Zcash Governance Model Design & Selection Process

Hello, Zcash community!

We recently submitted our ZCG grant proposal, which we had previously outlined in our introduction post, and we’re excited to share it with you for feedback. We’ve had an issue sharing a public GitHub link to our application, so in the meantime, please find our full ZCG application below. Once that link is live, we’ll attach it at the top of this thread.

Grant Application - Zcash Governance Model Design & Selection Process

Application Owners (@GitHub Username)
@areta-team

Organization Name
Areta Governance

How did you learn about Zcash Community Grants?
Areta was introduced to the ecosystem via Jason/Robert from Shielded Labs and learned of ZCG for funding governance initiatives from there.

Requested Grant Amount (USD)
Total Funding: $190,000 USD split into three tranches (more info below)

Category
Research and Development

Team Information

  1. Project Lead

    Provide details about the primary person responsible for the project.

    • Name: Bernard Schmid
    • Role: Governance Lead at Areta
    • Background: Bernard heads Areta’s Strategic Governance unit working with some of the leading DAOs and foundations in the space working on large-scale governance and growth initiatives from governance inception to optimization and ecosystem growth.
      Prior to Areta, Bernard spent his time in Management Consulting at McKinsey & Company across London and Berlin, where he led business building projects and growth initiatives for tech scale-ups and S&P 500 companies.
    • Responsibilities: For this grant, Bernard’s responsibilities will include:
      • Managing key stakeholder relationships and driving alignment
      • Spearheading governance model selection process
  2. Additional Team Members

    • Name: Siddharth Shah

    • Role: Director, Head of Governance Design at Areta

    • Background: Sid co-leads Areta’s Strategic Governance team and has deep experience in both the digital asset and traditional finance spaces, having been involved in the blockchain space since 2017.
      As a Digital Assets Strategy Manager at Motive Partners, Sid focused on innovation strategy and value creation with respect to Motive’s portfolio companies and external clients, while evaluating Web3 start-ups and established companies for early-stage investments or buyout deals.
      Within the Global Blockchain Team at Accenture for 5 years, Sid focused on digital asset strategy projects across financial markets, working with commercial and retail banks, central banks, and financial market infrastructure players.
      Sid has a Master’s in Finance degree from the London Business School, where he was the Co-President of the LBS Blockchain Society for 2023-24 and led the society’s Aave delegation from October 2022 to February 2024.
      His blockchain expertise and depth of relationships across the ecosystem are also demonstrated by his Web3 blog and podcast, Genesis Block.

    • Responsibilities: For this grant, Sid’s responsibilities will include:

      • Leading governance design process & workshops
      • Co-designing transitionary decision-making mechanism
    • Name: Findlay Boothroyd

    • Role: Governance Research Lead at Areta

    • Background: Findlay is the governance research lead at Areta specializing in governance design and strategic projects across leading ecosystems, such as Safe, Uniswap, and Arbitrum.
      Previously, Findlay worked as a ventures analyst for Delphi Digital, where he completed due diligence and deal origination across all facets of the web3 world. Outside of his professional career, Findlay competes on the Canadian national field hockey team where his accomplishments include competing in the Olympics in Tokyo in 2020.

    • Responsibilities: For this grant, Fin’s responsibilities will include:

      • Leading as-is analysis research and community feedback gathering
      • Co-designing transitionary decision-making mechanism

Project Details

  1. Project Summary

    Provide a brief summary/elevator pitch of your project in 1-2 sentences.

    Design and lead a structured public process facilitating the selection of Zcash’s next governance model through governance objective discovery, dedicated community feedback and education workshops, establishing a clear framework for how a final decision will be made, and a comprehensive analysis of all relevant potential governance models.

  2. Project Description

    Provide a comprehensive overview of the project and its goals.

    Areta Introduction Forum Post

    The risks associated with an expiring Dev Fund and the absence of a clear, aligned plan for a future funding model currently hangs over the Zcash ecosystem.

