ZIP 1014-1: Proposed Amendment to the “MG Slice (Major Grants)” Section

A sponsorship request (like a request to sponsor a hackathon or similar) submitted to ZOMG would be considered just like a grant request. Same pot of funds and same review process. As you said, not a part of this Zip amendment discussion.

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Someone posted their opinion about the ZIP 1014-1 Amendment anonymously on ZECpages. Posting here for everyone to see.

Source: ZECpages

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I’m coming around to @Dodger‘s thought process on presenting ZCAP with multiple questions. Let’s take a step back and simplify things a bit.

The reason we need to amend ZIP 1014 is to allow the MG Slice to be used for purposes other than issuing grants (i.e. a discretionary budget for ZOMG). Perhaps the amount of the budget and monetary cap do not need to be written into the ZIP Amendment. Similarly, whether or not the budget is allocated in ZEC or USD does not need to be specified in the amendment in the same way (I believe) ZIP 1014 does not specify that the grants need to be paid out to recipients in ZEC or USD.

If that’s the case, it makes things much easier. In the draft Amendment, I propose we replace this provision:

The total amount allocated to the Major Grants Review Committee SHALL be subject to a monetary cap of $XXX,XXX per year.

With this:

The total amount allocated to the Major Grants Review Committee SHALL be determined by the Zcash Community Advisory Panel.

Then, in the Helios poll, we ask three questions (similar to what @Dodger recommended) phrased something like this:

  1. Do you support amending ZIP 1014 to give ZOMG a discretionary budget? [Yes; No]

  2. What should the annual budget be? [3% or 3,156 ZEC; 5% or 5,260 ZEC; 10% or 10,519 ZEC]

  3. Should there be a cap? If so, what should it be? [$250K; $500K; $1M; No Cap].

This seems like a nice solution that gives us more flexibility because (depending on how ZCAP votes) if we ever need to increase or decrease the budget, we don’t have to go through the process of amending the ZIP again. It can be put to ZCAP for a vote.

cc: @Dodger @Alex_ZF @tromer

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This is great!

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I see it as our (ZF’s) responsibility to allow the community (as represented by ZCAP) the opportunity to express their preference.

I think it’s very important to avoid limiting the options presented to ZCAP in a way that risks skewing the result or preventing some members of ZCAP from being able to express their preference.

What we’re seeing here on this topic is very healthy - a proposal has been put forward, and other community members are commenting on it, giving feedback, making suggestions, and generally helping with the process of establishing a kind of “Overton window” of what the Zcash community is likely to find acceptable. To pick a single axis as an example, we have two members of the first ZOMG suggesting very different numbers: $100,000 from @Shawn versus $1m from @ml_sudo.

What we need to do now is refine the question(s) we’re going to ask ZCAP, so that we can accurately ascertain their sentiment and intent. There’s no obstacle to asking multiple questions in order to achieve that.

On the topic of complexity, I don’t think that caps and floors are overly-complex topics, and I think we can credit the ZCAP members with enough intelligence to be able to understand what they’re being asked to vote on. Don’t forget that the process that resulted in the creation of ZOMG started off with 13 different proposals that were filtered and distilled down to the ZIP 1014 that we know and love today. :grin:

On the topic of denominating the budget in USD vs ZEC (or, indeed, setting a floor and/or cap denominated in USD), we’d all be delighted prices of airline tickets and hotels were denominated in ZEC and fiat was the volatile currency but the fact is that we’re not there yet, and it doesn’t seem unreasonable to give ZCAP the opportunity to express a desire to set some parameters, particularly given the lack of clarity around what this budget is to be spent on. Bear in mind that those parameters can always be changed if circumstances warrant.

This is about giving power to the Zcash community. Limiting the options we present them in order to nudge the vote in a certain direction would be taking away their power.

Surrendering power to the people can be a scary thing but doing so strengthens Zcash.

I see it as a feature. If you imagine a spectrum with “Consensus” on one end, and “50%+1” on the other, our goal should be to end up a lot closer to “Consensus” than “50%+1”. I think this feature helps with that.

