Due to the expedited removal of the shielded pool (ZenIP-42207), some community members have lost access to their ZEN. This proposal outlines a DAO-funded goodwill compensation plan to address that loss and maintain community trust.
Motivation
• ZenIP-42207’s rapid implementation aimed to meet regulatory deadlines and broader strategic goals.
• However, the short window left some ZEN holders unable to migrate their coins from the shielded pool.
• The Horizen DAO has a duty to preserve community trust, especially when urgent decisions affect user funds.
Key Points
Restitution Pool: Allocate a portion of the DAO treasury to compensate users who can demonstrate they lost ZEN in the shielded pool.
Claims Process:
a. Define strict eligibility criteria (e.g., transaction proofs, addresses).
b. Gather documentation to confirm ownership of locked funds.
Compensation Plan:
a. Provide a structured plan (e.g., linear distribution or lumpsum) after thorough review of each claim.
b. If feasible, consider minting the “stuck” funds to the foundation’s address for future reimbursement, preventing further burden on the DAO.
Transparency and Reporting:
a. Regular, publicly available updates on claims status and compensation payouts.
b. Clear final audit or summary report of compensation distribution.
Timeline:
a. Set specific deadlines for claims, reviews, and final fund disbursements.
b. Ensure the process is neither abrupt nor open-ended.
Rationale
• Adhering to regulatory and strategic imperatives can still uphold the community’s best interests.
• A structured, transparent compensation process shows goodwill, reinforcing trust in the DAO’s governance model.
Additional Consideration
One of the core ideals of decentralization and self-sovereignty is that users should be able to hold and secure their funds without the need for constant monitoring. Many in the crypto community take a “long-term savings” approach to their ZEN, checking balances infrequently rather than engaging daily. These long-term holders are crucial for maintaining a stable community; by prioritizing the project’s vision over short-term market fluctuations, they help sustain a healthy, thriving network. Short deadlines for withdrawing or migrating funds can therefore run counter to this decentralized spirit, unfairly penalizing long-term holders who have placed trust in the network’s enduring value.
I wanted to add a personal note about why this proposal matters so much to me. I was recently impacted by the LA fires, which significantly disrupted my life and finances. On top of that, I’ve been a long-term supporter of the Horizen ecosystem, running several nodes early on and still holding them through market dips. Unfortunately, those factors led me to lose track of my shielded funds, and now unable to retrieve them.
I believe a robust compensation plan would help not just me but also many others who, like me, took a long-term view on holding ZEN. The DAO’s goodwill in recognizing these unexpected hardships would truly reinforce the spirit of community and decentralization we’ve fostered from the beginning. Thank you for taking a moment to understand my situation and for considering the proposal.
I understand where you’re coming from, and I really feel for your situation. Life can get hectic, and it’s easy to overlook things that aren’t immediately important.
At the end of the day, this is in the hands of the community, but it’s important to share context. Around 26,000 ZEN is stuck in the shielded pool, so this affects quite a few people. Your story shows why this proposal matters, and it’s a good reminder of the long-term trust we’re all trying to build here.
I think it’s important to address this issue.
Some users and members of the Horizen community have been adversely affected by this migration.
I also think the migration window was too short.
However, I think it’s important to limit complaints. Because, although the window was short, users had at least a year between the first discussions and the implementation of ZenIP.
It is important, and even essential, that end-users can prove that they are the owners of the funds they wish to recover, and the amount of those funds. Otherwise, there’s bound to be some drift. I also think that we need to set a maximum amount.
Secondly, it’s important that we return to a timeline. I’d estimate 6 months (after implementation, and therefore a favorable vote). Thanks to the evolution of the Horizen blockchain and recent price increases, part of the community has returned. If, at a later date, other users who were unable to take the necessary steps feel aggrieved, they will simply have to take up this ZenIP again.
If the total funds are not used up, I propose that the remainder be returned to the community in the form of an airdrop.
As the amount isnt large and wouldnt affect the markets, I am for this proposal. Even tho there was enough time to move your zen (for those that were actively following), some investors couldn’t keep track of all the news and don’t deserve to lose their zen investments.
I would be ok with this if an extra 26,000 ZEN were minted and added to the DAO. I would have a condition the holder show the private key and transactions history. I’m not sure how we confirm this. On the down side there will be a lot of effort administrating this. Any time the DAO spends on this they can’t work on building the ecosystems. It could turn into 100’s of hours. So the community should keep this in mind.
Since the 26k is already lost in the shielding pool, and unaccesible due to a fork. Minting them when we move to new chain sounds better… nows the chance, instead of using DAO funds.
I think it’s a good idea. As we go through life, we sometimes buy things and forget about them, only to rediscover them later. I believe the fundamental value of blockchain is immutable. Even if the network changes, I think it’s much more trustworthy and positively impactful on the network if the community guarantees access to old assets, rather than making them inaccessible just because the network has changed
This proposal is definitely a necessary step to actually maintain community trust and uphold Horizen’s commitment to fair governance
Many crypto investors operate with a long-term mindset… It’s important that these users, who support the project’s long-term vision, are not penalized by unforeseen deadlines.
The outlined claim process with strict criteria and structured compensation plan seems like a good approach, but it would be important to clarify how eligibility will be assessed to avoid any ambiguity…
I will go with the proposal, but i also stand with the point that extra 26k zen minted and added to the DAO, because using treasury funds for this purpose could divert resources from other critical initiatives.
I’m a fan of this proposal, with some points to add:
I agree that one of the value props of crypto is that one shouldn’t have to pay attention to what’s going on in order to keep their funds.
I’m not a fan of violating the 21 million supply cap, even if it’s for minting a trivial % of new supply…it’s still a violation of one of our biggest values on scarcity.
Rather, I’d handle this by a claims process with the Foundation and use its budget to fund reimbursements. The amount is well within that capacity.
Finally, while I’m a fan of seeing this go to vote, and will support it, timing for when it happens will have to fit into the bigger spectrum of priorities we have with limited resources. There’s a ton of room here for both fraud and wasting a ton of team time with fraudulent claims.
All that said, I think this is important and we should put it to vote.
This seems like an idea that should go to vote. When Horizen transitions to Horizen 2.0, as long as the limit of 21 million ZEN is not exceeded, it seems like it would be possible to add the ZEN that is forever locked into the shielded pool could be minted for the DAO
And a process put in place to pay someone who has ZEN locked into the shielded pool and can prove it with an action demonstrating posession of the private key
The total amount stuck in the shielded pool is 24442.16819948 ZEN. From a technical point of view the migration gives the DAO the opportunity to reclaim the stuck funds without increasing the total supply. The stuck funds are already part of the existing supply and could be unlocked in the snapshot and added to the DAO’s balance.
Building a claim process whereby users that lost funds in the shielded pool can prove ownership of funds could turn into a significant amount of work. The only sure way, that doesn’t require a large engineering lift, to prove ownership is for users to supply their shielded address private keys to the DAO. Rescanning the chain for each private key takes multiple days, which isn’t feasible to do with potentially 100s of addresses individually.
My proposal would be to give affected users the opportunity to provide private keys to the DAO with a sufficiently long period to socialize this. At the end of this period the DAO would perform a one time rescan of all gathered private keys and a reimbursement of the stuck funds.