    This proposed grant aims to establish a clear, structured governance model and funding process for Zcash, ensuring broad stakeholder input and effective decision-making. Specifically, the grant is guided by three core objectives:

    1. Define Zcash Governance Objectives – Gather input from all Zcash stakeholders to set clear governance goals (egs. ECC, ZF, Shielded Labs, ZCAP, ZECHub, etc.)
    2. Design & Implement Governance System – Research and collaboratively design a full option space of prospective governance models.
    3. Manage Stakeholders – Facilitate from A to Z the decision-making process and stakeholder coordination.

    In practice, the engagement will follow a phased approach, with the initial 6 month ‘Blueprint Phase’ taking on the following format:

    Part I [Month 1-3]

    • Decision-Making Mechanism: To address the lack of an established process for selecting a future governance model, the first phase will be to design a transitionary decision mechanism to facilitate the ultimate decision on a governance model (i.e., which stakeholders are involved, how are they weighted, etc.).

    Part II [Month 4-6]

    • As-Is Analysis: Map Zcash’s current governance structure and identify the governance objectives of each stakeholder group.
    • Governance Model Options: Lay out the full option space of relevant governance models for Zcash, in alignment with defined governance objectives.
    • Stakeholder Workshops: Conduct governance discussions and workshops to drive toward a decision on a new governance model.

    Additionally, pending the success of the Blueprint Phase, Areta will propose another grant for Phase II, which focuses on the implementation and execution of the new selected governance model.

    Logistically, Areta will oversee the full execution of the process, managing stakeholder interactions and ensuring smooth coordination across all parties, including the broader community. To maintain transparency and engagement, Areta will provide structured updates through monthly reports, community calls, and a dedicated Notion Project Hub, offering stakeholders clear insights into progress. Additionally, live communication channels, such as Telegram (or other preferred platforms based on Zcash’s preferences), will be utilized to facilitate real-time discussions and questions.

  1. Proposed Problem

    Clearly identify the problem or challenge your project aims to address.

    This grant proposal addresses the most pressing challenge facing the Zcash ecosystem presently: the absence of a defined future governance model. Without a clear governance framework, the ecosystem risks stagnation, the demotivation and loss of key community contributors, the potential depletion of funding for core ecosystem stewards and their projects (i.e., ECC, ZF, etc.), which can all reflect poorly on ZEC’s token performance (especially amidst a turbulent macroeconomic market).

    In this context, the key challenges Zcash faces include:

    • A call for change regarding the historical lack of meaningful influence for coinholders and community members in shaping governance decisions.
    • Unaligned vision from key stakeholders on the best path forward for governance (as we inferred from our initial scoping discussions with these parties).
    • Governance fatigue among key stakeholders, preventing real progress.
    • No formal decision-making or dispute resolution mechanism to guide the ecosystem toward a collective path forward. Different groups reach consensus in different ways, but there is no unified structure for resolving key governance questions.

    While initial discussions have taken place in forums, no concrete governance model has been aligned on, and further, there is no coordinated effort among key decision-makers to implement necessary changes within the required timeline (i.e., before the Dev Fund dries up).

  2. Proposed Solution

    Explain how your project will solve the identified problem.

Areta Governance specializes in helping foundations and DAOs establish and grow decentralized governance structures. The proposed project team for Zcash has worked on core governance design, capital allocation and growth, and strategic initiatives for leading ecosystems like Uniswap, Arbitrum, Safe, Aave, and dYdX.

The proposed solution draws on our conversations with different Zcash stakeholders, and was acutely designed to address each of the above outlined challenges Zcash faces in pursuing a new governance model.

First, prior to engaging in a deeper governance objective and model design process, it is imperative to have a mechanism for finding consensus and making an ultimate decision on which model to move forward with. As such, the first phase of our grant (tentatively scheduled for 3 months) proposes the development of a decision-making mechanism, including:

  • Analyzing gaps in the current Zcash decision-making process, including feedback and insight calls with different stakeholders;
  • Designing a temporary decision-making process for selecting the future governance model;
  • Aligning on the process with stakeholders (incl. ZCF, ECC, SL, community proxies).

