mirror of https://github.com/zcash/zips.git
172 lines
7.2 KiB
ReStructuredText
172 lines
7.2 KiB
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ZIP: 1003
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Title: 20% Split Evenly Between the ECC and the Zcash Foundation, and a Voting System Mandate
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Owner: aristarchus (zcash forums)
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Status: Draft
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Category: Consensus / Process
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Created: 2019-06-19
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License: MIT
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Discussions-To: <https://forum.zcashcommunity.com/t/dev-fund-proposal-20-split-between-the-ecc-and-the-foundation/33862>
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Terminology
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===========
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The key words "MUST", "MUST NOT", "SHOULD", and "SHOULD NOT" in this document
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are to be interpreted as described in RFC 2119. [#RFC2119]_
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For clarity in this ZIP I define these terms:
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2nd Halvening period
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the 4-year period of time, roughly from October 2020 to October 2024,
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during which at most 5,250,000 ZEC will be minted.
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3rd Halvening period
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the 4-year period of time roughly from October 2024 to October 2028.
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DF%
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Dev Fund Percentage, the portion of newly minted ZEC in each block
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reserved for a development fund.
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Abstract
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========
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This proposal would allocate a 20% Dev Fund Percentage to be split evenly
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between the Electric Coin Company (ECC) and the Zcash Foundation during the
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2nd Halvening period. This proposal aims to be simple to implement, without
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a single point of failure, and comes with mandates for transparency,
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accountability and a mandate to build a development fund voting mechanism
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to be used during the 3rd Halvening period. This proposal is designed to
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strike a balance between ensuring that high quality development work can
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continue uninterrupted, with the need to further decentralize Zcash
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development funding as soon as possible.
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Motivation
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==========
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Strengths of this proposal:
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1. Simple to implement. I would rather developers spend time scaling Zcash
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rather than implementing the development funding mechanism.
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2. Developers will have several years to work on a great decentralized
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development funding voting mechanism.
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3. 20% is a large enough percentage that there should be enough development
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funding for many different ZEC price scenarios. To those who want to
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decrease this percentage: Overpaying for security is a gift to miners,
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to the detriment of every other stakeholder in the Zcash community.
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I will even make the strong statement that intentionally overpaying the
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miners for security is stealing from the other stakeholders.
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4. With two entities receiving funds there is no single point of failure.
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Requirements and Specification
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==============================
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1. DF% MUST be 20 percent, split evenly between ECC and the Zcash Foundation
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during the 2nd Halvening period.
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2. The Dev Fund MUST only be spent on research, development and adoption of
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Zcash.
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3. A voting system for development funding MUST be built and implemented in
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order to be used during the 3rd Halvening period.
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Voting System Requirements
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--------------------------
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Here are the general properties of the mandated voting mechanism. I don’t
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want to specify the technical implementation details, since I believe this
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is a job suited for the engineers building this system.
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1. Voting SHOULD be private.
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2. Only ZEC holders can vote.
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3. Voting should happen on-chain.
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4. In order to vote, you must lock your ZEC so it cannot be spent for a
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period of time. This is to force the voters to have ‘skin in the game’
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and prevent someone nefarious from buying a lot of ZEC just before an
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election and then dumping it immediately after.
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5. Voters can choose how long to lock their ZEC, and their voting power is
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proportional to the time that the ZEC is locked. For example, someone
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who votes with 10 ZEC and locks it for 6 months would have the same
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voting power as someone who votes with 20 ZEC and locks it for 3 months.
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Of course there must be a maximum lock time, perhaps a year, to prevent
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anyone from getting ‘infinite’ voting power by locking their ZEC
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permanently.
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6. The final results of the vote should be transparent to and verifiable by
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everyone.
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7. The system should be totally open and allow anyone/any organization to
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compete for funding to develop Zcash.
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Transparency and Accountability for the ECC and the Zcash Foundation
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--------------------------------------------------------------------
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These requirements would apply to both ECC and the Zcash Foundation. The
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mandate is to adhere to these accountability requirements originally put
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forward by the Foundation:
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* Monthly public developer calls, detailing current technical roadmap and
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updates.
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* Quarterly technology roadmap reports and updates.
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* Quarterly financial reports, detailing spending levels/burn rate and
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cash/ZEC on hand.
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* A yearly, audited financial report akin to the Form 990 for US-based
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nonprofits.
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* Yearly reviews of organization performance, along the lines of the
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State of the Zcash Foundation report [#zfnd-state]_.
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Requirements Specifically for the ECC
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-------------------------------------
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Motivated by the Zcash Foundation’s proposal that the ECC become a non-profit
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[#zfnd-guidance]_, I am going to list general requirements for the ECC to
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abide by if they choose to receive funds and work on behalf of ZEC holders.
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1. Because I share the Foundation’s concern that the ECC could be “beholden
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to its shareholders”, I am mandating that the ECC should be working in
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the service of the Zcash community and **shall serve no other masters**.
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The original investors/founders who are not still working in the service
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of the Zcash community SHOULD NOT have control over the use of the new
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development funds.
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2. The revenue received from the Dev Fund SHOULD NOT be used to give further
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rewards to, even indirectly, the investors, founders, or shareholders of
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the ECC, who are not working on Zcash after the first halving.
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**They have already received the Founders’ Reward and this new development
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fund is not supposed to further benefit them.**
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3. The ECC SHOULD offer competitive pay and **a stake in upside of the
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success of Zcash as a way to attract the best and brightest**. I do want
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the ECC be able to **maintain a world class team** capable of competing
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with the tech giants of the world (Google, Apple etc.).
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4. The ECC SHOULD **continue to engage with regulators** and advocate for
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privacy preserving technology. The **legal structure of the ECC must not
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hamper these critical efforts** in any way.
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I am not mandating non-profit status for the ECC. Maybe that is the best
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legal structure, maybe something else is better.
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Finally, in the event that the voting system isn’t implemented by the start
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of the 3rd Halvening period, the 20% of funds intended to go to the ‘voting
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development fund’ should instead not be minted.
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References
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==========
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.. [#RFC2119] `Key words for use in RFCs to Indicate Requirement Levels <https://tools.ietf.org/html/rfc2119>`_
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.. [#zfnd-state] `The State of the Zcash Foundation in 2019. Zcash Foundation blog, January 31, 2019. <https://www.zfnd.org/blog/foundation-in-2019/>`_
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.. [#zfnd-guidance] `Zcash Foundation Guidance on Dev Fund Proposals. Zcash Foundation blog, August 6, 2019. <https://www.zfnd.org/blog/dev-fund-guidance-and-timeline/>`_
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.. raw:: html
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<br>
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Change Log
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==========
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* 2019-06-19 Initial post
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* 2019-26-07 Listed three strengths of this proposal
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* 2019-08-13 Voting System Requirements
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* 2019-08-20 Requirements Specifically for the ECC
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* 2019-08-29 Update to be more like a ZIP draft.
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