zip-1013.html

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    <title>ZIP 1013: Keep It Simple, Zcashers: 10% to ECC, 10% to ZF</title>
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        <pre>ZIP: 1013
Title: Keep It Simple, Zcashers: 10% to ECC, 10% to ZF
Owners: Gordon Mohr (@gojomo on relevant forums)
Status: Obsolete
Category: Consensus Process
Created: 2019-11-14
License: Public Domain
Discussions-To: &lt;<a href="https://forum.zcashcommunity.com/t/zip-keep-it-simple-zcashers-kisz-10-to-ecc-10-to-zfnd/35425">https://forum.zcashcommunity.com/t/zip-keep-it-simple-zcashers-kisz-10-to-ecc-10-to-zfnd/35425</a>&gt;
Pull-Request: &lt;<a href="https://github.com/zcash/zips/pull/293">https://github.com/zcash/zips/pull/293</a>&gt;</pre>
        <section id="terminology"><h2><span class="section-heading">Terminology</span><span class="section-anchor"> <a rel="bookmark" href="#terminology"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>The key words "MUST" and "SHOULD" in this document are to be interpreted as described in RFC 2119. <a id="footnote-reference-1" class="footnote_reference" href="#rfc2119">1</a></p>
            <p>The terms below are to be interpreted as follows:</p>
            <dl>
                <dt>ECC</dt>
                <dd>Electric Coin Company, a US-based limited-liability corporation.</dd>
                <dt>ZF</dt>
                <dd>Zcash Foundation, a US-based non-profit corporation.</dd>
                <dt>Halvening</dt>
                <dd>a regularly-scheduled discontinuity where the rate of ZEC issuance halves, expected first in roughly October 2020 then next in roughly October 2024.</dd>
            </dl>
        </section>
        <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 ZIP proposes:</p>
            <p>After the 1st Zcash Halvening, when the "Founders’ Reward" system- bootstrapping protocol-based development funding expires, continue to direct 20% of new ZEC issuance to development-related activities for ongoing research, development, innovation, and maintenance of Zcash.</p>
            <p>Assign half of such funds to the ECC, and half to the ZF. Continue this allocation until the 2nd Halvening.</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>There have been many proposals for potential allocations of Zcash block rewards (ZEC inflation) after the 1st Halvening. Many cluster around similar broad parameters:</p>
            <ul>
                <li>20% of block rewards for continuing development efforts;</li>
                <li>provided to some combination of the Electric Coin Company (ECC), Zcash Foundation (ZF), and other named or to-be-determined entities;</li>
                <li>conditioned on certain new allocation formulas or management practices, often involving novel entities, personnel, and feedback/deliberation processes.</li>
            </ul>
            <p>However, no existing ZIPs explicitly propose the most simple variation on this theme - one that maintains maximal continuity with prior practice. This 'Keep It Simple, Zcashers' ZIP aims to fill that gap.</p>
        </section>
        <section id="requirements"><h2><span class="section-heading">Requirements</span><span class="section-anchor"> <a rel="bookmark" href="#requirements"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>This proposal intends to be easy to describe, understand, and implement.</p>
        </section>
        <section id="non-requirements"><h2><span class="section-heading">Non-requirements</span><span class="section-anchor"> <a rel="bookmark" href="#non-requirements"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>This proposal does not seek to propose any particular course of action past the 2nd Halvening.</p>
        </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>To implement this ZIP, the Zcash protocol and compatible software MUST:</p>
            <ul>
                <li>maintain a 20% allotment of new ZEC issuance to development activities through to the 2nd Halvening event (expected around October 2024);</li>
                <li>formalize a 50-50 relative allocation between the ECC and ZF;</li>
                <li>deliver these ZEC to addresses provided by the recipients, in a manner analogous to the original "Founders’ Reward" consensus-encoded block rewards, or any other technically- and/or legally- preferred method agreed to by the ECC &amp; ZF.</li>
            </ul>
            <p>This proposal specifically refrains from adding any new conditions or procedural formalities, technical or legal, on the delivery of development funds.</p>
            <p>There is only the expectation that these recipients SHOULD continue the stated missions, practices of transparency, and responsiveness to community input that they have demonstrated thus far.</p>
        </section>
        <section id="discussion"><h2><span class="section-heading">Discussion</span><span class="section-anchor"> <a rel="bookmark" href="#discussion"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <p>This proposal primarily differs from similar proposals in two ways: (1) it places no new comditions/processes on the disbursement of ZEC development funds; (2) it specifies a fixed, 50-50 division-of-funds between the ECC and ZF.</p>
            <p>These differences are motivated by a desire for simplicity and continuity. This allocation can be implemented technically without novel institutions, processes, or legal agreements.</p>
            <p>Rather than relying on lists-of-conditions with underspecified enforcement or dispute-resolution mechanisms, the adequate performance of fund recipients is expected due to:</p>
            <ul>
                <li>aligned incentives, especially the fact that the value of all funds received over 4 years depends completely on the continued health &amp; growth of the Zcash ecosystem;</li>
                <li>proven records of dedication to the Zcash project, and effective efforts on related projects, by receipient entities &amp; personnel – even in the absence of formalized funding conditions.</li>
            </ul>
            <p>From original "Founders’ Reward"-era development-funds, roughly 15% has been directed to the ZF. (Or, about 3 points of the full 20 points of bootstrap- funds.) However, from its later start, the ZF has recently grown its technical, grantmaking, and organizational capabilities, and wide sentiment in the Zcash community, ECC, and ZF desires the ZF grow to a role of equivalent or greater importance as the ECC for long-term Zcash evolution. Thus this proposal specifies a 50:50 split of future development funds, rather than continuing any prior proportions.</p>
        </section>
        <section id="references"><h2><span class="section-heading">References</span><span class="section-anchor"> <a rel="bookmark" href="#references"><img width="24" height="24" class="section-anchor" src="assets/images/section-anchor.png" alt=""></a></span></h2>
            <table id="rfc2119" class="footnote">
                <tbody>
                    <tr>
                        <th>1</th>
                        <td><a href="https://www.rfc-editor.org/rfc/rfc2119.html">RFC 2119: Key words for use in RFCs to Indicate Requirement Levels</a></td>
                    </tr>
                </tbody>
            </table>
        </section>
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