After a decision-making mechanism is agreed upon, we will kick off a broader process for the discovery of governance objectives and outlining of potential governance models that are tailor-fit for Zcash. Specifically, this phase will have a few key elements:

  1. Determine Zcash’s governance objectives through stakeholder sessions and feedback forms. This will enable community members, builders, coinholders, contributors, and projects to share their views on governance (both publicly or anonymously, as preferred).
  2. Organize and lead public workshops to educate the community, solicit feedback, and iterate to narrow down on potential governance models. This phase will also include feedback gathering through private surveys and direct calls with stakeholders.
  3. Outline the landscape of relevant Zcash governance models, including existing discussed models and Areta’s recommendations, such as:
    1. zBloc Funding Model
    2. Community and Coinholder Funding Model
    3. Bicameral Model
    4. Areta Suggestions (TBD)
    5. Other Community Suggestions
  4. Drive decision-making on and selection of Zcash’s governance model.

This streamlined process is specifically designed to address the existing challenges within the Zcash ecosystem while providing stakeholders with a clear roadmap for understanding, navigating, and meaningfully participating in the selection of a new governance model.

  1. Solution Format

    Describe the format and deliverables of your solution (e.g., software, research paper, event).

    • As-Is Analysis – Comprehensive report outlining the current state of Zcash’s governance + stakeholder objectives.
    • Workshops – Interactive online sessions via Google Meet or a similar platform.
    • Pitch Slide decks - Used for community check-ins
    • Surveys – Feedback and idea surveys (anonymous) distributed through platforms like Google Forms or Fillout.
    • Governance Model Report – Analysis of the full range of governance options.
    • Outcome Report - A final summary of completed work and our recommendation/review.
  2. Dependencies

    List any dependencies required for your project, including technical, resource, and collaborations with other individuals, teams, or organizations.

    The core dependency of this proposal is reaching alignment and buy-in from the key stakeholders of Zcash (i.e., ECC, ZF, Shielded Labs, community proxies) on a decision-making mechanism that will be used to select the governance model.

    Practically speaking, this will require the engagement of these groups:

    • At our public governance workshops
    • Through direct video conferencing meetings
    • Via distributed feedback surveys
    • On the forums

    Outside of stakeholder buy-in, this stage of the process has no technical or resource dependencies.

  3. Technical Approach

    Outline the technical methodology and tools you plan to use.

    As aforementioned, the technical component of this grant proposal is limited to hosting a Notion ‘Hub’ workspace, where all members of Zcash can conveniently find all of the latest information and important resources on the process. We believe this will be a useful tool for both maintaining an open process, but also encouraging participation from stakeholders who are not active or overwhelmed by using the forums. For an example of a Notion Hub from a past project, please see here.

  4. Upstream Merge Opportunities

    If your project involves forking or modifying existing Zcash software, please describe:

    Not Applicable

Budget

  1. Hardware/Software Costs (USD)

    Total cost for all hardware and software needed.

    Not Applicable. See below.

  2. Hardware/Software Justification

    Explain why these hardware/software costs are necessary for the project.

    Not applicable. Areta pays for use of services internally (e.g., Notion, Fillout, Slack).

  3. Service Costs (USD)

    Total cost for any external services required.

    Not Applicable. See below.

  4. Service Costs Justification

    Explain why these service costs are necessary for the project.

    Not Applicable. Any potential legal checks on the governance model, if required, will need to be funded via a separate grant if there is a need for the checks. At this point, our working assumption is that no checks are required.

  5. Compensation Costs (USD)

    Total cost for team member compensation.

    Team member compensation is included in the total project cost. The budget is divided into a commitment fee to cover the base cost for roll-out and subsequent milestone payments upon successful project delivery.

  6. Compensation Costs Justification

    Provide details about team member compensation and rates.

Consisting of two senior resources, incl. co-founder, and one project manager dedicated to the design, analysis, and stakeholder management of the Governance model selection. And an additional junior resource to facilitate community interaction, and supporting governance model research and design.

  1. Total Budget (USD)

    Sum of all costs (should match requested grant amount).

