If by protocol you mean compulsory pay for BCH miners, as in any proposal where the majority agree to orphan blocks by non-payers, this article implies that miners were assuming it would indeed be so:
If it weren't enforced with orphaning, it wouldn't drive any miners away, since they could simply choose not to pay. This article implies the point of contention is how much to require BCH miners to pay, not whether to.
If miners are seriously considering requiring anyone who wants to mine BCH to pay 1-10% of the reward to fund proposals, especially without demonstrating any awareness of how deep and potentially onerous such a change is, that is quite concerning. Both at the level of sophistication of miners and at the thought that this might actually happen in a "gotta keep up with Dash, Neo, etc." impulse or the familiar politician-style "things need funding, we must do something and this is something therefore we must do this" false syllogism.
I assume most here see some of the potential pitfalls, but in simplest and fairest terms I'd describe it as a mechanism where miners vote to invest some of BCH's hashpower security into projects in hopes of gaining greater hashpower security later (through faster adoption and the resulting price increase).
Besides the obvious short-term security hit and miner centralization (marginal miners pushed out) effects,* which are two sore spots for BCH already, when you get into the nuts and bolts there is a rat's nest of administrative issues. It's analogous to venture capital investment by hashpower voting, a kind of DAO, with a very cumbersome interface.
*unless the news pushes up the price enough to compensate (short term and long term), but that's part and parcel with the investment gamble; it could succeed short term purely for image reasons, sure, but "purely" means it was in fact counterproductive as a funding program and the market should eventually come to its senses and punish BCH for it
Yes hashpower voting is superior to democratic voting, and yes miners have skin in the game and thus motivation to make good choices, but that doesn't remove the "voting with other people's money" effect** nor does it make mining companies into investing geniuses (at least until the industry matures and reliable analysts and/or prediction markets exist).
What are the odds a panel of non-VCs, some of which are obligated to pay even if they disagree, pick winning bets? Would you buy into such a fund?
**even with a conservative 75% threshold, up to 25% pay even if they think the investment is negative EV
Finally, the devil is in the details. The inevitable clunkiness of such a voting scheme creates a fundamental trade-off between simplicity and accountability. For example, what if a project is funded and progress turns out to be slower than miners anticipated, or there is worry about custodial malfeasance? The options to deal with that seem to be limited to these:
1) Very detailed rules about fund usage and conditions for revocation, by smart contract (pitfall: boondoggle by rigidity, custodians handcuffed by rules that fail to account for unforeseen contingencies, tying up a lot money)
2) Another vote each time a concern arises (pitfall: 75% cutoff very hard to reach - or if 50% then the "voting with other people's money" factor doubles from 25% to 50%, too annoying for miners to bother with the research and voting on every issue, language barrier, each miner must have reps go meet people in person to even get close to VC-level of success if dealing with potential malfeasance, incompetence, or just plain disagreements about project vision - boondoggle by administrative nightmare)
3) Let it ride, keep money spigots on and hope for the best (pitfall: boondoggle by even more waste and even less connection with miner wishes; projects could require quarterly re-vote, but that's yet more overhead, moving the problem back toward (2))
It seems obvious to me that
Minimal administrative complexity to have much chance of net benefit > Maximal administrative complexity that is manageable in an inevitably clunky blockchain-based voting scheme
and it does need to be a net benefit (positive expected return), or else it harms BCH price and security even if it makes certain people happier (such as devs who deserve funding).
This is classic Bastiat. The seen and the unseen. We see the projects funded, the well-deserving devs finally getting paid, the increased adoption through marketing in some spheres, and maybe even price spikes (and therefore security increases) that correlate with those things, but what we don't see is whether security would have been higher or lower in the absence of the program.
For all we know, the program was tremendously wasteful and resulted in nearly all of the X% investment being unproductive. Something inevitably gets done and its backers inevitably try to paint it as a big success. "Look at that beautiful bridge built, speeding transport, a definite benefit!" This is of course the refrain of every boondoggle.
The refrain to "look at that nice app that was made and that new smart contract function that was enabled and that merchant marketing that succeeded" is no less misleading. Nice things can be built by sacrificing Bitcoin's security, but that doesn't make the sacrifice worth it. The analysis is always incomplete until we know whether the security is higher thanks to the project, after paying the initial price in security. The fact that there is a strong tendency to assume so, despite there being no reason to, is exactly why such proposals are dangerously tempting.
Naturally the fallacy is obvious when considering cash investment: the fact that you get some of your money back is never mistaken as success. The mere fact that it would be better if a project had more money (almost always true!) does not even come close to implying it is an investment that will have a positive net effect. I see many in Slack and Telegram groups falling for this fallacy.
I think a better solution, if miners don't want to just individually and directly donate to or hire/contract people for their own needs,*** would be mining industry consortium(s) whose membership dues go toward projects. Miners may join thanks to typical benefits such industry groups provide: a seat at the table in negotiating standards and best practices, a structured venue for coordination and information-sharing, etc. Another non-orphaning option would be to do a blockchain-based scheme where only the miners who want to join in the funding program do. It has some of the downsides mentioned above but avoids several of the worst ones.
***it seems to me, for devs seeking funding, that direct hiring or contracting is by far the most likely way they are going to get pro-level (multi-6-figure) salaries paid by miners. Think of the overhead involved with vetting, hiring, monitoring, and - if needed - firing a $300-500k/year dev through blockchain voting by the whole group of miners in a way to ensure net benefit. It doesn't seem remotely realistic to me. Some will say all that could be outsourced to a trusted custodian, but that involves even greater hazards (millions entrusted to one person, or if a committee more bloat and overhead) and potential for waste and miners regretting the decision because the custodian doesn't do quite what miners intended (hires/fires for reasons they may not understand or agree with, seems like they might be playing favorites with friends, etc.).
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