Zcash governance: bicameral model

Governance
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I previously proposed the zBloc as a potential new governance structure and non-direct funding model for Zcash and there appears to be good support. However some have expressed a desire for greater or even pure coin-holder governance.

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.

I have been looking at other models and am especially intrigued by Optimism’s current governance and funding experiment using a bicameral governance system consisting of the Token House and the Citizen’s House. I have included a few links at the bottom of the post if you would like to dig in further. I think we ought to consider something like that as well as we discuss options.

A bicameral system in Zcash might be very similar to Optimism’s with a few adjustments. Let’s call the two houses the Zodler Assembly and the Community Zenate for now.

The Assembly would allow Zodlers to vote or delegate their vote to another zodler, group or organization. You might want to delegate your vote to an individual you trust, a group of core engineers, or even an org like ECC or ZF.

The Zenate would be a self-managed group of community members, perhaps starting with current members of the groups polled in the dev fund discussions (zcap, zac, zure, zechub, etc).

The breakdown of authority might look something like this:

Zodler Assembly Community Zenate
Protocol Upgrades Must pass Can veto
Governance Changes Must pass Must pass
Grant Requests Must pass No vote
Retroactive Grants No vote Must pass
Hire/Fire Grants Administrator Must pass Can veto

The community would need to hire someone to administer grants and the governance process at the outset. It might be something that a group outside the US, such as FPF, might take on.

In this model, grants are split into two pools. Grants would be voted on by coin holders or their delegates. A retroactive grant pool would be created that would allow potential recipients to apply for funding after their work has been delivered and has demonstrated value. Those grants are approved by the Zenate.

There would be a lot to figure out such as voting rules (quorum, transparency, lockup periods, voting periods), and someone to build sites and tools for voting and reporting, etc., but its all doable.

I’m happy to answer questions on the details of how this might work. I look forward to your thoughts.

Optimism Links and Details

Funding available is 5.4% of the initial supply (232M OP). Categories of funding include: developer ecosystem, end-user experience and adoption, and collective governance.

Bicameral governance system: Token House and Citizen’s House

Governance Dashboard

Operating Manual

Agora for Proposal Submissions and Voting

Working Constitution (expires in 2026)

Governance Overview and Summary blog

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One thing to note however, the initial OP token launch was air dropped to early users of the protocol which probably led to a “fairer” distribution.

I’m not sure the same can be applied retrospectively to zcash which has had 8 years out in the wild.

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No way OP has a more fair token distribution than ZEC

ZEC is likely one of the most well distributed assets in crypto. You can’t replicate 8 years of market distribution over night …and most “early users” on these L2s are airdrop farmers.

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This mechanism is interesting!

Let’s see what the community has to say…

I like more the zBlock option, but I want to see other opinions and arguments… and proposals!

I guess once the different governance proposals are discussed, we would take a vote to choose a model? Or would we create our own hybrid/frankestein model?

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Thank you for taking the time to come up with this @joshs, greatly appreciated on my side.

I hope that those who have expressed a wish for a governance change will express themselves here. But many are no longer (if they ever did) paying attention to this forum, so should a more formal announcement be made so ZEC holders at large receive the call to action? It’s important they can give their opinion at this stage, rather than when things are getting formalized.

Do you know how Optimism got to where they are now, historically? Was it envisioned that way from the start? I am asking because:

Initially the circular logic made me laugh, but we will have to define how to transition indeed, and that’s not an easy part of the puzzle. Answering this question would probably also answer how do we define more precisely the “breakdown of authority” table you have made.

Today is a good day! Thanks again @joshs !

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What is the rationale for giving the zodler assembly the power to approve normal grants while giving the Zenate the power to approve retroactive grants?

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I actually think zec being 8 year old is an advantage. As only people who actually care about the project have amassed a great amount of zec even with the abysmal price action compared to the rest of crypto.

They should be awarded.

OP air drop which btw i was a part of was just a cash grab. Most people including me were in it for the airdrop to sell and get money.

I like this proposal.

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The circular logic thing I guess you mean because of my question about “vote or choose”.

And it is paradoxical. As there is a transition to a new model we will most likely adopt things from the old models and from the new ones to be implemented. That’s what I meant by a “frankestein”.

Transitions are not usually easy, and not as fast as many of us might expect.

I agree with you that this is a very interesting topic, and one in which there should be more interest and participation from the community.

