mirror of https://github.com/zcash/zips.git
ZIP 1015: update FPF-related language
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Conrado Gouvea
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@ -25,6 +25,7 @@ Pull-Request: <<a href="https://github.com/zcash/zips/pull/881">https://githu
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<p>"Zcash Community Advisory Panel", also called "ZCAP", refers to the panel of community members assembled by the Zcash Foundation and described at <a id="footnote-reference-2" class="footnote_reference" href="#zcap">5</a>.</p>
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<p>"Zcash Community Grants", also called "ZCG", refers to the committee selected by the Zcash Community Advisory Panel or a successor process (e.g. as established by FPF) to decide on the funding of grants intended to fund the Zcash ecosystem.</p>
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<p>"Financial Privacy Foundation", also called "FPF", refers to the Cayman Islands-incorporated non-profit foundation company limited by guarantee of that name.</p>
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<p>"Autonomous Entities" refers to committees, DAOs, teams or other groups to which FPF provides operations, administrative, and financial management support.</p>
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</section>
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<section id="abstract"><h2><span class="section-heading">Abstract</span><span class="section-anchor"> <a rel="bookmark" href="#abstract"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
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<p>This ZIP proposes the allocation of a percentage of the Zcash block subsidy, post-November 2024 halving, split between Zcash Community Grants (ZCG) an in-protocol "lockbox." The "lockbox" is a separate pool of issued funds tracked by the protocol, as described in ZIP 2001: Lockbox Funding Streams <a id="footnote-reference-3" class="footnote_reference" href="#zip-2001">4</a>. No disbursement mechanism is currently defined for this "lockbox"; the Zcash community will need to decide upon and specify a suitable decentralized mechanism for permitting withdrawals from this lockbox in a future ZIP in order to make these funds available for funding grants to ecosystem participants.</p>
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@ -41,7 +42,7 @@ Pull-Request: <<a href="https://github.com/zcash/zips/pull/881">https://githu
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<li><strong>Community Involvement</strong>: The current system provides minimal formal input from the community regarding what projects should be funded, leading to a misalignment between funded projects and community priorities.</li>
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<li><strong>Moving Towards a Non-Direct Funding Model</strong>: There is strong community support for a non-direct Dev Fund funding model. Allocating funds to a Deferred Dev Fund Lockbox incentivizes the development of a decentralized mechanism for the disbursement of the locked funds.</li>
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<li><strong>Limited Runway</strong>: ZCG does not have the financial runway that ECC/BP and ZF have. As such, allocating ongoing funding to ZCG will help ensure the Zcash ecosystem has an active grants program.</li>
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<li><strong>Promoting Decentralization</strong>: Allocating a portion of the Dev Fund to Zcash Community Grants ensures small teams continue to receive funding to contribute to Zcash. Allowing the Dev Fund to expire, or putting 100% into a lockbox, would disproportionally impact grant recipients. This hybrid approach promotes decentralization and the growth of independent development teams.</li>
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<li><strong>Promoting Decentralization</strong>: Allocating a portion of the Dev Fund to Zcash Community Grants ensures small teams continue to receive funding to contribute to Zcash. Allowing the Dev Fund to expire, or putting 100% into a lockbox, would disproportionately impact grant recipients. This hybrid approach promotes decentralization and the growth of independent development teams.</li>
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<li><strong>Mitigating Regulatory Risks</strong>: The Financial Privacy Foundation (FPF) is a non-profit organization incorporated and based in the Cayman Islands. By minimizing direct funding of US-based organizations, this proposal helps to reduce potential regulatory scrutiny and legal risks.</li>
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</ol>
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<p>By addressing these issues, this proposal aims to ensure sustainable, efficient, and decentralized funding for essential activities within the Zcash ecosystem.</p>
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@ -69,15 +70,16 @@ Pull-Request: <<a href="https://github.com/zcash/zips/pull/881">https://githu
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<p>The stream allocated to Zcash Community Grants (ZCG) is intended to fund independent teams entering the Zcash ecosystem, to perform major ongoing development (or other work) for the public good of the Zcash ecosystem, to the extent that such teams are available and effective. The ZCG Committee is given the discretion to allocate funds not only to major grants, but also to a diverse range of projects that advance the usability, security, privacy, and adoption of Zcash, including community programs, dedicated resources, and other projects of varying sizes.</p>
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<p>The funds SHALL be received and administered by the Financial Privacy Foundation (FPF). FPF MUST disburse them for grants and expenses reasonably related to the administration of the ZCG program, but subject to the following additional constraints:</p>
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<ol type="1">
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<li>These funds MUST only be used to issue grants to external parties that are independent of FPF, and to pay for expenses reasonably related to the administration of the ZCG program. They MUST NOT be used by FPF for its internal operations and direct expenses not related to the administration of grants or the grants program.</li>
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<li>ZCG SHOULD support well-specified work proposed by the grantee, at reasonable market-rate costs. They can be of any duration or ongoing without a duration limit. Grants of indefinite duration SHOULD have semiannual review points for continuation of funding.</li>
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<li>These funds MUST only be used to issue Zcash Community Grants to external parties that are independent of FPF or to Autonomous Entities that operate under the FPF umbrella, and to pay for expenses reasonably related to the administration of Zcash Community Grants. They MUST NOT be used by FPF for its internal operations and direct expenses not related to administration of Zcash Community Grants.</li>
