Week of October 26 - Questions for the Tezos Foundation

If you have a question for the Tezos Foundation, please include below and we will do our best to answer during the week or in this week’s update coming out on Friday.

Here is a link to last week’s update.

Greetings dear friends! This week I would like to kick off my questions with one regarding the “top row” members of the Tezos Foundation, the Swiss folks. I was going over their online profiles and couldn’t help but notice a lack of computer/programming/crypto experience.

What is the function of these people on a day-to-day basis? What makes them qualified to make funding decisions and direction decisions based on technical merits? Are they aware of what happens in the Tezos community from a first person perspective? How much do they get paid for their work on the Tezos Foundation?

My apologies for the rough sounding question but I’ve been here for about a year now and I have not seen these people even try to engage with the community. How is such behavior expected to bring confidence to the community when the only time we see certain people is 2 times a year during the bi-annual update?

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The Tezos Foundation currently bakes with ~26.37% of total supply in the network. This represents 6.37% in growth since network launch in 2018. This presents a systemic risk to network health with the looming potential to negate the governance process and lowers economic opportunity to attract new bakers. Is there a plan for the foundation bakers in the future or will they continue to bake and grow?

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Any chance we can have one or more of the Foundation board members present the TF in a future episode of the TQourum series? It would be nice for the community to meet some of the members and hear their thoughts about the future of Tezos.

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Council Members don’t have a day-to-day operational role but have an advisory one. They are well aware of what’s happening in the community I have stated during the last TQuorum and here. As for the remuneration, this is not for disclosure for now.

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Thank you for the prompt answer, Robert

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tl;dr: Is it possible to use Tezos’s on-chain governance model to destroy and re-issue unclaimed fundraiser tokens for those who can prove they lost their fundraiser password (if they provide all the other relevant information–private key, PDF, KYC info, fundraiser deposit receipts, etc.)? It seems like the Tezos governance model (could/is?) being used to destroy tokens of those who make a claim under category iii of the class action settlement, so why can’t the same mechanism be used to help those who lost passwords?


This is an earnest question from a noob, so please hear me out:

I’m one of the many (non-technical) participants of the fundraiser who has not been able to access their allocation due to a lost password. I have my private keys, pdf, KYC, and all other relevant information. Yes I’ve tried using the bruteforce tool. And no I’m not looking to get into a debate about what I or the Foundation could have or should have done differently during the fundraising process.

(Pre-emptying the replies of: “Dude – if you were dumb enough to lose your password that’s your fault and crypto isn’t for you!”; and “It’s not my fault, the Foundation didn’t make it obvious enough that you’d need your password in addition to your secret keys!”; etc. etc. That argument has been had many times on various forums).

I’m posting because when I read through the details of the recent class action settlement, I was struck by the fact that claimants who claimed under the category iii “Claimants Who Have Not Accessed XTZ” (the category I would fall under) must recognize that “the Tezos community may vote to destroy such tokens” in the event the individual files a claim (source: Page 12, paragraph 7, https://www.tezosfoundationsettlement.com/Content/Documents/Notice.pdf). I did not file such a claim, as I hope to one day retrieve my XTZ.

The reason why I bring all this up is because it made me appreciate the power of Tezos’s on-chain governance model—the community could vote to ‘destroy’ the tokens of class action claimants. But it also made me wonder—why can’t the community also vote to destroy and re-issue those tokens for people who lost their passwords? It seems to me this would be practically feasible: An individual can show their private key, PDF, KYC information, transaction receipts from the fundraiser—all of this information can presumable be linked to a public key and XTZ on the genesis block that can be proven to have not been claimed/activated. It seems like this is the same process that is being used for those making claims in the class action lawsuit?