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Sorry, I have not made that point clear. I meant to ask how do we vote on a voting system? If you ask the community only, the outcome will be biased towards more power to the community.
Same logic if you ask token holders. A simple approach may be to give 50% voice to the community and 50% voice to token holders, but is that the right, best approach?

I don’t know the answer to this question, but I do like simplicity and 50/50 makes sense to me at least. Hopefully we can all agree on that. Then hopefully we can also all agree that for this to pass in a way that doesn’t create more problems than it is attempting to solve, we will need a super-majority (two-thirds?).

Yeah, there’s a ton to unpack. @joshs wanted some fun, he’s about to get a whole lot of it! We need to move fast and don’t break anything.

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These are my same concerns.

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It’s somewhat arbitrary and based on the Op implementation. It allows for some separation of authority and experimentation with what is likely a smaller batch of grants and, perhaps, the Zenate may also better position to assess the impact of initiatives.

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I would argue against such quick, unilateral & arbitrary changes. It will already set a bad precedent on this road to improve our governance.

Instead, I would suggest we take their researched and tested governance model and we make changes after:

  1. Diligently researching them
  2. Expressing in clear terms why this change is suggested
  3. Having a passing vote from the token holders and community.

btw, I find the naming of Zodler Assembly & Community Zenate" is adding unnecessary confusion; for this reason I keep it simple on my side.

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This is just an idea to explore, not a formal proposal. My intent here is to spend time discussing the merits of the idea before getting into all of the specifics. Research is ongoing.

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Yep, all good, there was no expectation of your initial post being a final proposal. And my comment was indeed, participating into the discussion you have initiated.

The good news is that as far as Zcash itself is concerned, I don’t think anyone wants any on-chain governance. That has the serious implication that none of the votes we organize is technically binding. That is miners / validators are under no obligation to run a specific code, likewise for what ECC/ZF & others decide to work on and how. In other words, on a technical / game theoretical level, we currently share and have no plans to deviate from, using the Bitcoin Governance as far as the protocol is concerned. We are actually immune from large token holders takeovers!

So why are we doing it? To get a pulse on the ecosystem we wouldn’t otherwise have. That is quite important to optimize the allocation of resources; both those of the dev funds, but also those of stakeholders deciding to allocate from their own stash directly.

If you look at it from this perspective, there is no longer any “Must pass” or “Can veto”. Every ecosystem participant is free to interpret the results as they see fit. But now we know what each side wants, and that is quite precious.

Now where I would argue we could and should have on-chain governance is for the very special dev fund. That is because you want to make sure the power of ZEC holders to spend their tokens is not stolen from them, as it is now. Someone else is doing it before us btw. It’s a different subject and outside of the scope of this thread so I’ll stop there on this, but still a reminder that I would appreciate an answer from you @joshs.

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Binji from Optimism was kind enough to meet with me today to open up dialogue between the teams so that we can learn from their governance model. At this point, its simply a conversation to learn more about their governance model, what is working, how it is evolving, and what they have learned in the process.

Next step is to meet with Justine, who is the head of governance at the Optimism Foundation in September to dig in deeper. If you are interested in being a part of that conversation, please dm me.

These are a few rough notes from today that I’m just dropping here for consideration and conversation.

On governance

  • Their governance work has focused on reducing the threat of capture. That lead to the bicameral model.
  • Believes that it is working well for them.
  • The foundation is stewarding the effort today with the goal of exiting in the future.
  • His initial thought was that a strictly parallel model for Zcash might be too much to swallow out of the gate, but that a hybrid with the zBloc might be a good next step, where the members of the zBloc serve as the initial “Citizen’s House”
  • An additional resource from Justine that he pointed me to: The Collective DAO Archives - Metagovernance - PoolTogether

On grant funding

I may have some of this wrong or it might be slightly off but tried to capture this as best I could.

  • Various orgs may be given funds to allocate grants
  • There is a grants council made up of 12 members that are elected by token holders and/or delegates
  • Open calls are made to allow different orgs, groups or people to request “missions” for a given “season.”
  • Missions are sponsored by on of the 12 members and are then voted on by token holders
  • Seasons run for 4 months, with a one month reflection period after each season. They are currently in their 6th season.
  • A new council is voted in for each season.
  • Grants can be milestone based, or retroactively funded in an upfront smaller grant to get them started.
  • Granting authority may be delegated (there are other details related to lockups, etc.).
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What are you working on exactly @joshs? Zcash governance or Zcash dev fund governance?

The title would imply you are working on changing the governance of the entire project?