Polling ZCAP on the Design of a Proposal for a new Dev Fund

Since the first November 2020, 20% of Zcash mining rewards has been allocated to a Dev Fund, which is distributed to the Electric Coin Company (ECC), the Zcash Foundation (ZF), and the Zcash Community Grants program (ZCG). 

The current Dev Fund will end when the next Zcash halving occurs in November 2024. If a new Dev Fund is to activate when the current one expires, the Zcash community must reach consensus within the next few months, so that the new Dev Fund can be designed and codified in the Zcash protocol, and deployed in the Zcashd and Zebra node implementations. 

The question that the Zcash community faces is this: What should happen when the current Dev Fund expires in November 2024? 

A range of ideas have been put forward, including allowing the Dev Fund to expire without any extension or replacement, directing a new Dev Fund into a “lockbox” to hold the funds until a new funding and governance model can be put in place, and several community members have put forward proposals for new Dev Funds (or an extension of the current Dev Fund).

Based on community feedback, the Zcash Foundation (ZF) has decided to conduct a series of exploratory opinion polls of ZCAP members, to assess the community’s sentiment regarding a potential future Dev Fund, with a view to drafting a formal proposal based on that feedback. 

To be clear: the purpose of this poll is not to reach a formal decision regarding what should happen in November. 

Instead, this poll is intended to solicit feedback from the community that ZF will then use to draft a proposal that can be evaluated and discussed alongside other proposals. 

With limited time available to design and implement a new Dev Fund before November, we will base the proposal on the existing “funding streams” model, whereby a percentage of Zcash mining rewards is allocated to a Dev Fund which is then distributed amongst a number of recipients.

The initial scope is based on several proposals for new Dev Funds that have already been put forward by members of the Zcash community, and have been discussed on the Zcash community forum. 

We expect that it will require several polls to narrow a wide set of options down, and we hope that the end result will be a set of specific choices that attract broad support from across the Zcash community. 

Our priority is to ensure that the Zcash community has a voice in what happens come November, and our goal is to help the community reach consensus. 

It may be that consensus cannot be reached, in which case there will be no new Dev Fund in November. As we have stated previously, if the Zcash community decides that the Dev Fund should end and not be replaced (or that it should be replaced but that ZF should not receive any funding), ZF will support that decision. 

It may also be that the community reaches consensus on adopting a different approach, such as ECC’s proposed extension of the current Dev Fund, or Skylar’s proposed “lockbox”. Again, ZF will support the community’s decision. 

In the first poll, we are asking the following questions, and provide the following response options. 

Q1: Should a new Dev Fund be put in place when the current Dev Fund ends in November 2024?

  • Yes
  • No

In this question, “a new Dev Fund” means a Dev Fund that follows the existing Dev Fund’s “funding streams” model, whereby a portion of the mining reward goes directly to organizations such as ZF and the Bootstrap Project (the parent of the Electric Coin Company) to either fund their own operations or for redistribution to another organization (as with Bootstrap and ECC) or program (as with ZF and ZCG). 

However, the percentage of the block reward allocated to the new Dev Fund, the recipients, and how the new Dev Fund is split between those recipients may be different. 

You should answer “Yes” if you believe that any of the organizations or programs listed under Q4 below should be funded from a new Dev Fund from November 2024. 

You should answer “No” if you believe that none of the organizations or programs listed under Q4 below should be funded from a new Dev Fund from November 2024. 

Q2: If there is to be a new Dev Fund, should its recipients’ allocations reduce over time, with the balance allocated to an Unissued Reserve, as proposed by GGuy?

  • Yes 
  • No, recipients’ allocation should remain constant for the duration of the new Dev Fund. 

GGuy has suggested that the amount allocated to each Dev Fund recipient should follow a declining schedule, with the surplus funds allocated to an Unissued Reserve, that can only be issued through community consensus. More information can be found here

Q3: If there is to be a new Dev Fund, how long should it last?

  • 1 year
  • 18 months
  • 2 years
  • 3 years
  • 4 years

If a new Dev Fund is to start in November, it must be specified with a default duration. This does not mean that the new Dev Fund will necessarily last for its full duration – the community may opt to change it, end it early or replace it with a new Dev Fund of an entirely different design.

Q4: Which organizations and programs should receive funding from a new Dev Fund?

Respondents can select up to seven options in response to this question.

Please note that Bootstrap/ECC have stated that they will not receive funding directly from the chain except in the case of a one-year extension with a clear mandate to move to a non-direct funding model. 

Receipt of a Dev Fund slice is voluntary, and any of the organizations listed may request that they not be considered as a potential recipient (as Shielded Labs have already done). If that happens, that organization will not be included in any draft proposal that emerges from this process. 

The Legal Defense Fund option reflects a suggestion that a portion of any new Dev Fund should be allocated to fund legal action to challenge any regulatory action or legislation that negatively impacts the overall Zcash project.

This first poll is now open for ZCAP members to vote, and will close at 09:00 UTC on 12th June 2024.

Future polls will solicit input on questions such as what percentage of coin issuance should be allocated to a new Dev Fund, and how the Dev Fund should be distributed amongst the recipients.

As stated above, the objective of this process is to obtain sufficient insight into the Zcash community’s collective sentiment to draft a Dev Fund proposal that reflects that sentiment, and can be assessed alongside other proposals from the community. We expect that there will be a final run-off poll to determine whether any proposal has consensus support across the Zcash community. 

As always, we welcome the community’s feedback. If you have comments or suggestions, please join the conversation on the Zcash community forum