TF should not be concerned about their holdings being diluted, only DLS’s stake which they are responsible for custodying until vesting is complete.
TF’s primary goal should be to steward the network towards complete decentralization, and a growing balance sheet of XTZ is the exact OPPOSITE of that. They have an absolutely insane amount of financial resources at their disposal. They don’t need to grow their stake against the network.
Doubtful that we’ll see TF be proactive about anything resembling this idea, perhaps the next protocol upgrade should entertain the idea of “blacklisting” one TF baker as an initial step towards network decentralization.
I am a Public Baker and have been Baking for Delegates since the initial days of Tezos Main Net. The TF being a conglomerate in baking has been one of my main concerns since the start and always assumed that they would re-delegate their funds to public bakers in the name of decentralization . So far we havnt seen any of that happen, and have only seen the TF grow and become more centralized with the amount of tezos they own, gain, and continue to bake with. Since it is the lion share of the supply in Tezos they will continue to reap most of the rewards from the inflation of Tezos and will continue to grow bigger which in turn will make tezos more centralized cycle by cycle. We need too see some sort of change with this issue, and to have the TF see how much of a conflict of interest this issue really is. I would really like to see some updates to this problem we are starting to see transpire.
Good points. Many bakers have already left due to these issues and the foundation shows no signs of altering their trajectory. Serious consideration needs to be given to the idea of blacklisting a baker in the next upgrade.
Exactly.
We can just blame TF for everything, blacklist them and burn their tokens, because 15% of the network in hands of non-profit org is a problem of centralization our world has never faced.
Serious consideration needs to be given to the idea of burning whales’ tez if they decide to sell too
Exactly, I mean what could possibly go wrong? It’s not like anyone is going to shy away from a cryptocurrency that doesn’t respect property rights and expropriate owners willy nilly. That sounds like a healthy environment. I hear it worked out great for the bolsheviks.
In all seriousness, the governance procedure is robust enough that it’s not something really worth worrying about but for… ffs people.
Agreed. The fact that such a radical and outlandish idea is even being discussed is indicative of the sentiment rising to the surface re: TF dominance of baking and the increasing centralization of Tezos.
As a public baker, I believe it would be a lot easier to provide lower fees to the end customer if we could go ahead and stop a few of the foundation bakers. Also, decentralizing the foundation nodes by moving them around the world and putting them on proper infrastructure would allow Tezos to hire local engineers, and in turn those local engineers could work on Tezos documentation in their language, leading to more Tezos documentation in different languages. All in all this is a great idea for Tezos, however it would require effort from the foundation, and I’m not sure if they will find the time to do this sort of thing.
What would you suggest doing? The TF has all the veto voting power. Let’s call it by its name, we have a centralized blockchain at least in the decision-making part. I’m risking my XTZ in bonds (my XTZ is not even liquid) with the hope that one day it will be decentralized? So my XTZ locked in bonds is just based on hope?
We can shut down their bakers via a governance proposal, this way they conserve property right of the coins, of the principal. It is not an expropriation per se. If they move their XTZ to another account just to continue baking, then we’ll know who we are dealing with. Shutting down their bakers via a proposal, is just asking them kindly to stop. It’s not an expropriation. The blockchain is ready for them to stop baking, they said, that the purpose of the TF bakers was to bootstrap the network until it reaches some stability, after 3 years and the TF owning 28% of the supply, I think this goal has been achieved, now is time to ask them kindly via a proposal to stop.
The baking rights associated with rolls are property. Expropriation is expropriation. And no TF does not own anything close to 28% of the supply.
I’m not sure who, if anyone at TF, ever said that the purpose was to bootstrap the network, but I’ve never seen that statement and if it’s real it’s just idiotic and wrong. The network doesn’t need TF to bake and never has. TF bakes because the protocol penalizes you if you don’t.
Any news on that?