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<li>ZCG SHOULD support well-specified work proposed by the grantee, at reasonable market-rate costs. They can be of any duration or ongoing without a duration limit. Grants of indefinite duration SHOULD be reviewed periodically (on a schedule that the Zcash Community Grants Committee considers appropriate for the value and complexity of the grant) for continuation of funding.</li>
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<li>Priority SHOULD be given to major grants that bolster teams with substantial (current or prospective) continual existence, and set them up for long-term success, subject to the usual grant award considerations (impact, ability, risks, team, cost-effectiveness, etc.). Priority SHOULD be given to major grants that support ecosystem growth, for example through mentorship, coaching, technical resources, creating entrepreneurial opportunities, etc. If one proposal substantially duplicates another’s plans, priority SHOULD be given to the originator of the plans.</li>
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<li>The ZCG committee SHOULD be restricted to funding projects that further the Zcash cryptocurrency and its ecosystem (which is more specific than furthering financial privacy in general) as permitted by FPF and any relevant jurisdictional requirements.</li>
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<li>The ZCG committee SHOULD be restricted to funding projects that further the Zcash cryptocurrency and its ecosystem (which is more specific than furthering financial privacy in general) as permitted by any relevant jurisdictional requirements.</li>
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<li>ZCG awards are subject to approval by a five-seat ZCG Committee. The ZCG Committee SHALL be selected by the ZF’s Community Advisory Panel or a successor process (e.g. as established by FPF). Elections SHALL be staggered to ensure continuity within the Committee.</li>
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<li>The ZCG Committee’s funding decisions will be final, requiring no approval from the FPF Board, but are subject to veto if the FPF judges them to violate any relevant laws or other (current or future) obligations.</li>
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<li>ZCG Committee members SHALL have a one-year term and MAY sit for reelection. The ZCG Committee is subject to the same conflict of interest policy that governs the FPF Board of Directors (i.e. they MUST recuse themselves when voting on proposals where they have a financial interest). At most one person with association with the BP/ECC, at most one person with association with the ZF, and at most one person with association with FPF are allowed to sit on the ZCG Committee. “Association” here means: having a financial interest, full-time employment, being an officer, being a director, or having an immediate family relationship with any of the above. The ZF SHALL continue to operate the Community Advisory Panel and SHOULD work toward making it more representative and independent (more on that below). Similarly, FPF should also endeavor to establish its own means of collecting community sentiment for the purpose of administering ZCG elections.</li>
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<li>The ZCG Committee's funding decisions will be final, requiring no approval from the FPF Board, but are subject to veto if FPF judges them to violate Cayman law or the FPF's reporting requirements and other (current or future) obligations under the Cayman Islands' Companies Act (2023 Revision) and Foundation Companies Law, 2017.</li>
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<li>ZCG Committee members SHALL have a one-year term and MAY sit for reelection. The ZCG Committee is subject to the same conflict of interest policy that governs the FPF Board of Directors (i.e. they MUST recuse themselves when voting on proposals where they have a financial interest). At most one person with association with the BP/ECC, at most one person with association with the ZF, and at most one person with association with FPF are allowed to sit on the ZCG Committee. “Association” here means: having a financial interest, full-time employment, being an officer, being a director, or having an immediate family relationship with any of the above.</li>
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<li>A portion of the ZCG Slice shall be allocated to a Discretionary Budget, which may be disbursed for expenses reasonably related to the administration of the ZCG program. The amount of funds allocated to the Discretionary Budget SHALL be decided by the ZF’s Community Advisory Panel or successor process. Any disbursement of funds from the Discretionary Budget MUST be approved by the ZCG Committee. Expenses related to the administration of the ZCG program include, without limitation the following:
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<ul>
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<li>Paying for operational management and administration services that support the purpose of the Zcash Community Grants program, including administration services provided by FPF.</li>
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<li>Paying third party vendors for services related to domain name registration, or the design, website hosting and administration of websites for the ZCG Committee.</li>
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<li>Paying independent consultants to develop requests for proposals that align with the ZCG program.</li>
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<li>Paying independent consultants for expert review of grant applications.</li>
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@ -87,10 +89,10 @@ Pull-Request: <<a href="https://github.com/zcash/zips/pull/881">https://githu
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</ul>
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</li>
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<li>A portion of the Discretionary Budget MAY be allocated to provide reasonable compensation to members of the ZCG Committee. Committee member compensation SHALL be limited to the hours needed to successfully perform their positions and MUST align with the scope and responsibilities of their roles. The allocation and distribution of compensation to committee members SHALL be administered by the FPF. The compensation rate and hours for committee members SHALL be determined by the ZF’s Community Advisory Panel or successor process.</li>
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<li>The ZCG Committee’s decisions relating to the allocation and disbursement of funds from the Discretionary Budget will be final, requiring no approval from the FPF Board, but are subject to veto if the FPF judges them to violate laws or FPF reporting requirements and other (current or future) obligations.</li>
