mirror of https://github.com/zcash/zips.git
273 lines
12 KiB
ReStructuredText
273 lines
12 KiB
ReStructuredText
::
|
||
|
||
ZIP: 1009
|
||
Title: Five-Entity Strategic Council
|
||
Owner: Avichal Garg <avichalgarg@electriccapital.com>
|
||
Status: Obsolete
|
||
Category: Consensus Process
|
||
Created: 2019-08-28
|
||
License: MIT
|
||
Discussions-To: <https://forum.zcashcommunity.com/t/dev-fund-proposal-5-entity-strategic-council-approach/34801>
|
||
|
||
|
||
Terminology
|
||
===========
|
||
|
||
*Key terms*
|
||
|
||
Developer Fund
|
||
20% of the mined ZEC in the four-year period from approximately October 2020
|
||
to October 2024, during which at most 5,250,000 ZEC will be minted.
|
||
|
||
Strategic Council
|
||
A five-person committee that determines how to allocate the Developer Fund.
|
||
Held accountable to the community via regular elections.
|
||
|
||
Executor
|
||
An individual, group, company, or other organization that receives funding
|
||
from the Strategic Council. They are responsible for excellent execution
|
||
and held accountable by the Strategic Council.
|
||
|
||
|
||
Abstract
|
||
========
|
||
|
||
This proposal reserves 20% of newly minted coins in each block for a Developer
|
||
Fund. A five-person Strategic Council would be elected by the community every
|
||
two years. The Strategic Council would determine the high level strategy,
|
||
goals, and metrics to evaluate progress for the ecosystem on a six-month
|
||
cadence. The Strategic Council would be responsible for allocating funding to
|
||
Executors for the subsequent six months and summarizing the performance of
|
||
Executors in the prior six months. Executors would submit proposals to the
|
||
Strategic Council on a six-month cadence, including project plans, funding
|
||
plans, and how they will measure success on a scale from 1-10. At the end of
|
||
six months, Executors will grade themselves and the Strategic Council will
|
||
summarize what was accomplished with a target of 7/10 in every quarter on a
|
||
roll-up basis (a simple average of all of the outstanding projects for that
|
||
six months).
|
||
|
||
|
||
Out of Scope for this Proposal
|
||
==============================
|
||
|
||
* How to do 1 person = 1 vote (and perhaps we cannot or should not do this).
|
||
* How to structure the Strategic Council legally, i.e. should it be a Swiss
|
||
Foundation and what sorts of legally binding responsibilities do the
|
||
Strategic Council members have?
|
||
|
||
|
||
Motivation and Requirements
|
||
===========================
|
||
|
||
This is an attempt to put on my startup CEO hat and address the strategic and
|
||
execution challenges I believe have held back Zcash from realizing its full
|
||
potential.
|
||
|
||
**Principles & Observations Based on My Experiences (a.k.a. Biases?)**
|
||
|
||
Because layer 1 protocols are network-effect driven, without a quickly growing
|
||
network-effect in miners, developers, users, and liquidity, a layer 1 protocol
|
||
will ultimately collapse.
|
||
|
||
The primary driver of success in a network-effect business is how quickly you
|
||
grow the network effects.
|
||
|
||
To grow a network effect, you must have both the correct strategy and
|
||
excellent execution. If your strategy is not correct, no matter how well you
|
||
execute, you will fail. If your execution is not excellent, you will not be
|
||
able to assess whether lack of progress is due to poor execution or poor
|
||
strategy.
|
||
|
||
Thus, to build the network effects Zcash needs to succeed, we must answer five
|
||
questions:
|
||
|
||
1. Who determines the strategy?
|
||
2. How do they decide on the strategy?
|
||
3. How are they held accountable to having the correct strategy?
|
||
4. Who executes?
|
||
5. How are Executors held accountable to excellent execution?
|
||
|
||
*1. Who determines the strategy?*
|
||
|
||
* Volunteer-based approaches require the ability for individuals or entities
|
||
to accumulate significant quantities of the underlying coin. Bitcoin did
|
||
this through obscurity and Grin is accomplishing this through extremely
|
||
high inflation in the early years. Zcash has moved beyond this phase and
|
||
thus I do not believe a volunteer-based approach could be effective. Thus,
|
||
a developer fund (or similar approach) is the only realistic option for
|
||
Zcash today.
