events. The biweekly Zcash Arborist calls are also a great resource for those who want to keep up to date on what developers are currently working on. But there needs to be better “high level” communication from the Foundation. Hiring a Communications & Ecosystem Relations Manager might help, but it’s not going to solve the problem.

I understand you just started at the Foundation in February 2021. You’ve recently hired a new management team, including a Chief Operating Officer and Operations Director. But looking at the announcements for these new hires, it’s not clear what their positions within the Foundation entail. For example, the COO announcement generically states that Alex Bornstein will “support the Foundation’s mission of building and supporting privacy infrastructure for the public good while upholding and advancing the Foundation’s three values: transparency, inclusivity, and humility.” Those are important focus points and issues that need to be addressed, but what are his specific objectives and how does he plan on accomplishing those goals?

ZEC holders pay for the Foundation through inflation. The Foundation receives 5% of the block reward and should have sufficient financial resources and staffing to do more. Most of the issues I’ve brought up are due to poor communication and poor management, which can be improved by implementing proper controls and procedures. You are ultimately accountable as Executive Director.

I am voicing the community’s concerns here because I care about Zcash and I want to see it succeed. I am financially invested as a long-term holder and personally invested in its mission to empower people with economic freedom. I want to ensure these issues are addressed. Going forward:

  1. What will the Foundation do to aggressively increase transparency and accountability?
  2. How will the Foundation better serve Zcash users and the Zcash ecosystem?

cc: @amiller @secparam @amber @Matthewdgreen @valkenburgh

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This is the first time I have seen such a high-quality request for transparency from one of the community members. I give You a standing ovation. Transparency is a key aspect of community trust for any issuance-funded fund.

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