In my opinion, if it is technically feasible to do so, it would be a show of goodwill from the Tezos community and Foundation—and would also be a novel demonstration of the power of the on-chain governance model. I was a little shocked and disappointed by the initially quite hostile reactions from the Tezos community in online forums towards people who had lost their passwords. There was lots of namecalling, and a general sentiment of ‘too bad, too sad’ which made me feel ridiculed and alienated, and certainly made me disengage from the community. The Foundation professes to care about community, and I believe my proposal would help to re-engage potential community members such as myself, rebuild some goodwill, and bring more tokens onto the network to stake and improve security.

So my specific question is this: Why/why not is my proposal technically feasible? And if so, what would be the process of proposing it via the on-chain governance model?

I am 100% with this poster. Continuing the current course, unaltered, will lead to the logical conclusion of 50%+ de facto control of the network by the Tezos Foundation. This along with the growth of exchange staking services all but guarantees a very serious problem. I don’t mean to be uncivil, please understand the severity and the gravity of the situation! My words are not meant to offend, they’re meant to shake you up. This is not a subject which should be taken lightly and I’m sorry I even have to say that.

Please allow me to explain the contradiction that the top row decision makers within the Tezos Foundation embody which will undo all their hard work and make them look foolish in the end. It is wise to change course if even only for reasons of vanity and ego.

Here’s a simple list of attributes projects with “foundations” can pick from:

Corporate/“The Empire”

  • Fast decisions by C-level execs

  • Controls huge portion of network (via baking)

  • Decides what to build centrally

  • Does not explain its decisions

  • Lots of marketing via paid channels (i.e., influencer-shill, pay for play news)

  • Does not try to promote having more bakers in the ecosystem or “fudges” the numbers to make it appear favorable

  • Pays for lots and lots of exchange listings

  • Ignores the people it “should” listen to

  • Does not make it public how much people working in foundation make

Cypherpunk/“The Resistance”

  • Slow decisions by technical people (the 5 stages of the government process take a while as does debate)

  • Controls a smaller and smaller portion of network (via baking) over time

  • Supports what people naturally want to build (no [sic] “soft” control by ignoring and icing out devs.)

  • Carefully explains direction and decisions

  • Word of mouth marketing (people are inspired)

  • Tries in all possible ways to incentivize long term bakers

  • Pays for key exchange listings and uses community organizing to list on exchanges

  • Makes salaries and other administrative information public and the decision making people accountable

After looking at the lists, it becomes readily apparent the Tezos Foundation leadership picks from both columns and they pick all the wrong attributes. Worst of all perhaps, there’s a candid lack of awareness about what cryptocurrency is fundamentally about at the highest levels. That’s not unexpected as the top leadership is technically ill educated and fundamentally disinterested in being edified. The proof is in the pudding. Fundamental decision making is not actually made at the small committee level where the experts are; it’s not, it shows. I talk to and follow the experts closely. What they want and recommend is not what rules the day.

Tezos Foundation leadership: “Corporate Up” properly or let the bad boy/girl cypherpunks and subject matter experts inspire and lead because they understand what the heck this new technology is about. Please don’t pick the worst of both worlds. You still have the capacity to inspire by example and by being a trailblazer in this space. No one will remember some people who had the opportunity to change the world, didn’t try anything special and faded away from history. Be bold! But know what you don’t and listen to your technical advisors. You’re swimming in the ocean of a new paradigm, listen to those who have been building this world for you for years.

As things stand, the Tezos Foundation is a big reason why Tezos gets mocked on a daily basis by other projects and there is nothing we can say as supporters when pressed by the more knowledgeable trolls. They know and we know the real situation. Many, many, maaaaaaaany people have been disheartened and have quit Tezos because of what the Tezos Foundation has been doing over the years. This ugly and unfortunate history needs to be redeemed, not simply swept under the rug along with everything else.

Last but not least, there are many great people on the committee and administrative levels who make Tezos work every day, despite the frigid lack of leadership, heart and inspiration at the top. I applaud you with all my heart! You are the real ones! You make the people at the top look better and you could make them look like geniuses if only they would listen and be responsive like they’re supposed to. You deserve all the glory!

