Zcoin Governance and Development past 4 years

What are some thoughts on structures like these?

So they have Dash Core Group (DCG), is a c-corporation, business etc. So it’s for profit.

Then they have a Dash DAO Irrevocable Trust
The Trust is in favour of the Dash masternode holders.

Dash Trust owns 100% of DCG and therefore controls its board of directors.

So basically the Trust represents the masternode holders and can change management of the DCG while retaining its talent, coders etc

The more I read and research, the stronger I feel against on-chain governance.

The following will be controversial so I hope community members can weigh in on this. This is more of a brain blurb rather than a concrete proposal but wanted to put it down here.

If masternodes vote, it will be whales dictating how funds are allocated, making it fake governance though arguably they are the ones that will act the most rational given their large stakes and more likely to be long term holders.
Miners in an ASIC resistant type of algorithm, are fickle and do not have any loyalty since there is no incentive locking them in. This is the cost of commodity hardware mining.
Zcoin holders you would think would make sense but then again as they can both buy and sell coins in the short term, they can be minded to vote in short term pump strategies that hurt us in the long run.

As much ‘democracy’ is seen as a ‘universal good’, it really isn’t and as we are seeing increasingly in this world today, is often turns to mob rule and governments winning due to populist policies (even if not the best way to do things).

The video below illustrates this.

I also am not sure how prudent it is to leave every decision to the community and more in favour of having an executive being voted in and out of fixed terms similarly to a company structure so that if an executive doesn’t carry out his duties well, he will be held accountable and removed. Transparency reports of course have to be given and some checks and balances in place.

One of Poramin’s concerns is the risk of having a more ‘executive structure’ is that it forms a target to shut down or to be forced to insert backdoors. This is partially off set by the fact that all our work is open sourced but it is a valid risk if we believe Zcoin to become a leading cryptocurrency. This is also why we don’t really have a CEO due to Poramin’s views on this.

Yet the crypto community has often idealism in having decentralized funding when in reality, this type of funding model often opens itself to outside influence or will result in poor incentives for it to be worked on. For e.g. how decentralized is Bitcoin’s development? What do you think of Grin’s pure model that lead to it being contingent on donations?

I’m still in favour of funding development from the block reward since I think it is honest and aligns incentives in the right way as long as there is accountability. How to achieve this accountability with governance is the true question and whether it will be done on-chain or through other structures such as having an independently appointed foundation separate from the development and executive portions.

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I’ll be the devils advocate here and argue for master node voting. Similar to Dash.

They have a lot of zcoin invested, therefore they have the most to lose if bad decisions are made. Yes, “whales” will be the decision makers, but they have invested their own hard earned money into this project, so they have earned the right to vote in my opinion.

I would be okay if this if not for the founders having kept many of their rewards (which is good) but bad for masternode governance.

Note that they got their founder’s wallet for a lot less for their seed investment.

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Hi Reuben:

I’m glad you’re struggling with the governance issue … that means you’re taking it seriously.
It’s a very complex situation and needs to be resolved properly … and it’s not clear to most of us how it should be setup.
Personally I think decisions need to be made by a team that is either appointed and/or voted into their positions - and they need to be accountable for their decisions,
but at the same time have public voting on all major issues with full disclosure of voting results, and an explanation of the decisions the team makes based on the votes.
In theory, the team can know much more about some issues than anyone else, and may decide to go with less-than-popular options on some issues, because of strategic or security concerns that may influence decisions and may not be able to come to light until after implementation of some features
(the great handling of the ‘coins-from-thin-air’ hack is one good example - quick resolution - then public announcement later).
If people are not happy with decisions being made by the team, then there would need to be a process in place to vote on who is on the team, and they can be voted out at an appropriate time.
It’s still not clear to me how to setup the voting process for the team or the major issues - it wouldn’t necessarily need to be block-chain based.
While Quadratic Voting looks very intriguing, it could end up being too complex, and could let bigger fish have even more influence on a vote than using other methods.
Registering to vote likely wouldn’t sit too well for people owning a privacy coin (including myself) so another method needs to be found.
Using voting tokens may be possible (like an air-drop) - but that may get complex and messy - and doesn’t fix the big fish issues.
Maybe something like one-wallet-one-vote (with wallets needing a minimum balance of - say - 500 xzc to be eligible to vote)

  • and it would be based on minimum balance for the voting period - this would prevent people from moving Zcoins from one wallet to another to get more votes.
  • not sure how that would work for people with Zcoins in exchanges, or Coinomi, or other non-Zcoin-core wallets,
    or people trying to influence voting by setting up more wallets just to vote … not clear how to fix that …
    Allowing Znodes to vote as well as wallet holders would be double-counting since the wallets already contain the 1000 xzc.