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<li>The ZCG Committee’s decisions relating to the allocation and disbursement of funds from the Discretionary Budget will be final, requiring no approval from the FPF Board, but are subject to veto if the FPF judges them to violate laws or FPF reporting requirements and other (current or future) obligations under Cayman Islands law.</li>
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</ol>
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<p>FPF SHALL recognize the ZCG slice of the Dev Fund as a Restricted Fund donation under the above constraints (suitably formalized), and keep separate accounting of its balance and usage under its Transparency and Accountability obligations defined below.</p>
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<p>FPF SHALL strive to define target metrics and key performance indicators, and the ZCG Committee SHOULD utilize these in its funding decisions.</p>
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<p>FPF SHALL be contractually required to recognize the ZCG slice of the Dev Fund as a Restricted Fund donation under the above constraints (suitably formalized), and keep separate accounting of its balance and usage under its Transparency and Accountability obligations defined below.</p>
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<p>ZCG SHALL strive to define target metrics and key performance indicators, and the ZCG Committee SHOULD utilize these in its funding decisions.</p>
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<section id="furthering-decentralization"><h5><span class="section-heading">Furthering Decentralization</span><span class="section-anchor"> <a rel="bookmark" href="#furthering-decentralization"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h5>
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<p>FPF SHALL conduct periodic reviews of the organizational structure, performance, and effectiveness of the ZCG program and committee, taking into consideration the input and recommendations of the ZCG Committee. As part of these periodic reviews, FPF MUST commit to exploring the possibility of transitioning ZCG into an independent organization if it is economically viable and it aligns with the interests of the Zcash ecosystem and prevailing community sentiment.</p>
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<p>In any transition toward independence, priority SHALL be given to maintaining or enhancing the decentralization of the Zcash ecosystem. The newly formed independent organization MUST ensure that decision-making processes remain community-driven, transparent, and responsive to the evolving needs of the Zcash community and ecosystem. In order to promote geographic decentralization, the new organization SHOULD keep its domicile outside of the United States.</p>
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@ -98,7 +100,7 @@ Pull-Request: <<a href="https://github.com/zcash/zips/pull/881">https://githu
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<section id="transparency-and-accountability"><h5><span class="section-heading">Transparency and Accountability</span><span class="section-anchor"> <a rel="bookmark" href="#transparency-and-accountability"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h5>
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<p>FPF MUST accept the following obligations in this section on behalf of ZCG:</p>
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<ul>
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<li>Publication of the ZCG Dashboard, providing a snapshot of ZCG’s current financials and any disbursements made to grantees.</li>
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<li>Publication of a ZCG Dashboard, providing a snapshot of ZCG’s current financials and any disbursements made to grantees.</li>
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<li>Bi-weekly meeting minutes documenting the decisions made by the ZCG committee on grants.</li>
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<li>Quarterly reports, detailing future plans, execution on previous plans, and finances (balances, and spending broken down by major categories).</li>
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<li>Annual detailed review of the organization performance and future plans.</li>
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@ -34,6 +34,10 @@ by FPF) to decide on the funding of grants intended to fund the Zcash ecosystem.
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Islands-incorporated non-profit foundation company limited by guarantee of
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that name.
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"Autonomous Entities" refers to committees, DAOs, teams or other groups to
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which FPF provides operations, administrative, and financial management
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support.
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Abstract
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========
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@ -118,7 +122,7 @@ funds. The alternatives presented here are intended to address the following:
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7. **Promoting Decentralization**: Allocating a portion of the Dev Fund to Zcash
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Community Grants ensures small teams continue to receive funding to
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contribute to Zcash. Allowing the Dev Fund to expire, or putting 100% into a
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lockbox, would disproportionally impact grant recipients. This hybrid
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lockbox, would disproportionately impact grant recipients. This hybrid
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approach promotes decentralization and the growth of independent development
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teams.
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@ -203,16 +207,19 @@ The funds SHALL be received and administered by the Financial Privacy Foundation
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administration of the ZCG program, but subject to the following additional
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constraints:
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1. These funds MUST only be used to issue grants to external parties that are
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independent of FPF, and to pay for expenses reasonably related to the
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administration of the ZCG program. They MUST NOT be used by FPF for
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its internal operations and direct expenses not related to the
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administration of grants or the grants program.
