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Funds may be withdrawn from the Volatility Reserve account only by that same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Funds may be withdrawn from the Volatility Reserve account only by that same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