Technically true but, I suspect, unlikely. However, we could simply declare a policy for dealing with such an outcome in advance - e.g. “If the ZCAP poll recommends a floor that is higher than the cap, we will implement a floor and cap midway between the recommended floor and cap. i.e. If the poll recommends a cap of $100,000 and a floor or $250,000, we will institute a floor and cap of $175,000.”

This seems like a sensible approach.

I don’t think there’s anywhere else they could go. :man_shrugging:

In fact, that’s something that we may need to consult an attorney on - ensuring that the new/additional wording being added to the ZIP adequately respects and protects the restricted nature of the Major Grants slice donation to ZF.

Given the tight timeframes, I would suggest that we not try to lock down the precise wording at this point in the process but, instead, focus on ascertaining the Zcash community’s sentiment, and worry about translating that into precise wording afterwards. That way, we don’t risk approving a specific wording that turns out to be awkward or unworkable from a legal perspective, forcing us to go back to ZCAP with revised wording.

To answer this question, I will quote someone else:

It’s just more complicated. It’s not unworkable, by any means, but it will likely require more administrative effort to track expenditure, and past experience indicates that things are a lot simpler (and there is far less scope for misunderstanding and confusion) if a budget is simply denominated in USD.

I repeat: not unworkable, by any means.

In the interest of ensuring alignment of expectations, any potential/hypothetical future discretionary expenditure by ZOMG will be subject to the same policies as the Zcash Foundation.

For example, we have a travel policy that covers things like flights (economy class), lodging (stay at the venue-specific hotel or, if there isn’t one, use the prevailing market rate for a 3-star hotel as a rule of thumb) and transport (if you have the option of a $10 metro ride from the airport but you opt for a $100 Uber, you need to be able to justify the extra cost).

Finally, as an aside…

For the record, we’re happy to add a ZOMG section to the ZF’s new website (currently being designed).

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I am fine with this, but I want to be clear that this is not the process that was explained to me, otherwise I would have focused on this from the beginning. I was under the assumption that I was proposing an amendment to ZIP 1014 for ZCAP’s consideration and I laid out the process I was going to follow clearly months ago. Now, 6 days before the Helios poll convenes, you’re telling me that’s actually not the process, and that we’ll use the Helios poll to gather community sentiment and go from there. If that process was explained to me, I would have focused my time and energy on determining the questions to ask ZCAP rather than drafting the ZIP Amendment.

I would like to be part of the process to refine the questions we’re going to ask ZCAP. The way the questions were phrased in the last ZCAP poll conducted in August led to a lot of confusion. See these posts by @joshs and this thread by @nuttycom on ZCAP and the pathologies of choose-one voting.

How the questions are worded is incredibly important, and I want to ensure the questions ZCAP is asked related to the ZIP Amendment don’t lead to any unnecessary confusion.

For example, how you’ve laid out the questions in your previous posts (quoted above) could lead to confusion because you don’t note that the amounts referenced relate to an annual budget.

I am fine with this. We have 6 days until the Helios poll. Let’s work together and figure out what questions we’re going to ask ZCAP and how to properly phrase those questions.

Please let me know how you want to proceed.

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Referring back to @dontpanicburns question - Here’s how I imagined a % based allocation would work:

From the point of an agreed upon (read ZIP amendment/ZCAP approved) block # onwards until the next halving, a % of the incoming block reward allocated to MG is earmarked for ZOMG operational purposes. The MG committee then works operationally within their portion of earmarked funds and as necessary converts ZEC to USD for operational expenses.

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I have only been watching from afar, but it is frustrating to hear that Jason’s efforts seem to be confounded by a lack of clarity on the next steps. Is it just me or has there been an immense amount of due process already and doesn’t it feel like people are ready to move forward and make some decisions?

Also, I’d like to give kudos to everyone involved and it seems like especially to @aquietinvestor for doing the Lord’s work in organizing this whole process. I’m excited to have a more empowered Major Grants committee soon!