$190,000 USD

  1. Previous Funding

    Indicate if you have received any previous funding from Zcash Community Grants (Yes/No).

    No

  2. Previous Funding Details

    If you received previous funding, provide details about past grants and their outcomes.

    Not Applicable

  3. Other Funding Sources

    Indicate if you have or plan to receive funding from other sources (Yes/No).

    No, we plan to solely run this proposed process with funds received from the ZCG grant.

  4. Other Funding Sources Details

    If you have or plan to receive funding from other sources, provide details.

Risk Assessment

  1. Implementation Risks

    Identify and describe potential challenges or obstacles to successful implementation.

    A potential challenge with implementing this collaborative governance design and selection process is a lack of community buy-in. The community is already experiencing fatigue and with other uncoordinated governance/funding model efforts ongoing at the moment, it may be viewed as just an additional process.

    We plan to mitigate this risk by working directly with the larger Zcash stakeholders to first align their efforts within our proposed process, focusing attention and pushing the community toward a uniform approach.

  2. Potential Side Effects

    Describe any potential unintended consequences or negative impacts.

    During this phase of the grant, the potential unintended consequences are limited as we will focus predominantly on research, feedback gathering, and laying out the option space for potential Zcash governance models.

    A potential unintended consequence may be that the temporary decision-making mechanism employed phase 1 is used to make additional Zcash funding or ecosystem decisions, beyond the purview of this grant application.

Success Metrics & Schedule

  1. Success Metrics

    Define how you will measure and evaluate the success of your project.

    Success metrics for this project can be cleanly measured through both clear outcomes and qualitative engagement metrics. The following key success metrics will be used to evaluate the effectiveness of our approach:

    1. Confirmation of a Temporary Decision-Making Mechanism – A primary measure of success is securing buy-in from key stakeholders and the broader community on a temporary decision-making mechanism, that will be used for the eventual selection of a governance model.

    2. Successful Governance Model Selection Process – Another core success metric is running a structured selection process for a governance model that leads to an outcome. Note: an outcome may not necessarily mean alignment on a future model.

    3. Community Engagement & Participation – The effectiveness of the research and feedback phases will be evaluated through qualitative indicators, such as community attendance at discussions, engagement levels in forum conversations, and the number of survey respondents. Additionally, we will circulate a process feedback survey, asking community members to assess the quality of our full Phase I governance model process.

  2. Startup Funding (USD)

    Amount needed to begin the project.

    $25,000 USD

  3. Startup Funding Justification

    Explain why startup funding is needed and how it will be used.

    Startup funding is required to cover costs necessary with the kick off of the transitionary decision-making mechanism design process.

  4. Milestone Details

    Break down the project into specific milestones with associated deliverables and timelines.

    • Milestone 1: Decision-making Mechanism

      • Amount (USD): $40,000 USD
      • Expected Completion Date: 2025-05-30
      • Deliverables: Recommendation on Decision-making Mechanism. We will analyze gaps in the current decision-making process through stakeholder consultations, design a structured decision-making framework for the future governance model, and align this process with key stakeholders, including ZCF, ECC, SL, and community proxies.
    • Milestone 2: Governance Model Design

      • Amount (USD): $75,000 USD
      • Expected Completion Date: 2025-08-30
      • Deliverables: Design of Governance Model. We will define Zcash’s governance objectives, map out the landscape of relevant governance models, lead workshops to refine options, facilitate various feedback channels, and drive a decision-making process for the community to select a governance model.
    • Milestone 3: Successful Model Selection

      • Amount (USD): $50,000 USD
      • Expected Completion Date: 2025-09-15
      • Deliverables: A decision-making success bonus will be awarded upon the community’s successful selection of a governance model. This means, the community has reached consensus on a new governance model.
  5. Supporting Documents

    Attach or link any relevant supporting documents.

    Grant Proposal Slides https://pitch.com/v/zcash-governance-proposal-february25-jrvegd

    Areta Forum Introduction https://forum.zcashcommunity.com/t/areta-governance-introduction/50442

The community will play a key role in this process, so we’re eager to have you involved and share your feedback at this early stage. Looking forward to the discussion!