Hi Arthur. Appreciate all your replies here on Agora and Reddit. Thanks for all these insights. Yes, we get it that the protocol penalizes you if you do not bake. But it hurts the protocol (in general) more if a single entity holds 27% of the supply ( and therefore produces every 4th (!!) block) than the Foundation being penalized by a few hundred thousands XTZ per year (besides holding over 2B USD in other assets). Either the community gets penalized or the TF. And I support the community. Less XTZ at stake means rewards are more attractive for existing and new bakers. The TF being penalized is a very weak argument. But that’s just me 
In our reality TF owns 27%
Even if DLS owns half of it, TF is in possession of it. Even if TF transfer it to DLS, both parties will own 13.5%. Is possible that those two parties collude each other to veto anything.
Here’s the foundation saying "it was an important factor to ensure the “stability of the chain”
The reality is that the decision-making governance is too centralized within the tezos foundation.
Then they say that “they will distribute all the Foundation baking rewards back to the ecosystem”
What they mean by that? That they will be distributing their baking earnings to fund stuff? What they mean “back to the ecosystem” I haven’t seen them distributing anything at all. IF it was to fund marketing or development, but nothing, 0.
It is very different to expropriate a party that is centralizing the decision-making because they generated 27% of all the XTZ supply out of thin air, then expropriating a party that actually bought their XTZ from the markets, I don’t even think expropriation is the right word, more like it, is more of a revolution. No I don’t think this will be Bolsheviks.
If we are going to use analogies, this is the equivalent of a revolution from the private sector to “expropriate” “illegitimate” public property and excessive ability of the government to control the country (protocol) through that public property, is not an action of expropriating the private sector per se. Bakers that genuinely converted in the ICO their BTC or ETH to XTZ or bought from the markets are the private sector and the TF is the centralized government institution that generated their XTZ voting power, out of thin air. The message that is SENT is different from the message that is SENT by expropriating a genuine baker that got their XTZ through converting real wealth into it. It is just that this “revolution” can be achieved via governance instead of coercive action via a war.
You, saying that it will send a message to the public out there that this will be Bolsheviks, is not different from the message is already the chain sending that is already centralized in 1 party.
The point of baking is to secure Tezos, you’re speaking as if the point of Tezos were baking. Ultimately, what you are suggesting is fundamentally no different than TF directly distributing its tez holdings to bakers, or burning them.
TF owns far less than that.
There is only one reality, and TF owns far less than that. By the way you’re also confusing stake and supply.
It’s possible that Coinbase, Kraken, and Binance collude for a veto as well. The threshold for the veto is chosen to be very conservative. If you feel it’s too conservative, feel free to propose an amendment that lowers the supermajority threshold. Alternatively, cross that bridge and hard-fork if and when you see malicious vetos.
Thanks for pointing out, I’ll flag it. The person who wrote this had no idea what they were talking about which is, alas, not too surprising, but inadmissible nonetheless.
TF has abstained from every single vote.
TF is a private entity, not a government. Unlike a government, it has not itself obtained its funds through expropriation.
Like bitcoin, like eth, tez is not backed by anything and like them, the supply came 100% out of thin air.
I couldn’t tell.
For the sake of the argument: a simple solution to your conundrum would be to have TF hold something like ctez instead of tez. TF when would then hold no baking rights, no voting rights, but it would also be mostly not diluted by baking, and this would have mostly no impact on the profitability of baking.
If your concern is indeed about voting rights and baking rights, and not, in fact, about asking for TF to directly subsidize tez ownership, I assume you would find this to be a great solution.
No swiss law or SEC would convince me that they will abstain from voting for all the eternity.
I disagree, yes they obtained voluntarily money from private individuals from the ICO. But then they obtained the funds (BTC and ETH) plus they printed an additional XTZ that was not generated through the conversion of wealth, this XTZ is illegitimate in my book, is basically an expropriation of wealth done via supply from DLS + foundation to the ICO participants. Now, I just searched the white paper and I can’t find anything describing this additional printing.
I found that Fundraiser Statistics - Tezos Foundation says they published this apparently “change of terms” AFTER the ICO was closed, if this was published after ICO contributors handed over the money, in which described the additional printing of the supply for the Tezos foundation and DLS, then in that sense, yes TF and DLS fit into the description of a concept of government that expropriated wealth from ICO contributors.