|
||
* Independent, high-quality governance enables better decisions and higher
|
||
quality execution.
|
||
* We should ideally have the recipients of the funds be different entities
|
||
than the governance body that allocates funds to avoid conflicts.
|
||
* Too few people in a decision-making process and people can collude. Too
|
||
many and nothing gets done.
|
||
* Good governance and leadership is a significant time commitment and requires
|
||
significant support/resources.
|
||
* There are a variety of perspectives that should be represented, including
|
||
miners, developers, regulators, and users.
|
||
|
||
*2. How do they decide on the strategy?*
|
||
|
||
* Flexibility in how funds are used is important. Strategies and markets
|
||
change over time and we should be able to evolve. Thus, we should not
|
||
constrain how funds are used up front.
|
||
* There should be no constraint to using all of the funds in any given time
|
||
frame.
|
||
* Creating and fostering decentralized ecosystem of miners and developers is
|
||
important for the long-term health of the ecosystem.
|
||
* A regular and predictable cadence in planning and goal setting makes it
|
||
easy for teams to build, ship, and recharge between intense periods of
|
||
building.
|
||
* Transparency in the strategy, decision making of fund recipients, and how
|
||
funds are distributed is paramount.
|
||
|
||
*3. How are they held accountable to having the correct strategy?*
|
||
|
||
* No organization or individual should have a permanent seat on a
|
||
decision-making body. Regular elections enforce good behavior.
|
||
* Third-party audits of financial behavior enforce good behavior and create
|
||
transparency.
|
||
* Bad actors should be able to be removed from any decision-making body for
|
||
egregious violations of trust or misbehavior.
|
||
|
||
*4. Who executes?*
|
||
|
||
* Anyone should be able to participate in the execution.
|
||
* Over time the best executors should have reputation accrue and be able to
|
||
receive more funds.
|
||
* There is value in having Executors distributed across geographies and
|
||
across entities.
|
||
* There is value in identifying Executors who have long-term commitments to
|
||
Zcash and will be available for long-term support and maintenance of their
|
||
work.
|
||
|
||
*5. How are Executors held accountable to excellent execution?*
|
||
|
||
* Excellent execution comes from having verifiable hypotheses, backed up
|
||
with data, and clear milestones.
|
||
* Executors need to submit concrete plans, with clear goals and metrics, and
|
||
be judged according to both whether or not the goals were reasonable and
|
||
whether they accomplished those goals (ideally in a measurable way using
|
||
metrics).
|
||
* Execution is best measured by pre-defining success and failure criteria,
|
||
prior to having been influenced by the challenges of the task at hand.
|
||
|
||
|
||
Specification
|
||
=============
|
||
|
||
*1. Who determines strategy?*
|
||
|
||
* A five-person/entity board -- Five people is better than three to minimize
|
||
collusion.
|
||
* Strategic Council should get two-year term so we can pivot people in the
|
||
middle if necessary. No permanent seats.
|
||
* For the purposes of voting to determine seats (not having seats vote on
|
||
issues): one of the five seats should be allocated for miners and signaled
|
||
through nodes. One of the five should be weighted by ZEC holding so
|
||
1 ZEC = 1 vote. Three of the five should be 1 person = 1 vote.
|
||
* Elections should be open such that any person or entity can run for a seat.
|
||
* The board is a paid position from Dev Fund emissions. Compensation TBD.
|
||
|
||
*2. How do they decide?*
|
||
|
||
* 20% of block rewards are allocated for the Developer Fund.
|
||
* There should not be any limit up front on where money can go. Perhaps one
|
||
year it makes sense to invest entirely in protocol and another year it
|
||
makes sense to invest in user adoption via content marketing, SEO, SEM,
|
||
etc.
|
||
* Every six months, the board has a responsibility to publish an update to
|
||
the strategy, key metrics that are being tracked, and key metrics to hit
|
||
as goals in the next six months. This will require feedback from the
|
||
community but ultimately the board needs to decide on and own the strategy.
|
||
* Every six months, the board runs a process whereby anyone can submit
|
||
proposals for how they would best accomplish these strategic objectives
|
||
and hit those metrics and milestones.
|
||
* No more than 33% of funds can go to one entity for development purposes.
|
||
This enforces broad decentralization and encourages the ecosystem to
|
||
identify new participants.
|
||
|
||
*How are they held accountable for having the correct strategy?*
|
||
|
||
* Elections every two years from the community.