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I’m 99.9% sure that I made it clear quite early on that any new wording would need to be reviewed from a legal perspective.

But, whether I did or not, I understand your frustration. Rest assured that I’m not trying to stymie your efforts. This is the first time we’re tabling an amendment to ZIP 1014, which was itself the first of its kind. There is no pre-existing process for this, so we’re effectively breaking new ground, and it behooves us to be adaptable, particularly when doing so avoids unnecessary delay.

My suggestion that we avoid trying to lock in the precise wording at this point is motivated by a desire to get appropriate questions onto the upcoming ZCAP poll, and not incur any delay by blocking on legal review or risking a delay in implementation because we need to go back to ZCAP with revised wording (particularly in light of the frustratingly lengthy delay caused to the elections by the need to get advice on the COI/inurement issues!).

Edited to add: For what it’s worth, I don’t think the effort that you have already put into drafting the ZIP amendment is wasted. The process of writing down a proposed policy helps refine, clarify and improve the proposal because it forces one to clearly articulate one’s intent, and allows others to read it and provide feedback. In this case, it also provides a strawman for us to run by an attorney and ask “Are there any potential problems with this?”

You are. This is the process, right here, on this topic. Discussing, debating, giving feedback, making suggestions, agreeing furiously with one another, and raising good points like:

You’re absolutely right. For the avoidance of any doubt: I agree with you! :slight_smile:

So, having taken that feedback onboard, it seems to me that the best approach would be to propose an amendment to ZIP 1014 to provide MGRC (i.e. ZOMG) a discretionary budget from the Major Grants slice, with the amount to be determined by the ZCAP.

I would then suggest that there is a shortlist of three options for asking ZCAP to determine what the budget should be:

1. a “Simple” option:

  • Should ZOMG have a discretionary budget? (Yes/No)
  • If so, what should the annual budget be? (e.g. $100k, $250k, $500k, $1m)

2. Jason’s “ZEC with optional cap” option:

  • Do you support amending ZIP 1014 to give ZOMG a discretionary budget? (Yes; No)
  • What should the annual budget be? (1% of the ZOMG slice or approx. 1,052 ZEC; 3% or 3,156 ZEC; 5% or 5,260 ZEC; 10% or 10,519 ZEC)
  • Should there be a cap? If so, what should it be? ($100k, $250k, $500k, $1m, no cap)

3. a “Complex” option:

  • Should ZOMG have a discretionary budget? (Yes/No)
  • If so, should that budget be denominated in USD or ZEC? (USD/ZEC)
  • If USD, what should the annual budget be? (e.g. $100k, $250k, $500k, $1m)
  • If ZEC, what should the annual budget be? (e.g. 1% of the ZOMG slice or approx. 1,052 ZEC; 3% or 3,156 ZEC; 5% or 5,260 ZEC; 10% or 10,519 ZEC)
  • If the budget is to be denominated in ZEC, should there be an annual floor (denominated in USD)? (Yes/No)
  • If there is to be a floor, what should it be? (e.g. $100k, $250k, $500k, $1m)
  • If the budget is to be denominated in ZEC, should there be an annual cap (denominated in USD)? (Yes/No)
  • If there is to be a cap, what should it be? (e.g. $100k, $250k, $500k, $1m)

We’d also need to define what “cap” and “floor” means. For example, something like:

A cap on a budget denominated in ZEC would impose a USD cap on the budget, in the event of a large ZECUSD price increase. A floor would allow for the budget to be “topped up” to the USD floor using additional ZEC (over and above that in the specified budget) from the Major Grants slice in the event or a significant decline in the ZECUSD price.

And, as previously discussed, we should make it clear what would happen if ZCAP voted for a floor that is higher than the cap. For example:

If the ZCAP poll recommends a floor that is higher than the cap, we will implement a floor and cap midway between the recommended floor and cap. i.e. If the poll recommends a cap of $100,000 and a floor of $250,000, we will institute a floor and cap of $175,000.