If this was said or specified before the ICO fundraiser was closed, can you provide a document with evidence this was said before we handed over the BTC and ETH in the ICO? Because I can’t find anything.
Satoshi wallet supply came from out of thin air, the rest was generated through the use of computational resources, so not exactly thin air.
I certainly don’t care about TF subsidizing legitimate bakers, I don’t want a subsidy, I want to avoid the centralization of decision-making (since I’m locking XTZ in bonds, yes I would feel safer if that chance was not possible,). Yes, that would be a good solution, but this Ctez can be converted back to tez? Meaning that this Ctez that the TF would have, could be converted in a single time all of it back to Tez, or could we put some sort of restriction, so they could not convert everything they have in a single shot?
Edit: Additionally, we also could lower the super majority threshold to 70% to protect us from centralize exchanges too.
Sure, cross that bridge when you get there. If there’s malicious onchain behavior the situation is quite different.
Then you don’t disagree
The white paper is a technical paper. The terms of the fundraiser were outlined informally in the so-called overview document and formally in the terms and conditions. And of course the tez allocations is discussed in details in both documents.
Furthermore, TF merely proposed a genesis block, and it did so after the Tezos code was open source. Anyone disagreeing with the proposed allocation could launch a genesis block with an alternative distribution. Some tried and got very little traction, people overwhelmingly decided to adopt the proposed allocation, which, again, was the one that had been detailed in the overview document and in the terms and conditions.
Irrelevant, the Bitcoin protocol dictates than when someone finds an approximate hash preimage coins are minted, but they are minted out of thin air, you cannot exchange them back for the work that went into it.
Pretty much any asset can be converted back to tez. If TF decided to sell everything and buy a bunch of real-estate instead, they could always sell the real estate and buy back. Yes, liquidity matters, and liquidity is a function of volatility, and something like ctez, if it works as intended, has a very low volatility compared to tez, so moving from something like ctez to tez would be a lot less costly than moving from a portfolio real estate to tez. But the point still stands…
But basically we get to the crux of the matter, even TF not baking probably wouldn’t satisfy you, because they could always start baking at anytime. The only thing that would match your requirement is if TF held in its treasury little to no tez exposure, not just tez, any asset correlated to tez could be swapped with less slippage.
Okay, then I assume this paper was published before the ICO participants handed over the money. If this is true, then yes, TF and DLS are legitimate XTZ owners and did not expropriate wealth from ICO investors.
Yes, they could convert all their 1B or 2B in assets (don’t know how much they are holding right now in terms of USD) to TEZ, making them for that matter, the most centralized entity with the majority of the supply. Hence, my point that the most distributed is the wealth the more decentralized at the decision–making, and not only that, but all the TEZ holders should be legitimate owners, that actually bought from ICO, unlike exchanges that are holding TEZ that are not theirs. If all Tez are legitimate owners that actually invested money, then the “rich” wouldn’t be a problem, because it would be self-destructing if they acted irrationally destroying their own wealth. But still, it just would be much better for the chain if Tezos foundation converted their TEZ exposure into cTEZ and continue receiving their proportional rewards from the inflation, but with a restriction that it could not be converted back to Tez in a single shot. This will at least give confidence to bakers to continue locking their XTZ in bonds knowing there less decision-making centralization, with exchange we have enough.
Also, it does not seem a bad idea to lower the super majority threshold to around 70%.
One could make a convincing argument that by baking with unvested XTZ and baking beyond the initial bootstrapping phase, TF has, in fact, expropriated wealth from the Tezos community, and violated the property rights of XTZ holders. There is strong argument for the justification of reparations. Restorative justice.
I just want to put here, this PoS coin, to see how in comparison it looks a truly decentralized PoS coin, where nobody owns more than 2% of the supply.
In comparison, PIVX which is also PoS.
Now, I don’t think tezos would look like pivx but Is certainly wouldn’t look like the first image either.
What’s the first image?
