and we are discussing not giving all the zec away at all times (something lots of candidates and the community has expressed)
For me it goes without saying that from the time of a application, to it being given al the zec, (and not as a 1 off grant but as block rewards based off milestones thus giving the zip enfocement powers over milestones)
What happens to these rewards? Does the foundation take a small % to invest - hear me out -
The foundation has shown it can build a vast warchest. - so even if the small % from the dev fee does not ROI then the foundation can replace the dev fund short fall via thier own chest.
This to me feels desirable but I cannot find a way to reconcile it with 1014 - unless they never touch 1014 - and only supluss, but 1014 doesnt say what to do in this situation.
I believe this mechanism should be used for all “profit sharing” grants.
These new idea threads are great but there is a process framework to be emulated and then innovated upon so don’t super worked up and your posts are great dude!
Just to put this in context, and because I don’t recall anyone synthesising this before…
Here are the block subsidy allocations to development (sources: ECC transparency report, ZIP 214; post-Canopy percentages are halved to enable comparison to pre-halving percentages):
| Period | MGRC | ZF | ECC | ECC employee comp
| — | — | — | — | — | — |
| October 2016 - October 2017 | — | ≥1.03% | 0.96% | 0.48% |
| October 2017 - June 2019 | — | 3.0% | 2.8% | 1.4% |
| June 2019 - November 2020 | — | 2.2% | 5.75% | 2.45% |
| November 2020 - November 2024 | 4% | 2.5% | 3.5% | — |
And published expenses (USD general expenses + ECC employee compensation in ZEC):
The initial investors received 16.4% of the FR, entirely within the first year (source). This equates to 3.28% of the block subsidy over 4 years, distributed as 13.12% of the block subsidy in year 1, and 0% in years 2-4. The other 83.6% of FR recipients (including ECC and ZF) shared 6.88% of the block subsidy in year 1, and 20% in years 2-4. The first ECC transparency report gives figures from late in year 2; I have therefore scaled these by 6.88/20 for year 1.
There is no public information (that I could find) about whether ZF received any FR donations from the initial investors; thus ZF’s first-year block subsidy percentage above (which is when any such donations would have been received) is a lower bound.
As stated in our Q1 update, our updated annual budget outlines $2.68mm of spending. We currently have roughly 110,700 ZEC, 46.3 BTC, and $4.3mm USD on hand.
The Zcash Foundation is definitely in a good position at the moment!
The context I was adding is that an obvious primary reason for ZF’s large current holdings is their significantly smaller expenditure compared to ECC. In the first few years, ZF was receiving a similar fraction of the block subsidy to ECC for general operations, but didn’t have the expenses of a full engineering team etc. (they only had two employees in 2017). ZF has also never paid for any security audits of the Zcash software or ecosystem, for example. So the ZF’s past ability to build up a chest of funds is not necessarily indicative of what is feasible for MGRC-funded engineering teams (or even ZF themselves, depending on whether, how, and in what direction they grow).
They are. As you outlined in your post this is in no small part to the ECC paying for the major dev work AND subsidising the zfnd.
I guess the bigger point I was trying to make is that if MG’s can give back some kind of ROI then that should go to the foundations warchest.
Hopefully over the past 4 years and the next 4 years this warchest, combined with all the new extra talent with zcash skills the project is looking very good - and should hopefully not tax miners anymore.
This to me would completely vindicate any form of dev fund in the eyes of any critics. btw I liked the stream, i just felt too stupid to talk in chat.
I have updated the block subsidy allocations table in my earlier post, because I had forgotten that the initial investors received their full payout within the first year, which skewed the other recipients’ percentages both in the first year and years 2-4. tl;dr ZF and ECC received in year 1 roughly a third of what they received in year 2.
ZF went from 0 engineers for 2 years maybe (might have the timing wrong, it was at least 6 months into my time on the board) to 1 then 3 and now 5. We also went from not having a client to write and audit to writing a full client that will require substantial security audits. Should this have happened quicker? Maybe. We also were not planning on there being a dev fund , so we had to be responsible with the funds. Regardless, I wouldn’t draw estimates from past expenditures.
ZF does have a grant process which has paid for ZECwallet among other things. Not speaking officially for the foundation, but I’d imagine we will probably keep running that program and adjust the amounts relative to our inflows and expenditures.
But keep in mind, we don’t know the MGRCs composition or plans. Some of the ideas floating around here, such as investing in companies, aren’t things ZF itself is likely to do and I’d imagine we’d prefer to run money through our grant process. Then again, if things prove amazingly effectively, we should consider them.