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1. These funds MUST only be used to issue Zcash Community Grants to external
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parties that are independent of FPF or to Autonomous Entities that operate
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under the FPF umbrella, and to pay for expenses reasonably related to
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the administration of Zcash Community Grants. They MUST NOT be used by FPF
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for its internal operations and direct expenses not related to
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administration of Zcash Community Grants.
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2. ZCG SHOULD support well-specified work proposed by the grantee, at
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reasonable market-rate costs. They can be of any duration or ongoing without
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a duration limit. Grants of indefinite duration SHOULD have semiannual
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review points for continuation of funding.
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a duration limit. Grants of indefinite duration SHOULD be reviewed
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periodically (on a schedule that the Zcash Community Grants Committee
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considers appropriate for the value and complexity of the grant) for
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continuation of funding.
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3. Priority SHOULD be given to major grants that bolster teams with substantial
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(current or prospective) continual existence, and set them up for long-term
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@ -225,17 +232,19 @@ constraints:
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4. The ZCG committee SHOULD be restricted to funding projects that further the
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Zcash cryptocurrency and its ecosystem (which is more specific than
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furthering financial privacy in general) as permitted by FPF
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and any relevant jurisdictional requirements.
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furthering financial privacy in general) as permitted by
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any relevant jurisdictional requirements.
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5. ZCG awards are subject to approval by a five-seat ZCG Committee. The ZCG
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Committee SHALL be selected by the ZF’s Community Advisory Panel or a
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successor process (e.g. as established by FPF). Elections SHALL be staggered
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to ensure continuity within the Committee.
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6. The ZCG Committee’s funding decisions will be final, requiring no approval
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from the FPF Board, but are subject to veto if the FPF judges them to
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violate any relevant laws or other (current or future) obligations.
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6. The ZCG Committee's funding decisions will be final, requiring no approval
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from the FPF Board, but are subject to veto if FPF judges them to violate
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Cayman law or the FPF's reporting requirements and other (current or future)
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obligations under the Cayman Islands' Companies Act (2023 Revision) and
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Foundation Companies Law, 2017.
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7. ZCG Committee members SHALL have a one-year term and MAY sit for reelection.
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The ZCG Committee is subject to the same conflict of interest policy that
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@ -246,11 +255,7 @@ constraints:
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are allowed to sit on the ZCG Committee.
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“Association” here means: having a financial interest, full-time employment,
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being an officer, being a director, or having an immediate family
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relationship with any of the above. The ZF SHALL continue to operate the
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Community Advisory Panel and SHOULD work toward making it more
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representative and independent (more on that below). Similarly, FPF should
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also endeavor to establish its own means of collecting community sentiment
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for the purpose of administering ZCG elections.
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relationship with any of the above.
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8. A portion of the ZCG Slice shall be allocated to a Discretionary Budget,
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which may be disbursed for expenses reasonably related to the administration
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@ -260,6 +265,9 @@ constraints:
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approved by the ZCG Committee. Expenses related to the administration of the
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ZCG program include, without limitation the following:
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* Paying for operational management and administration services that
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support the purpose of the Zcash Community Grants program, including
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administration services provided by FPF.
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* Paying third party vendors for services related to domain name
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registration, or the design, website hosting and administration of
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websites for the ZCG Committee.
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@ -285,14 +293,14 @@ constraints:
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of funds from the Discretionary Budget will be final, requiring no approval
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from the FPF Board, but are subject to veto if the FPF judges
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them to violate laws or FPF reporting requirements and other
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(current or future) obligations.
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(current or future) obligations under Cayman Islands law.
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FPF SHALL recognize the ZCG slice of the Dev Fund as a Restricted Fund
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donation under the above constraints (suitably formalized), and keep separate
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accounting of its balance and usage under its Transparency and Accountability
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obligations defined below.
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FPF SHALL be contractually required to recognize the ZCG slice of the Dev Fund
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as a Restricted Fund donation under the above constraints (suitably formalized),
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and keep separate accounting of its balance and usage under its Transparency and
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Accountability obligations defined below.
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FPF SHALL strive to define target metrics and key performance indicators,
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ZCG SHALL strive to define target metrics and key performance indicators,
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and the ZCG Committee SHOULD utilize these in its funding decisions.
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Furthering Decentralization
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@ -317,7 +325,7 @@ Transparency and Accountability
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FPF MUST accept the following obligations in this section on behalf of ZCG:
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* Publication of the ZCG Dashboard, providing a snapshot of ZCG’s current
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* Publication of a ZCG Dashboard, providing a snapshot of ZCG’s current
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financials and any disbursements made to grantees.
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* Bi-weekly meeting minutes documenting the decisions made by the ZCG committee
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on grants.
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