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ZIP 1014: clarify how Volatility Reserve is managed and by whom. 

Originally 8ab85986be

Co-Authored-By: Eran Tromer <eran@tromer.org>
Signed-off-by: Daira Hopwood <daira@jacaranda.org>
This commit is contained in:
Daira Hopwood 2020-01-07 14:07:16 +00:00
parent 46690175b9
commit e6a5a5380c
1 changed files with 13 additions and 2 deletions
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zip-1014.rst
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@ -273,9 +273,12 @@ Funding Target and Volatility Reserve
Each Dev Fund slice has a Funding Target, initially US $700,000 for each Each Dev Fund slice has a Funding Target, initially US $700,000 for each
slice. At the end of each calendar month, the fair market value of the Dev slice. At the end of each calendar month, the fair market value of the Dev
Fund ZEC received during that month will be computed, and the excess over Fund ZEC received during that month will be computed, and the excess over
the Funding Target will be put into a dedicated Volatility Reserve account the Funding Target will be deposited into a dedicated Volatility Reserve
by the funds' recipient. account by the funds' recipient.
Each slice has its own separate Volatility reserve account, owned and
managed by the recipient (ECC or ZF), but limited in how it may be used
(i.e., analogously to some types of retirement or trust accounts).
Funds may be withdrawn from the Volatility Reserve account only by that same Funds may be withdrawn from the Volatility Reserve account only by that same
party, in months where the aforementioned monthly ZEC value falls short of party, in months where the aforementioned monthly ZEC value falls short of
the Funding Target, and only to the extent needed to cover that shortfall. the Funding Target, and only to the extent needed to cover that shortfall.
@ -294,6 +297,14 @@ and has not yet been used or disbursed, will be kept by the corresponding
party (as ZEC, or sold and invested) for later use under the terms of the party (as ZEC, or sold and invested) for later use under the terms of the
corresponding slice. corresponding slice.
Note that grantees of Major Grants are not directly subject to the Funding
Target, and do not have to manage a Volatility Reserve account; this is
addressed upstream by the Zcash Foundation, which awards these grants. The
hope is that the Foundation-managed ZF-MG Volatility Reserve will ultimately
form a large long-term "endowment" pool that cushions the volatility for the
various grantees, so grantees can focus on their work instead of hedging
short-term price risks.
Irrevocable obligations to the above must be made by the recipients (e.g., Irrevocable obligations to the above must be made by the recipients (e.g.,
using their Operating Agreements or by receiving the slice as Restricted using their Operating Agreements or by receiving the slice as Restricted
Funds). Funds).