Proposal to create a Zcash Ecosystem Fund directly funded by the Founder's Reward


#10

https://twitter.com/zooko/status/1014958954156347392 further note that perhaps these community votes should not be considered binding


#11

NACK for the proposed timescale for the reasons given by @str4d, and NACK overall due to the erroneous statement of the current FR distribution and miscalculation of what 1% of FR would be. Also, NACK for “one of my partners in China or Japan are the manager of record for this fund”; I have no idea who that would be, and it doesn’t sound like a very accountable approach to choosing a fund manager.

Disclosure of interest: I am a founders’ reward recipient. And by the way I don’t consent to any of my share of the FR being redirected.


#12

In addition, baking the specific FR distribution into the consensus protocol doesn’t sound like a good idea from a technical or opsec perspective to me. Currently, the FR destination address changes every month (the 48 addresses over the 4 years of FR are fixed in advance). The operational security requirements imposed on the direct FR recipient are pretty substantial, since the FR addresses can’t be changed except by an emergency network upgrade. Adding new direct recipients would be imposing those opsec requirements on all of them, since each direct recipient would still be a juicy target.


Founder's Addresses and private keys
#13

So, it seems to me that this proposal is asking the Zcash Foundation to do something it doesn’t have the authority to do: that is, modify the terms of ZcashCo’s contracts with affected FR recipients, to the detriment of those recipients. (You can argue that it would increase the value of ZEC but I disagree, and actually the only relevant opinions here are those of the affected FR recipients and ZcashCo management.) This would require the consent of affected FR recipients which the Foundation doesn’t have. The proposal should therefore be closed.


#14

I agree with @daira that a change of this nature would have had to been done before launch rather than retroactively.

As far as the actual proposal, the ideas around who would decide what and why seems to have some serious centralization and trust issues that just wouldn’t be accepted.

Why not just give all of the FRs to @root and they can decide what happens? We can try it for a year and afterwards you can do whatever you want. /j /s :wink:


#15

NACK for the proposed timescale for the reasons given by @str4d, and

Again, not a formal proposal, more of a request for comments. Agreed initially proposed timescale doesn’t work, so I suggest we push to the next network upgrade after Sapling.

NACK overall due to the erroneous statement of the current FR distribution and miscalculation of what 1% of FR would be.

Please correct me if I’m wrong about the percentages or numbers here–the data isn’t as public as would be nice, so I had to base it off a screenshot of a slide someone sent me.

Also, NACK for “one of my partners in China or Japan are the manager of record for this fund”; I have no idea who that would be, and it doesn’t sound like a very accountable approach to choosing a fund manager.

Hah. Just a suggestion that whoever manages this fund (I am not at all attached to it being me or anyone affiliated with me!) should ideally not be US affiliated, since the rest of the Zcash org mostly is. Before anything was finalized, a fund manager or managers would have to be specified of course.

Disclosure of interest: I am a founders’ reward recipient. And by the way I don’t consent to any of my share of the FR being redirected.

Noted

In addition, baking the specific FR distribution into the consensus protocol doesn’t sound like a good idea from a technical or opsec perspective to me. Currently, the FR destination address changes every month (the 48 addresses over the 4 years of FR are fixed in advance). The operational security requirements imposed on the direct FR recipient are pretty substantial, since the FR addresses can’t be changed except by an emergency network upgrade. Adding new direct recipients would be imposing those opsec requirements on all of them, since each direct recipient would still be a juicy target.

Am I correct in assuming the rotating addresses is to minimize the damage done if one is compromised? If that’s the case, then baking FR targets in could use the same approach (each FR recipient gets a 48 monthly FR distribution addresses)

So, it seems to me that this proposal is asking the Zcash Foundation to do something it doesn’t have the authority to do: that is, modify the terms of ZcashCo’s contracts with affected FR recipients, to the detriment of those recipients.