FYI, I would recommend a simple USD-denominated budget because, as I mentioned above, denominating the budget in ZEC would mean that the implementation becomes more complicated, with more scope for confusion, misunderstanding, and/or a mismatch in expectations.

Please note that this is not me vetoing the idea of a budget denominated in ZEC! I am simply providing feedback and advice that is informed by ten months of interacting with the first ZOMG, which included some confusing conversations about the pitfalls of denominating grants in ZEC instead of USD.

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I’ve been re-reading this topic looking for potential issues and potential mismatches in expectations, and I noticed this statement:

Funds from the Major Grants slice of the Dev Fund are administered by ZF. ZOMG does not have its own bank account. The Major Grants funds are held in ZF’s accounts. Any necessary USD payments are made by ZF, recorded, tracks and accounted for appropriately, and included in our annual audit (which ensures that the Major Grants restricted donation is being spent only for the purposes for which is was intended).

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I really like the constructive discussions that are happening in this thread, one thing that has been asked for a few times that I don’t see a clear response on is, what are these funds to be used for? I’m fully in favor of ZOMG having operational funding, but it is difficult to give an opinion on what is the correct amount without any estimates.

If we could get some input from the inaugural committee on what they would have spent this funding on in their first year if they had it, including ballpark cost estimates for these items I think that would help the ZCAP greatly.

Inputs from the candidates for the next committee would also be valuable.

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I agree. I spoke to ML yesterday and she is going to help me get in touch with Chris and Holmes, so hopefully we hear from both of them before the Helios poll convenes on the 20th.

I’ve reached out to Hudson a couple times for his comments, but believe he has been out of pocket the last week or so. I will continue to follow up with him.

I will ping ML now and see if she can can provide some more color.

@Shawn responded upthread, which I’ve quoted below. If he wants to add some additional detail, that might be helpful.

Note that there are examples of what the funds can be used for in the text of the ZIP 1014 Amendment, which I have quoted below. The items I listed came from public and private conversations with members of the ZOMG-ZIP 1014 Independent Review Committee.

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You are correct. That was my misunderstanding on how the process would work. Sorry for the confusion. I have edited and updated that point.

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@Dodger and I have agreed to poll the community and request comments on how to present the questions to ZCAP. If you’re following this discussion, please participate in this poll:

Poll: How Should The ZIP 1014-1 Amendment Questions Be Presented To ZCAP?

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This is the key question that I’m also wondering about. If ZOMG had a % budget equal to $500k-1M USD what will it be spent on?

I tossed out the $100k number based on the things we worked on last year when getting ZOMG off the ground. Some things that $100k could have been spent on are:

  1. A more professional website (Holmes and I just used GitHub pages)
  2. A more professional logo (I made the one we have now in Adobe Illustrator, I’m definitely not a pro graphic designer :sweat_smile:)
  3. Hiring a contractor to help us follow up with grants (now handled by @decentralistdan )
  4. Tweaks and updates to the Grants platform (cost was covered by ZF)
  5. Social media campaigns to raise awareness to apply for a grant.

I’m sure if we would have had a set $ budget we could have come up with other stuff to spend it on too, but we would have added that work on top of the normal Grant review workload. Keeping in mind that anything added onto ZOMG plate takes time and effort to do well.

By adding items explicitly into the ZIP proposal, @aquietinvestor is suggesting what it could be spent on:

Are there some of those that could be served by ZF (Z-confrences, ZOMG support personnel) or by the existing Grants program (research)?

How much time beyond the expected 15hrs per month do the ZOMG members anticipate to be able to manage and organize these items on top of normal Grant review and follow up activity?

And as I mentioned before:

Is very broad terminology equating to a blank check for “Whatever things ZOMG can get the 5 members to agree to”.

Don’t get me wrong, I’m not against ZOMG having an independent operating budget of it’s own (more autonomy is better for decentralization) but in my opinion there needs to be accountability, realistic expectations for the time commitments required, and tangible benefits for Zcash users.

