<p>The key words "MUST", "REQUIRED", "MUST NOT", "SHOULD", and "MAY" in this document are to be interpreted as described in BCP 14 <aid="footnote-reference-1"class="footnote_reference"href="#bcp14">1</a> when, and only when, they appear in all capitals.</p>
<p>This ZIP specifies a change to the Zcash consensus protocol to define a pool of issued Zcash value to be used to fund future development efforts within the Zcash ecosystem.</p>
<p>This ZIP builds upon the funding stream mechanism defined in ZIP 207 <aid="footnote-reference-2"class="footnote_reference"href="#zip-0207">3</a>. It defines a new "DEFERRED_POOL" funding stream type such that portions of the block reward sent to a stream of this type are deposited directly into the deferred funding pool instead of being sent to a recipient address. Other ways of adding to the pool, such as allowing for direct deposits or fee value currently allocated to miners may be defined in the future.</p>
<p>In accordance with ZIP 1014, <aid="footnote-reference-3"class="footnote_reference"href="#zip-1014">2</a> the Zcash block reward is allocated with 80% going to miners, and the remaining 20% distributed among the Major Grants Fund (8%), Electric Coin Company (ECC) (7%), and the Zcash Foundation (ZF) (5%). This funding structure supports various essential activities such as protocol development, security, marketing, and legal expenses. However, this model will expire in November 2024, leading to the entire block reward being allocated to miners if no changes are made.</p>
<p>Several draft ZIPs under consideration for replacing the existing direct allocation of block rewards suggest that part of the block reward be directed to a reserve, the distribution of which is to be determined via a future ZIP. This ZIP is intended to provide a common mechanism that can be used to implement these various proposals.</p>
for the deferred funding pool, in much the same fashion as it maintains chain pool value balances for the transparent, Sprout, Sapling, and Orchard pools.</p>
<p>The funding stream mechanism defined in ZIP 207 <aid="footnote-reference-4"class="footnote_reference"href="#zip-0207">3</a> is modified such that a funding stream may deposit funds into the deferred pool.</p>
<h3>Modifications to ZIP 207 <aid="footnote-reference-5"class="footnote_reference"href="#zip-0207">3</a></h3>
<p>The following paragraph is added to the section <strong>Motivation</strong>:</p>
<blockquote>
<p>ZIP TBD <aid="footnote-reference-6"class="footnote_reference"href="#draft-nuttycom-funding-allocation">6</a> directs part of the block reward to a reserve, the distribution of which is to be determined via a future ZIP. ZIP 2001 <aid="footnote-reference-7"class="footnote_reference"href="#zip-2001">7</a> modified this ZIP to augment the funding stream mechanism with a common mechanism to implement this proposal.</p>
</blockquote>
<p>In the section <strong>Funding streams</strong><aid="footnote-reference-8"class="footnote_reference"href="#zip-0207-funding-streams">4</a>, instead of:</p>
<p>Each funding stream has an associated sequence of recipient addresses, each of which MUST be either a transparent P2SH address or a Sapling address.</p>
</blockquote>
<p>it will be modified to read:</p>
<blockquote>
<p>Each funding stream has an associated sequence of recipients, each of which MUST be either a transparent P2SH address, a Sapling address, or the identifier <cite>DEFERRED_POOL</cite>.</p>
<p>After the section <strong>Funding streams</strong>, a new section is added with the heading "Deferred Development Fund Chain Value Pool Balance" and the following contents:</p>
chain value pool balance for a given block chain is the sum of the values of payments to <cite>DEFERRED_POOL</cite> for transactions in the block chain.</p>
<p>In the section <strong>Consensus rules</strong><aid="footnote-reference-9"class="footnote_reference"href="#zip-0207-consensus-rules">5</a>, instead of:</p>
<blockquote>
<ul>
<li>The coinbase transaction in each block MUST contain at least one output per active funding stream that pays the stream's value in the prescribed way to the stream's recipient address for the block's height.</li>
</ul>
</blockquote>
<p>it will be modified to read:</p>
<blockquote>
<ul>
<li>In each block, for each active funding stream with a recipient other than <cite>DEFERRED_POOL</cite> at that block's height, the block's coinbase transaction MUST contain at least one output that pays the stream's value in the prescribed way to that recipient.</li>
</ul>
</blockquote>
<p>After the list of post-Canopy consensus rules, the following paragraph is added:</p>
<sectionid="modifications-to-the-protocol-specification"><h3><spanclass="section-heading">Modifications to the protocol specification</span><spanclass="section-anchor"><arel="bookmark"href="#modifications-to-the-protocol-specification"><imgwidth="24"height="24"class="section-anchor"src="assets/images/section-anchor.png"alt=""></a></span></h3>
<li>define the "total input value" of its coinbase transaction to be the value in zatoshi of the block subsidy, plus the transaction fees paid by transactions in the block.</li>
</ul>
<p>The total output value of a coinbase transaction MUST NOT be greater than its total input value.</p>
<p>Note: this ZIP and ZIP 236 both make changes to the above rule. Their combined effect is that the last paragraph will be replaced by:</p>
<blockquote>
<p>[Pre-NU6] The total output value of a coinbase transaction MUST NOT be greater than its total input value.</p>
<p>[NU6 onward] The total output value of a coinbase transaction MUST be equal to its total input value.</p>
</blockquote>
<p>Section <strong>7.10 Payment of Funding Streams</strong><aid="footnote-reference-11"class="footnote_reference"href="#protocol-fundingstreams">12</a> contains language and definitions copied from ZIP 207; it should be updated to reflect the changes made above.</p>
<p>In section <strong>3.4 Transactions and Treestates</strong><aid="footnote-reference-12"class="footnote_reference"href="#protocol-transactions">9</a>, a definition of "total issued supply" will be added, such that the total issued supply as of a given height is given by the function:</p>
<p>The second paragraph of section <strong>1.2 High-level Overview</strong><aid="footnote-reference-13"class="footnote_reference"href="#protocol-overview">8</a> should also be updated to take into account the deferred chain value pool. Since that section of the specification is entirely non-normative, we do not give the full wording change here.</p>
<td><ahref="https://www.rfc-editor.org/info/bcp14">Information on BCP 14 — "RFC 2119: Key words for use in RFCs to Indicate Requirement Levels" and "RFC 8174: Ambiguity of Uppercase vs Lowercase in RFC 2119 Key Words"</a></td>
</tr>
</tbody>
</table>
<tableid="zip-1014"class="footnote">
<tbody>
<tr>
<th>2</th>
<td><ahref="zip-1014">ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants</a></td>