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Couldn’t anyone just submit a proposal that would eliminate the foundation’s holdings?

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I think it is important that the foundation continues the stacking, it allows to protect the network, on the other hand it should set up a systematic burning of the rewards in order to avoid any controversy concerning the increase of its dominance on the network .

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While I understand why you guys want TF to stop baking/burn rewards, I’d better think about the ways they can use these tokens
They support Harbinger now but there could be many more projects with this kind of support.
Gas fees (esp high fees) seem unusual to newcomers, what if we have a wallet TF paying fees for.
there could be limitations to prevent spam but just to give you an idea the money could be spent inside the ecosystem.
Not to mention eth users spending hundreds of thousands of dollars on fees daily
Though reducing the onchain role of TF is a good idea there can be better ways than simply burn the tokens

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TF can continue to bake as I do think it helps keep the network safe, but they need to address the fact that their ownership stake in the network has continued to grow.

I don’t see why they can’t redirect the XTZ from at least one of the TF Bakers to public bakeries.

If they are merely trying to not become diluted, then the additional XTZ passed 5% annual should be used to form some sort of on-chain DAO treasury, or distributed to ecosystem developers, or used as a reward for hackathons (with substantially higher prizes).

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NO, that would increase the risk to the network. If the network can’t stand on it’s own then we can write it off as a failed experiment that was propped up by a central entity. It has been over 1200 days since the fundraiser and nearly 900 days since network launch the people with skin in the game deserve an answer on this. Grow you say just keep stacking why? To prop it up to support markets? I question your motives due to the past anonymous interviews you have done on behalf of the foundation. If this goes unanswered I can only view it as being seen as a mechanism for income.

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Question to TF.
Now that we have Dexter, tzbtc and Quipuswap and stablecoins coming, are you planning to add liquidity to DEXes or put some of tf’s fiat holdings into stables on tezos?

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People keep asking the same question over and over again. And unfortunately it seems like the Tezos Foundation keeps baking unaltered due to pure inertia, hoping the people stop asking these uncomfortable questions.

The questions will not stop until the people see a sign of life and a sign of thinking like an entity that’s trying to protect and foster a decentralized entity. Tell me how ironic is it that now people see that they need to protect against the TF itself? That’s a 10/10 on my scale.

Do the right thing!

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I just want to go on record here and say that burning the tokens is an absolute non-starter as it would only consolidate voting power in the hands of whomever has it currently. For individuals and public bakeries, this is good, but you also consolidate voting power for exchanges as well. There needs to be a balance.

I also want to voice my opposition against any proposal that intends to remove the Tezos Foundation’s XTZ as it is a fundamental violation of property rights.

That said, a specific amount of XTZ was awarded to TF upon protocol genesis. I think that any growth above that inflation adjusted number (and I think the community accepting the inflation growth is a generous position) goes against what many individuals expected. I have no personal issues with DLS vesting XTZ staking.

Instead I would suggest that any XTZ over 5% annual is ear-marked for distribution to grant-applicants as additional payment. For instance, say a grantee is awarded $50,000 USD for a project. Pair it with a $50,000 equivalent in XTZ that the Tezos Foundation received because of the staking differential (not 100% is staking, so stakers grow their holdings versus the entire supply.)

There can be a stipulation that 50% of this XTZ is used for public or private baking over a pre-determined time span, adding resiliency to the network. Once that time-span passes, the individual can do as they please. But I would imagine they would hold, and continue to bake, otherwise why would they be building on Tezos in the first place?

What I would much rather see is TF supporting an on-chain DAO that is well capitalized and in community control. I’m going to cross-post a reply I made in a related thread below.

I do believe that TF baking is a net-good, but the growth of their XTZ holdings is worrisome, and I think course correction is necessary. Tezos as a network becomes stronger if more individuals hold XTZ.

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