rewrite this title ECC Endorsement for the Community and Coinholder Funding Model

Last year, the Zcash community allocated 8% of block rewards to ZCG and 12% to a one-year deferred lockbox to explore future funding options. With the expiration nearing, it’s time for the community to decide the path forward. Polling will begin this week. 

ECC endorses the Community and Coinholder Funding Model (C&C). As described in the proposal abstract, this model “gives the community and coin holders distinct voices in determining what, if any, grants are provided to support Zcash’s development and community efforts.”

We support this model for the following reasons:

Outcome-driven: This proposal is consistent with our position that anyone who receives funding from block rewards should be held accountable to the community for outcomes. 

Empowers Coinholders: Coinholders have not historically had the power to determine how block rewards are allocated. This model gives them the authority of 60 percent of the development fund.

Balanced and Agile: This model keeps the Zcash Community Grants (ZCG) function in place and at the same funding level it currently receives. This allows the community to elect representatives to the ZCG, and provides a more agile and alternative means for contributors to apply for grants. 

Legally Compliant: ECC consulted with its attorneys to assess legal and compliance risks. This model is consistent with similar models used in other ecosystems and demonstrates further decentralization of decision-making authority. 

Transparent Governance: The process for allocating funds is straightforward, with formal ratifying of coinholder decisions through a multi-organization multi-sig.

Term-Limited: The model would be activated through the third halving, approximately November 2028. This allows the community sufficient time to assess the model’s effectiveness before determining whether it should expire, be modified, or be replaced.

Strong Controls: The C&C model includes a veto process that allows key holders to withhold funds in cases where the funding would violate the law or be deemed antithetical to the values of the Zcash community. It is also limited to funding governance and does not imply control of what code is merged and run by the ecosystem.

Implementable by November: The ECC team has determined that the model can be implemented ahead of the November expiration date, with minimal impact on the current work on zcashd deprecation and ZSA enablement. It will require a network upgrade before or in concert with what is currently defined as NU7.

Collaborative: The model was developed with input from ECC, the Zcash Foundation, Shielded Labs, forum members, and long-term ZEC holders. 

While ECC is formally endorsing this proposal, individual ECC team members may express different views online or in polling. We remain steadfastly committed to further Zcash decentralization, increased coinholder participation, transparency, and accountability, and we look forward to hearing the community’s voice through polling.