1 Like

Hi @areta - Thank you for submitting your grant proposal! We will review it in the upcoming weeks and reach out if we have any questions.

In the meantime, if you have any questions for us, you can post them to this thread or DM us at @ZcashGrants.

Zcash Community - We want to hear your feedback on this grant! You can post your comments to this thread or DM us at @ZcashGrants if you’d like to provide feedback in private.

Thanks!

2 Likes

How do you intend to get stakeholders at large on the table?

As a first step, I suggest that stakeholders are placed in control of the dev fund where they would only have a veto power on carefully crafted proposals (max once a month) stemming from the current governance structure. I am talking about on-chain governance here if that was not clear; funds cannot leave the dev fund unless approved by stakeholders.

I don’t see that method in your landscape of relevant Zcash governance models, and I would appreciate to understand why.

This grant proposal seems like a well organized decision-making process.

Hi outgoing.doze,

Thanks for the great question. During our preliminary discussions, each stakeholder committed to participating in the broader public process. Accordingly, it will be important for us to maintain strong communication with all major stakeholders to ensure their buy-in and reduce the risk of anyone withdrawing from participation, particularly as it becomes closer to making a decision. As mentioned in the proposal, we’ll manage these relationships throughout the process using calls, asynchronous discussions, and feedback monitoring.

The list of models we described was by no means exhaustive, and a stakeholder veto model for the devfund, as you suggest, is certainly a possibility moving forward.

If you’re open to chatting through some of these ideas, we would be more than happy to find a time to jump on a call (or whatever preferable format) and discuss in more detail.

2 Likes

There is a dire need for a governance overhaul, so you have my attention. However, just so it is clear, having an entity doing the intermediary between stakeholders is not at all how I envision the long term governance of the dev fund. If you initially managing the relationships is part of a bigger plan to let us connect directly, then I’d be very happy with that.

I don’t know that many stakeholders are actually participating or even looking at this forum, we may be able to clarify that soon. An idea I have been mulling over is the creation of an “exclusive”, secure and private, discussion area (Signal group or otherwise) restricted to entities holding more than 1‰, for more than one year, of the final ZEC supply; call it “Unit 21000” or whatever. Only 1000 entities can ever be in that group, but I’d estimate that we’ll get maybe 50-200 at most. That would be a reasonable size for a live discussion.

We should have such discussions area for 0.1‰ or less as well, but I don’t know that the format could be the same, at some point a large number of people could become difficult to follow and enable constructive discussions.

Yes, this is exactly the plan! We will manage the relationships in the short-term to ensure alignment while we identify the best methods to enable direct connections going forward.

Thank you for the idea, it’s greatly appreciated - we’ll make sure to include it in the option space and will reach out to iterate if relevant. In the workshop, we’ll present the option space with multiple potential governance model options that are fit for purpose and guide through the selection process.

2 Likes

Hello @areta,

Have you received any update regarding your application?

As you can see on the below thread, three CEOs in control of the code running the network, yet not elected by ZEC shareholders, are colluding to very quickly and quietly push forward with their plans to steal, once again, from ZEC holders.

This is happening in a context where they refuse to answer of the legitimacy of the vote they intend to push through.

I am looking forward to seeing your application approved; we really need someone to make sense of the current governance mess ECC and ZF have put the project in.

Hello,

Given the ongoing restructuring at the Foundation level, compressed funding timelines, and evolving decision-making processes, our ZCG application, in its current form, was not approved.

We remain engaged with the community and are open to contributing a more streamlined version of our proposal to support the development of a governance model should that be relevant in the future.

In the meantime, we’ll continue following the discussions and are always available for questions or further collaboration. Feel free to reach out anytime by DM.

1 Like

@areta Thank you for your submission. After consideration from @ZcashGrants and sufficient time for the community to provide feedback on the forum, the committee has decided to reject this proposal.

The committee appreciates your grant submission efforts and encourages you to continue as an active member of the Zcash community going forward!

2 Likes