|
||
* All decisions and finances are audited by a third-party audit firm.
|
||
* There is an annual meeting of all stakeholders (perhaps at Zcon?) for
|
||
feedback, Q and A of the board, and a walk through of what has been
|
||
accomplished in the last six months and what the proposals are for the
|
||
next six months for feedback. The other six-month cadence meeting for
|
||
the Strategic Council to present its plans and receive feedback can be
|
||
virtual.
|
||
|
||
*4. Who executes?*
|
||
|
||
* Individuals, teams, or companies from anywhere can submit a proposal that
|
||
aligns with the strategy (or doesn’t), a budget for what they want to do,
|
||
and their success criteria on a scale of 1-10 (see below).
|
||
* Executing Entities can submit plans that may take longer than 6 months
|
||
to complete as the reality of hiring and funding employees may dictate
|
||
longer term financing commitment. The Strategic Committee should have
|
||
discretion to allow for these sorts of investments but should require
|
||
intermediate milestones and grading on the 6-month time horizon as well.
|
||
* Companies that have sustainable business models and can support or
|
||
subsidize engineers to work on Zcash or that have adjacent businesses
|
||
that would benefit from investment in this technology should be encouraged
|
||
to participate, i.e. the way Square is supporting Bitcoin we should have
|
||
companies supporting Zcash.
|
||
* Ideally the board also encourages non-technical execution such as education,
|
||
video series, regulatory progress, etc.
|
||
|
||
*5. How are they held accountable to excellent execution?*
|
||
|
||
* At the end of six months all proposals are graded 1-10. Each team would
|
||
pre-agree to what would would result in a 0, 3, 7, 10/10 and then they
|
||
can move it up or down a little once results are due in 6 months. If they
|
||
pre-agreed to some definition of results that is a 3 and then tried to
|
||
give themselves an 8, it would look fishy and could impact future funding.
|
||
* The Strategic Council should target an average score of 7/10 for that
|
||
six months across all Executors. If we score too high, we are not being
|
||
ambitious enough in our goals. If we score too low, we were trying to do
|
||
too much or had a fundamental misunderstanding of our goals.
|
||
* Over time the Strategic Council decides who gets funds so under-performers
|
||
will be culled. Thus Executors are held accountable by the board and the
|
||
board is held accountable by the community.
|
||
|
||
Issues & Further Discussion
|
||
===========================
|
||
|
||
*Raised objections, issues, and open questions:*
|
||
|
||
* How might we create a process to amending this process? We may want 4/5
|
||
of the Strategic Council to approve changes or 2/3 of ZEC holders to be
|
||
able to amend the Strategic Council’s charter.
|
||
* How do we recall or impeach the members of the Strategic Committee prior
|
||
to the end of their term if necessary?
|
||
* I’m sure there are many other points of ambiguity and improvements we
|
||
could make. There may even be critical design flaws or failures in this
|
||
system. Feedback is appreciated.
|
||
|
||
References / Background
|
||
=======================
|
||
|
||
.. role:: editor-note
|
||
|
||
* https://www.zfnd.org/blog/multisig-governance/
|
||
* https://forum.zcashcommunity.com/t/placeholder-considerations-resources-governance-and-legitimacy-in-nu4/34045
|
||
* https://electriccoin.co/blog/ecc-initial-assessment-of-community-proposals/
|
||
* https://medium.com/@socrates1024/here-are-a-couple-of-points-on-framing-the-discussion-of-a-potential-new-dev-fund-in-zcash-c13bcbf4ed5b
|
||
* https://forum.grin.mw/t/solved-early-disappointments/3682
|
||
* https://www.electriccapital.com/ (for disclosure of investments we’ve made).
|
||
|
||
:editor-note:`these should be made into inline references.`
|
||
|
||
Change Log
|
||
==========
|
||
|
||
* 2019-08-27 Initial draft - thanks to @jubos, @puntium, @zooko, @joshs, and
|
||
Jack Gavigan for helping me more clearly articulating my ideas and helping
|
||
get them formatted properly for a ZIP. These ideas are solely mine and were
|
||
not influenced by any of these individuals.
|
||
* 2019-08-28 Updated to be in ZIP format.
|
||
* 2019-09-15 Finally turned in to a pull request on GitHub and incorporated
|
||
feedback from @daira and @str4d.
|