It’s been a while since we discussed governance and the future of the development fund. With NU6 just over a week away, we’re entering a one-year funding cycle that allocates 8% to ZCG, while 12% is set aside in a lockbox for future distribution.
All potential NU7 ZIPs have been submitted, and so any new ZIPs specifying how funds are disbursed from the lockbox could only potentially be part of NU8 — even if we reach consensus on distribution before NU7 activation. We typically need at least three months between network upgrades. Since there is a long lead time between specifying the changes that go into an upgrade, and when it activates, work on consecutive upgrades needs to be “pipelined”. Based on the current timeline, if NU7 activates in August 2025 the distribution mechanism could be in place as part of NU8 by November — but only if concrete proposals are available within the next three months.
Zcash governance has evolved from ECC-driven with community input, to a combination of ECC and ZF ZCAP, and more recently, to a broader, informal social consensus among diverse stakeholders. Here are the two proposals I’m aware of for our next steps:
The Zbloc – Governance decisions, including funding, would be made by votes among various stakeholders and coin holders.
Bicameral System – A dual-chamber system inspired by Optimism governance, with decision-making split between stakeholders and coin holders.
I hope we can discuss preferences in this thread as we work toward social consensus on the next steps. I also welcome AMAs, X spaces, and other ways to engage in dialogue about the pros and cons of each option. If you have a position on these or other ideas and are interested in live discussions, please let me know.
I plan to start surveying the ECC Caucus as early as January. If you’re not a member but wish to join, please reach out to @peacemonger.
Thank you for all your support, Zeeps. It’s been an incredible year, and I look forward to working together as we chart a course toward more decentralized governance and a vibrant ecosystem.
“Some of the challenges with pure coin-holder voting include significant risks of plutocracy and capture. A shift to a pure coin-weighted decision making introduces a great deal of risk to the project.”
But, where are the profitable Zcash businesses? A huge problem here is that it is too hard to name even three Zcash success stories.
Today there is little incentive for Zcash contributors to build profitable businesses. We need to rally around starting businesses that accept Zcash, and being their loyal customers.
Guaranteed funding from block rewards breaks the typical fundraising incentives, especially for a nonprofit. Entities need to be “hungry” to be productive, innovating to survive. They need to show their progress or potentially fail to fundraise further.
There’s not yet a sense of hunger around here.
The Linux Foundation, Bitcoin Foundation, and Monero’s CCS are great examples of voluntary fundraising that we should experiment with. No profitable businesses using your technology? No funding.
Requiring that all grants include a public donation Zcash address (with view key) would allow us to collect metrics on the community’s ability to self-fund, and to plot a path towards consensual funding: phasing out the developer block reward.
Let’s build profitable businesses and become known for our consensual generosity.
The objective of seeding the ecosystem with development resources has been captured by a small selected group. The inability to idenifity even a enterprise leader or small group of enterprise ready entities who have received funding directly or from the dev fund is a guide to a structural design flaw.
Design limitations:
The limited expectations for quantifiable metrics to measure success for grantees or direct recipients.
The limited number of individuals in guiding the distribution of resources has narrowed the scope for diversifying ideas an enterprising entities.
The caption of resources by a select group of entities who have believed the zcash development resources are a continuous budget and which have produced below market metrics on any measurement.
Limited feed back loop for some form of participation, in receiving development resources and content or user generation has been low.
Suggested Solutions:
All entities receiving funds directly must submit to financial transparency reporting.
All entities receiving funds directly must have term limits for board & executive positions.
Limit all future grants to 100 000 usd. Renewable to a maximum of four times.
All Zcash Community Grant members have term limits.
All Zcash Community Grant members conduct all future grant communications in a full transparent forum, (no backdoor deals).
All grantees provide more refined quantifiable metrics for development funds.
All grantees provide a minimal level of quantifiable community development work.
Shift the zcash community ecosystem funds and culture towards:
Directing development resources focused on small and medium size for profit enterprises using the Zcash Protocol an its attributes to solve real world challenges and creating jobs.
Let’s build profitable zec business with small grants to many small and medium businesses.