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    <title>ZIP 1005: Zcash Community Funding System</title>
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        <pre>ZIP: 1005
Title: Zcash Community Funding System
Owners: Dimitris Apostolou &lt;dimitris.apostolou@icloud.com&gt;
Status: Obsolete
Category: Consensus Process
Created: 2019-06-23
License: MIT
Discussions-To: &lt;<a href="https://forum.zcashcommunity.com/t/zip-proposal-zcfs-zcash-community-funding-system/33898">https://forum.zcashcommunity.com/t/zip-proposal-zcfs-zcash-community-funding-system/33898</a>&gt;</pre>
        <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>
            <p>This proposal introduces a new funding mechanism called the Zcash Community Funding System (ZCFS).</p>
        </section>
        <section id="motivation"><h2><span class="section-heading">Motivation</span><span class="section-anchor"> <a rel="bookmark" href="#motivation"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>The motivations for ZCFS are:</p>
            <ul>
                <li>The Founders’ Reward is set to expire in 2020.</li>
                <li>The Founders’ Reward has caused significant friction in the Zcash community and sparked forks due to disagreement with its very existence.</li>
                <li>There needs to be a more fair and decentralized funding mechanism.</li>
            </ul>
        </section>
        <section id="specification"><h2><span class="section-heading">Specification</span><span class="section-anchor"> <a rel="bookmark" href="#specification"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>This specification is a modification of the Monero Community Crowdfunding System (CCS) and is defined as follows:</p>
            <ol type="1">
                <li>The Founders’ Reward ends in October 2020 as specified by the current consensus rules.</li>
                <li>An individual, team or company (for-profit or non-profit), henceforth ‘proposer’, has an idea to improve the Zcash ecosystem that requires funds.</li>
                <li>The proposer creates a ZCFS proposal in a modified version of the existing <a href="https://www.zfnd.org/grants/">ZF Grants website</a>, to be called the ZCFS website. The ZF Grants website already has the basic infrastructure for this mechanism and needs to be tweaked in order to facilitate this specification. The ZF Grants website will continue to operate in its current form.</li>
                <li>Upon activation of this proposal, the Zcash Foundation is put in charge of the ZCFS.</li>
                <li>The Zcash Foundation is required to make ZCFS proposals for its own funding. If the community decides not to fund it, then the ownership of the ZCFS is transferred to the proposer who is instead funded by the community for that matter. <span class="editor-note">the meaning of "the proposer" here is unclear.</span></li>
                <li>After a ZCFS proposal has been created, the community discusses the pros and cons of the proposal, and offers feedback and critique.</li>
                <li>The proposer changes the proposal (if necessary), utilizing the feedback and critique of the community.</li>
                <li>Repeat steps 6 and 7 as needed.</li>
                <li>After the Zcash Foundation (or whoever has ownership of the ZCFS at the time) has determined that the community has reached loose consensus, the funding begins by ZEC holders who wish to donate.</li>
                <li>Once fully funded (not guaranteed), the proposer begins on the work, if they haven’t already.</li>
                <li>Milestones are completed and funds are disbursed upon their completion.</li>
                <li>After all milestones are completed, the proposal is locked and all information is retained for posterity.</li>
            </ol>
        </section>
        <section id="rules-and-expectations"><h2><span class="section-heading">Rules and Expectations</span><span class="section-anchor"> <a rel="bookmark" href="#rules-and-expectations"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>The ZCFS is intentionally left as informal as possible. This allows for flexibility of the system, and keeps things from being red-taped into oblivion. However, there are some things you should understand, things that will be expected of you, as either a proposer or a donor, and a recommended way of structuring a proposal for maximum likelihood that your project will be funded.</p>
            <section id="for-donors"><h3><span class="section-heading">For Donors</span><span class="section-anchor"> <a rel="bookmark" href="#for-donors"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h3>
                <ol type="1">
                    <li>The ZCFS is escrowed by the Zcash Foundation (or whoever has ownership of the ZCFS at the time). When you make a donation, you are releasing funds to them to disburse when they deem the community agrees that a milestone is complete. They do not do the work to verify donors, and the final decision for all disputes falls with them, although they do their best to follow community sentiment.</li>
                    <li>In the event that a proposal is overfunded, unable to be completed, or otherwise put in a state where donated money will not be disbursed to the proposer, the default is that the remaining ZEC will be put in the ZF Grants fund.</li>
                    <li>Refunds are extraordinarily rare. Donate accordingly.</li>
                    <li>If the proposer disappears, no problem, someone else can pick up from their last milestone.</li>
                    <li>Milestone and payout structures vary per proposal based on the proposer’s wishes. It is up to the donor to do their due diligence in whether or not they support the proposal in its entirety.</li>
                </ol>
            </section>
            <section id="for-proposers"><h3><span class="section-heading">For Proposers</span><span class="section-anchor"> <a rel="bookmark" href="#for-proposers"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h3>
                <ol type="1">
                    <li>There is no guarantee that your project will get past the community feedback stage, and if it does, there is no guarantee that it will be funded.</li>
                    <li>You have to drum up support for your proposal during the feedback and funding stages. Do not expect others (especially the Zcash Foundation or other trusted members of the community) to do it for you. Others may share and support if they are excited about your project, but ultimately it is nobody’s responsibility but your own.</li>
                    <li>It is expected that you provide updates on the progress of your proposal to the community. For every milestone completed there should be a written report put into your ZCFS proposal announcing its completion and the work done, but depending on the timeline of your project, it may be wise to update the community more frequently.</li>
                    <li>All work must be licensed permissively at all stages of the proposal. There is no time where your work can be licensed under a restrictive license (even as you’re working on it). Your proposal will be terminated if this is not remedied.</li>
                    <li>You may NOT under any circumstances include a donation address directly in your proposal. This circumvents the ZCFS, and can lead to scams.</li>
                    <li>Your work on the project can begin before the proposal is fully funded but disbursement of funds is done only upon completion of milestones and only if the proposal is fully funded.</li>
                </ol>
            </section>
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