No, I am not proposing that the foundation does anything. I’m making a proposal to the Zcash Community, an amorphous and undefined group of people that I conceive of as including everyone who sends or receives ZEC, everyone running a fullnode, miners, and of course the members of the Zcash Co and the Zcash Foundation. This kind of messy decentralized consenus is a more robust way of making governance decisions than appealing to the authority of some foundation, and a big part of why I want to try this is as a “proof of decentralization” (or not) of Zcash.

(You can argue that it would increase the value of ZEC but I disagree, and actually the only relevant opinions here are those of the affected FR recipients and ZcashCo management.)

I disagree that the only relevant opinions here are FR recipients and Zcash Co management. That sounds very centralized–I think this proposal should be decided on by the community at large.

This would require the consent of affected FR recipients which the Foundation doesn’t have. The proposal should therefore be closed.

I think this requires broad community support, but disagree that it necessarily requires consent from every FR recipient.

Thanks very much for your pushback and thoughts on this, important feedback!


#16

I stated this on the ZCash ZCon0 Telegram group, and doing so here as well to maintain the record.

“I see it as:

Protocol and Cryptographic research/design (ZCash co)

Community and General welfare of protocol (ZCash foundation)

and this would propose a new pillar; a investor and speculator centric group focused on future value creation and financial sustainability (ZCash community fund)

I think these 3 core entities all getting a portion of the reward (similar to how @wheatpond described it) outlines a diversified, loosely coupled group of folks, all tightly coupled to the future of the ZCash protocol. Creating a solid basis by which to organically maintain governance as well”

———

It would seem the most crucial, immediate hindrances to this are technical and op sec issues relating to the implementation and receipt of any FR changes, as well who has the authority over such process now that the chain is live (understandably so). If those can be addressed (perhaps with a less invasive in-protocol change), and a more formal, organic agreement to have current FR recipients perhaps contribute a share to an initiative like this, if the community seems it useful, could be a worthwhile compromise, too. With slightly less social and technical overhead. Per my post above, this could create an interesting forked prong approach to governance (Technical research incentivized (zcashco), community growth and technical contribution (foundation), and the investment/speculator growth of asset and services built atop (community fund).

Imagine a figurative fork, with each prong one of the above entities. Each necessary to take a bite out of a figurative steak.

Just my 2 bits


#17

The data is pubblic and easy to calculate:
20% of 12.5 ZEC of every block goes to FR. That’s 2.5 ZEC per block.
Blocks happend every 2 minutes and 30 seconds, thats 576 blocks per day.
2.5 ZEC x 576 Blocks = 1440 ZEC per day @ FR
1% of this would be 14.4 ZEC per day, so 432 ZEC per month.

That’s part of the contract. I mean, no one was forced to pick up zcash and FR were clear from the beginning. So coming in here after 2 years of FR payed and stating it’s “very centralized” is hypocritical.

I strongly feel this is your only interest.


#18

In the name of open debate you’re crossing a line here, that doesn’t respect people’s safety and boundaries.

The founders’ shares are theirs, like your salary and savings are yours.
It is fine to suggest to someone - you should spend your money this way, you should donate to that cause, ect.
As a sidenote let’s recall that initially there was no foundation and the founder donations were so large that its budget is larger than the company’s now.

It’s not fine to pose as a question to the community - what should we do with this person’s money?
That question implies it’s the community’s decision and doesn’t require the person’s consent.
I.e., the question implies it is legitimate to steal from this person;
and thus is a pretty violent act.


#19

I fully agree. We’ve indulged this thread too long, it’s time to close it.

Link to further explanation of this moderation decision: https://www.reddit.com/r/zec/comments/8x259a/comment/e20t00k

[Edit: I stand fully by this decision and believe that reopening the thread is a mistake. As I’ve said before, Eric or anyone else was at liberty to post another thread with an acceptable (and less error-ridden) proposal; no-one was being “censored”.]


#20

#21

#22

As part-time admin, I override daira’s moderation decision to close this thread based on the emerging consensus that this post was not in clear violation of community guidelines for forum discussion. With all due respect to parties involved, further discussion can continue on this thread.