I think the best way may be one-Zcoin-one-vote. Each person who owns Zcoin in a wallet casts a vote pro-rated based on their percentage of the total circulating supply.
Say - 1000 xzc which would be 1000/7,640,000 = 0.01309% of the total vote - but again - the big fish issues aren’t solved (and maybe can’t or maybe shouldn’t be?) … not sure.
If there are concerns about the founder’s rewards being in a different class (and maybe they shouldn’t be allowed to vote?) what can be done to make it fair to the rest of us who have worked hard either mining our coins or buying or trading other coins for Zcoins?
Can the wallets of the founders be excluded from voting (or given a different weight in the vote), or do they just transfer their coins to new wallets to get around the voting issues?
… again … not sure…
If the final say goes to the team (who will be held accountable) maybe the voting doesn’t need to be as strict, and a one-Zcoin-one-vote approach would work well enough

  • possibly with break-out stats for votes by groups (Znode holders, general wallet holders, founder’s wallets, etc.).

Just some thoughts … hope it helps …

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Really nice post Zed!

So speaking to a lawyer and the recent classification of securities there are some major issues that we need to consider.Giving voting rights to zcoin holders to allocate funds can be deemed as creating a ‘common enterprise’ and centralizing the efforts to increase the value of Zcoin and be deemed a security. It is effectively directing capital to rely on the effort of others. This gives a problem to projects like Dash or Decred and in fact Decred was taken off Poloniex’s US site.

I’m still trying to think of how we can get around this.

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Is there a legal distinction between voting and polling? … I’d be fine with the team asking for input with just a poll, and then being held accountable for the decisions they make.

yes polling is merely indication of interest while voting has binding consequences.

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If we give a % of rewards to the developers. Are you guys also going to be responsible for everything in development of zcoin?
I’m talking about not just marketing and developer salary. For example dash community has their news team, Venezuela team, YouTube team. All done by the community based on proposals and votes of course. I think dev team will have their hands tied with developing and marketing. We need more community involvement and involvements needs to be funded.
Maybe we can dedicate a % to dev fund but also a voting mechanism for other developments. If voting per se is bad for legal reasons, then let’s pick another way to obtain consensus like polling. Or sending a small amount of zcoin to polling address.
Zcoin is not a nation so don’t really need a over complex governing system.

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That’s an excellent point. I think one way is to have a community fund where we contribute some of our spare dev fund to a public address and people can apply to utilize it for grants.

On a side note, I was thinking if we were to have a development fund of 10% of block reward (which should be less than what we get now since it’s 6% of pre halving figure), until Dec 2021 while we decide the best way to do this.

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55/30/15. No dev funds means no future

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It sounds good, but the state is ahead of you) This is a tax, though in your explanation there are mostly pluses, but there are none in the tax at all …

Yes, a tax is a theft of the state of the people, no more …

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I think that one zcoin one vote is a good idea. Let us say we set up a central development fund in zcoin. The fund is is made up of block reward (2% from each block) and user contributions. Users can contribute to discussions by sending a zcoin attached with a message to a specified address. All the messages will be collected onto a noticeboard moderated by a bot to prevent spam. The more the user contributes, the more zcoin they need to spend, and the bigger the development fund is. The user also gain more reputation points by participating in the discussion. Only those users making at least one post is able to vote. During the voting day, the weightage of their vote is higher because they contributed more to the discussion.

Therefore, we have avoided the problem of democracy where lobbying and vote buying tactics can have an upper hand due to lack of voters education, and also avoiding the big holders such as whales, miners, and znode holders from influencing the decision making process. This also makes disincentivize people to create multiple addresses to rig the voting process because with one account with good reputation is better than multiple newly created accounts that only have one post. It is because an address with two posts will have two reputation points to vote, while an address with one post only have one reputation point to vote. Therefore, it is a waste of time to create new accounts.

The noticeboard should have an automated feature to summarise the main points in a discussion so that new participating users will immediately know what are points and questions raised without going through each and every messages. A moderator or an automated programme can be used to do the fact checking with citations so that everyone can make sure a statement is a fact, rather than a rumour. Therefore, this will maximise the chances that every voter is making an informed decision.

Just my 2 cents. Any opinions are welcomed! :slight_smile:

Yes, but for the state this is a huge income, although we pay to our state and not to someone, and this is the only plus.

Hello bro…
Any progress ?..

Yup i’m posting something soon :smiley:

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This is still an ongoing discussion which doesn’t seem that easy to solve.

Eth has been talking about quadratic voting but as it requires identity it’s a bit of an issue with privacy coins.

Masternode voting is totally messed.

For the moment, I am of the opinion that we should maintain the status quo for another 1 or 2 years while we explore how effective other more informal governance works for e.g. the ZCS, open community discussions and transparency as detailed in my post above. Especially if we are having a development reward still (which is what we are trending towards), this makes sense.