If it’s anything that attracts more Developers to build stuff on Zcash or drives adoption I’m strongly in favor of it. We just have to be diligent that it’s not an allocation of funds that would have been better spent by giving out Grants to professional full time teams building ZSAs, smart contracts, zkRollups, integrations, wallets, etc… for Zcash itself.

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I think you’ve hit the nail on the head with this post.

After reflecting on this some more I think that the $100k number you came up with would be sufficient, especially with the extra supports coming from ZF.

As things stand, unless persuaded otherwise by others with more detailed estimates I think I’ll be leaning towards whatever option is closest to your initial estimate.

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I’m okay not adding items explicitly into the amendment. If someone wants to propose alternative language to include, we can consider that. However, I think that it should be broad enough to not limit the independence and autonomy of ZOMG. At the end of the day, we should be able to trust the committee to make smart decisions that will benefit the Zcash ecosystem. There should be strong transparency requirements, and the community should scrutinize how ZOMG uses the funds and hold it accountable if they’re not using the funds wisely.

$100K may be sufficient. The nice thing about not writing the amount into the ZIP amendment is if ZOMG ever needs to increase or decrease the budget it can always be put to ZCAP for a vote. I feel a lot more comfortable having ZCAP decide what the budget should be rather than me trying to propose a budget/cap combo based on the comments I’ve received and putting that to ZCAP for a vote to approve or reject.

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Yep I really like that change that you suggested to the wording, allows us to be more flexible and agile in the future if needed.

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Shawn, I agree with this, but FWIW I do not think that “prior restraint governance” is an effective way to get this. By “prior restraint” governance I mean some combination of (a) explicit terms specifying what MUST and MUSTNT and SHOULD and SHOULDNT be done, and/or (b) some trusted third party who the intended agent has to get permission from every step of the way, so that the trusted third party can prevent the agent from going outside the intent.

(Gordon Mohr once memorably told me in private conversation that RFC 2119 terms like MUST and SHOULD are “governance theatre”. People think they’re getting assurance of the kind of performance that they want, but they aren’t actually.)

Instead, I recommend “trust but verify governance”. You specify the overarching goals and motivations in advance, and then you empower good people to do whatever they think is best for those goals. This empowers them, it signals that you trust their integrity and their judgment, and most importantly it sets them to accomplish things that you couldn’t have thought of in advance. Then, you need transparency, and after-the-fact scrutiny and guidance.

This strategy critically hinges on finding good people! People of high integrity and high skill. In a word: leaders. Fortunately, we’ve now demonstrated by two successive strong slates of ZOMG candidates that the Zcash community can muster people like that. It’s a huge strategic advantage that Zcash has over competitors (e.g. the USD :wink: ) and one that we should leverage to the max!

Just my two zats. :slight_smile:

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MINA Snapps Bootcamp & Hackathon slide:

After having taken part in the MINA Snapps Bootcamp & Hackthon last weekend and a couple ETH Global Hackathons over the years, I can confidently say that Hackathons go great lengths in connecting & inspiring builders and even building breakthrough proof of concepts that can be improved upon.

Regarding the discretionary funding bucket, I believe every zat coming from the Zcash block reward is a blessing! which allows the community to shape the future of ZEC as seen fit.

The MINA hackathon had $10,000 in participation prizes to every participant, now we may not want to directly compete with a pre-mined, VC coin in handing out 10 grand to participants, but if we have to make the choice in spending the funds we have access to, we could at least learn from how the other projects are pushing forward as they are our competition to gain investors, users and builders in the zero knowledge category.

Additionally, if we are allowed a discretionary spending budget, if possible, ZOMG members should be compensated from the ZOMG budget, and not be dependent upon ZF reserves. This change could alleviate the possible power issues brought up by @ml_sudo in the last few months.

That being said, I believe setting aside a higher cap of budget would be helpful to not start the discussion around every suggested activity by the limited 100k budget constraints, even the 18k per ZOMG compensation x 5 itself takes up 90% off the budget of 100k. Otherwise, I see the discretionary budget spent on outreach efforts to attract builders, spreading educational material via various social media channels and attending crypto related conferences.

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