zips/draft-nuttycom-lockbox-streams.rst

::

  ZIP: Unassigned
  Title: Lockbox Funding Streams
  Owners: Kris Nuttycombe <kris@nutty.land>
  Credits: Daira-Emma Hopwood <daira-emma@electriccoin.co>
           Jack Grigg <jack@electriccoin.co>
  Status: Draft
  Category: Consensus
  Created: 2024-07-02
  License: MIT
  Pull-Request: <https://github.com/zcash/zips/pull/>

Terminology
===========

The key words "MUST", "REQUIRED", "MUST NOT", "SHOULD", and "MAY" in this
document are to be interpreted as described in BCP 14 [#BCP14]_ when, and only
when, they appear in all capitals.

Abstract
========

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.

This ZIP builds upon the funding stream mechanism defined in ZIP 207
[#zip-0207]_. 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.

Motivation
==========

In accordance with ZIP 1014, [#zip-1014]_ 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.

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.

Requirements
============

The Zcash protocol will maintain a new Deferred chain pool value balance
:math:`\mathsf{PoolValue}_{Deferred}` 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.

The funding stream mechanism defined in ZIP 207 [#zip-0207]_ is modified such
that a funding stream may deposit funds into the deferred pool.

Specification
=============

Deferred Development Fund Chain Value Pool Balance
--------------------------------------------------

Full node implementations MUST track an additional
:math:`\mathsf{PoolValue}_{Deferred}` chain value pool balance, in addition to
the Sprout, Sapling, and Orchard chain value pool balances. This balance is
set to zero prior to the activation of Network Upgrade 6.

ZIP 207 [#zip-0207]_ is modified as follows:

In the section **Funding streams** [#zip-0207-funding-streams]_, instead of:

    Each funding stream has an associated sequence of recipient addresses,
    each of which MUST be either a transparent P2SH address or a Sapling address.

it will be modified to read:

    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
    `DEFERRED_POOL`.

In the section **Consensus rules** [#zip-0207-consensus-rules]_, the following
will be added:

    The "prescribed way" to pay to the `DEFERRED_POOL` is to add
    :math:`\mathsf{FundingStream[FUND].Value}(\mathsf{height})` to
    :math:`\mathsf{PoolValue}_{Deferred}`.

The protocol specification is modified to define the "total issued supply" such
that the total issued supply as of a given height is given by the function:

.. math::

    \begin{array}{ll}
    \mathsf{IssuedSupply}(\mathsf{height}) := &\!\!\!\!\mathsf{PoolValue}_{Transparent}(\mathsf{height}) \\
    &+\;\; \mathsf{PoolValue}_{Sprout}(\mathsf{height}) \\
    &+\,\; \mathsf{PoolValue}_{Sapling}(\mathsf{height}) \\
    &+\,\; \mathsf{PoolValue}_{Orchard}(\mathsf{height}) \\
    &+\,\; \mathsf{PoolValue}_{Deferred}(\mathsf{height})
    \end{array}

References
==========

.. [#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" <https://www.rfc-editor.org/info/bcp14>`_
.. [#zip-1014] `ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants <zip-1014.rst>`_
.. [#zip-0207] `ZIP 207: Funding Streams <zip-0207.rst>`_
.. [#zip-0207-funding-streams] `ZIP 207: Funding Streams. Section: Funding streams <zip-0207.rst#funding-streams>`_
.. [#zip-0207-consensus-rules] `ZIP 207: Funding Streams. Section: Consensus rules <zip-0207.rst#consensus-rules>`_