<p>The key words "MUST" and "SHOULD" in this document are to be interpreted as described in RFC 2119. <aid="id1"class="footnote_reference"href="#rfc2119">1</a></p>
<p>The terms below are to be interpreted as follows:</p>
<dl>
<dt>ECC</dt>
<dd>Electric Coin Company, a US-based limited-liability corporation.</dd>
<dt>ZF</dt>
<dd>Zcash Foundation, a US-based non-profit corporation.</dd>
<dt>Halvening</dt>
<dd>a regularly-scheduled discontinuity where the rate of ZEC issuance halves, expected first in roughly October 2020 then next in roughly October 2024.</dd>
<p>After the 1st Zcash Halvening, when the "Founders’ Reward" system- bootstrapping protocol-based development funding expires, continue to direct 20% of new ZEC issuance to development-related activities for ongoing research, development, innovation, and maintenance of Zcash.</p>
<p>Assign half of such funds to the ECC, and half to the ZF. Continue this allocation until the 2nd Halvening.</p>
<p>There have been many proposals for potential allocations of Zcash block rewards (ZEC inflation) after the 1st Halvening. Many cluster around similar broad parameters:</p>
<ul>
<li>20% of block rewards for continuing development efforts;</li>
<li>provided to some combination of the Electric Coin Company (ECC), Zcash Foundation (ZF), and other named or to-be-determined entities;</li>
<li>conditioned on certain new allocation formulas or management practices, often involving novel entities, personnel, and feedback/deliberation processes.</li>
</ul>
<p>However, no existing ZIPs explicitly propose the most simple variation on this theme - one that maintains maximal continuity with prior practice. This 'Keep It Simple, Zcashers' ZIP aims to fill that gap.</p>
<p>To implement this ZIP, the Zcash protocol and compatible software MUST:</p>
<ul>
<li>maintain a 20% allotment of new ZEC issuance to development activities through to the 2nd Halvening event (expected around October 2024);</li>
<li>formalize a 50-50 relative allocation between the ECC and ZF;</li>
<li>deliver these ZEC to addresses provided by the recipients, in a manner analogous to the original "Founders’ Reward" consensus-encoded block rewards, or any other technically- and/or legally- preferred method agreed to by the ECC & ZF.</li>
</ul>
<p>This proposal specifically refrains from adding any new conditions or procedural formalities, technical or legal, on the delivery of development funds.</p>
<p>There is only the expectation that these recipients SHOULD continue the stated missions, practices of transparency, and responsiveness to community input that they have demonstrated thus far.</p>
<p>This proposal primarily differs from similar proposals in two ways: (1) it places no new comditions/processes on the disbursement of ZEC development funds; (2) it specifies a fixed, 50-50 division-of-funds between the ECC and ZF.</p>
<p>These differences are motivated by a desire for simplicity and continuity. This allocation can be implemented technically without novel institutions, processes, or legal agreements.</p>
<p>Rather than relying on lists-of-conditions with underspecified enforcement or dispute-resolution mechanisms, the adequate performance of fund recipients is expected due to:</p>
<ul>
<li>aligned incentives, especially the fact that the value of all funds received over 4 years depends completely on the continued health & growth of the Zcash ecosystem;</li>
<li>proven records of dedication to the Zcash project, and effective efforts on related projects, by receipient entities & personnel – even in the absence of formalized funding conditions.</li>
</ul>
<p>From original "Founders’ Reward"-era development-funds, roughly 15% has been directed to the ZF. (Or, about 3 points of the full 20 points of bootstrap- funds.) However, from its later start, the ZF has recently grown its technical, grantmaking, and organizational capabilities, and wide sentiment in the Zcash community, ECC, and ZF desires the ZF grow to a role of equivalent or greater importance as the ECC for long-term Zcash evolution. Thus this proposal specifies a 50:50 split of future development funds, rather than continuing any prior proportions.</p>