Community Poll: Unlocking "Zcash Ecosystem Fund" Forum Thread
#23

Thank you @ericmeltzer for publishing this proposal and asking for feedback. I very much disagree with the proposal, for the following reasons:

  1. We need the employees of the Zcash Company fully incentivized to work as hard as they can towards Zcash realizing its full potential. Their full share of the Founders Reward helps provide that incentive for at least the next 2.3 years (and hopefully beyond that, assuming that many of them will continue to hold ZEC well into the future and thus will have a financial interest in the price of ZEC appreciating).

  2. Your partner at INBlockchain, Xiaolai Li, was an early investor in the Zcash Company, has an ownership interest in the Company, and is a recipient of the Founders Reward. Li already received his complete share of the Founders Reward because the investors were paid out in full during the first year. In contrast, the non-investor recipients are still be paid out. It seems unfair that, after Li has been paid out in full, Li’s Company would put forth a proposal that dilutes the Founders Reward shares of all the non-investor recipients that are still in the process of being paid out. Even worse, the proposed dilution directly favors Li (via management fees and possibly the ability to invest in companies that INBlockchain has existing ownership interests in).

  3. The Zcash Company owes a fiduciary duty to all of its owners. The proposal arguably calls for a violation of that fiduciary duty, by conferring a benefit to one owner, Xiaolai Li, at the direct expense of the non-investor owners.

  4. As @daira has argued, the proposal arguably calls for the Zcash Company to breach its contractual agreements with its employees, by diluting the Founders Reward shares owed to the employees.

(As an aside, I applaud the unlocking of this thread. Let’s say that I signed a contract with the Zcash Company in which the Zcash Company agreed to never change the mining algorithm. Would forum discussions advocating that the Zcash Company change the mining algorithm be inappropriate because I have a contract with the Zcash Company and I do not consent to the Company breaching the contract? Of course not.)


#24

I’ve said it elsewhere so I might as well say it here: taking FR recipient’s money without their consent is theft. The fact that the source of funds is FR recipients’ contracted payments isn’t some inadvertent mistake; Eric has said quite clearly that he doesn’t think that the recipients need to consent to having their money taken. It’s insulting and disgraceful. It’s also utterly counterproductive: since the investors have already received their share, a large proportion of the money involved is being taken from the Zcash developers. You know, the people who are currently actually doing the work. How does this incentivize them?

The fact that this proposal is associated with the company of an investor who has already received their full FR payment leaves a particularly bad taste.


#25

Then don’t include Xiaolai Li. There are other ways this proposal could be worded/worked. Closing threads just because you have a vested interested in the FR stake yourself is a conflict of interest.

You can let your griefs to the proposal be known, and explain why it’s a “bad idea”, but censoring and closing down threads on what’s supposed to be a censor free network/project (aside from breaking community guidelines) is concerning to the future of the project.

There are other people aside from Zcash members and FR receivers that want ZEC to succeed ya know.


#26

Were any of the FR recipients, the only direcly affected people, contacted prior to the presentation being presented? Because if thats the case and somehow this isn’t theft then it becomes a question of the ethical basis surrounding the proposal

Edit- he’s violated the FR recipients right to PRIVACY regarding their personal finances


#27

As I mentioned on Twitter, I think the idea of a eco-system fund as a “fast track” style incentive program to get projects going faster than the Foundation Grant program allows for is a good one.

I would hate to see this entire concept shelved due to disagreement over the source of the funds. I don’t personally think that re-structuring the Founders Reward is a viable (or popular) option for contractual and future development reasons.

But that shouldn’t exclude the possibility of a well-defined fund being created that anyone (founders included) could join or contribute to.

I don’t know who is in the best position to run such a fund, or if it could be structured like the Bitcoin Investment Trust set up by Grayscale. There are a lot of nuanced parts (legal, management, transparency, etc…) to setting up these kinds of programs but in the long term it could be a benefit for Zcash as a whole if it drives adoption.


#28

Agree. I like the base idea of this, but the funding thoughts are just not possible, and just cannot be done. That’s why I say shelf the FR thoughts, and start brain storming other avenues to fund this idea.


#29

Here is the Foundation’s response to all of this: https://z.cash.foundation//blog/founders-reward/