{"id":111223,"date":"2019-08-01T15:44:15","date_gmt":"2019-08-01T22:44:15","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=111223"},"modified":"2025-11-08T13:10:48","modified_gmt":"2025-11-08T13:10:48","slug":"zcashs-development-funding-slashed-without-community-action","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/zcashs-development-funding-slashed-without-community-action\/","title":{"rendered":"Zcash\u2019s development funding will get slashed without community action"},"content":{"rendered":"<p>Funds dedicated to <a href=\"http:\/\/cryptoslate.com\/coins\/zcash\">Zcash<\/a>\u2019s ongoing development will see a drastic reduction from the ZEC block reward halving in October of 2020. Founder <a href=\"http:\/\/cryptoslate.com\/people\/zooko-wilcox\">Zooko Wilcox<\/a> has taken the conversation to the community, discussing ways to continue funding the privacy-coin\u2019s growth.<\/p>\n<h2>Zcash launched without ICO, pre-mine, or airdrops<\/h2>\n<p>The <a href=\"https:\/\/electriccoin.co\/blog\/funding\/\">Zcash Founders Reward<\/a> is scheduled to end at the time of the halvening, an event that reduces <a href=\"https:\/\/cryptoslate.com\/mining\/\">mining<\/a> rewards by 50 percent every four years. Launched in 2016, the Zcash platform was not funded through an initial coin offering. There were also no airdrops or pre-mine conducted by the cryptocurrency\u2019s founders.<\/p>\n<p>Instead, early Zcash investors such as <a href=\"https:\/\/cryptoslate.com\/people\/roger-ver\/\">Roger Ver<\/a>, <a href=\"https:\/\/cryptoslate.com\/people\/erik-voorhees\/\">Erik Voorhees<\/a>, and AngelList founder Naval Ravikant are entitled to the \u201cfounders rewards,\u201d which is 10 percent of the cryptocurrency\u2019s block rewards.<\/p>\n<p>Zcash co-founder Zooko Wilcox, the computer security expert wrote that he hopes the privacy coin\u2019s community members decided to renew the Developer Fund structure, said the co-founder in a <a href=\"https:\/\/medium.com\/@zooko_25893\/a-personal-letter-about-the-possibility-of-a-new-zcash-dev-fund-f6d30df64392\">blog post<\/a>. The funding scheme involves allocating a certain percentage of coins from future block rewards to the cryptocurrency\u2019s \u201ccore support functions.\u201d<\/p>\n<p>These include resources required for software and business development, <a href=\"https:\/\/cryptoslate.com\/regulation\/\">regulatory<\/a> and government outreach activities, and user support. Funds are also needed for Zcash\u2019s security auditing, educational programs, and marketing, Wilcox noted.<\/p>\n<h2>Rebranding to Electric Coin Company<\/h2>\n<p>The Colorado-based programmer added that he hopes the Zcash community decides to hire the Electric Coin Company (ECC) to do the work required to maintain and improve the cryptocurrency\u2019s protocol.<\/p>\n<p>The Zcash company, one of the main organizations that supports Zcash\u2019s growth and development efforts, <a href=\"https:\/\/electriccoin.co\/blog\/goodbye-zcash-company-hello-electric-coin-company\/#focus-on-zcash\">rebranded<\/a> to ECC earlier this year. The firm\u2019s management explained that Zcash is a community-based, decentralized project, and that some of the cryptocurrency\u2019s business-related activities may involve ECC.<\/p>\n<p>As confirmed by Wilcox, a group of professional investors contributed a total of $3 million to fund the initial development of the Zcash protocol. Designed to follow the same issuance schedule as <a href=\"https:\/\/cryptoslate.com\/coins\/bitcoin\/\">Bitcoin<\/a>, that maximum supply of Zcash\u2019s native cryptocurrency, ZEC, is capped at 21 million coins.<\/p>\n<p>During the first four years of Zcash\u2019s existence, 2.1 million or 20 percent of the 10.5 million ZEC coins mined will be distributed to the project\u2019s founders. The remaining 8.4 million coins will be given to Zcash\u2019s proof-of-work miners.<\/p>\n<h2>Zcash successfully completes important milestones<\/h2>\n<p>Zcash\u2019s early investors will receive a \u201csmall fraction\u201d of ECC\u2019s equity in return for their initial investment of $3 million, according to Wilcox. In addition to equity in the company, Zcash\u2019s early backers got a small percentage of the \u201cfounders\u2019 rewards\u201d coins, which were paid out during the first year of the privacy coin\u2019s existence.<\/p>\n<p>The first version of the cryptocurrency, called Zcash 1.0, was delivered on time and \u201cunder budget,\u201d Wilcox noted. He also mentioned that Zcash has provided $10 billion worth of transactional value to its users.<\/p>\n<p>Elaborating on how he secured additional funding for Zcash, Wilcox revealed that him and <a href=\"https:\/\/www.linkedin.com\/in\/nathan-wilcox-b7a446b5\">Nathan Wilcox<\/a>, ECC\u2019s founder and CTO, bought a small share of the founders\u2019 reward back from some of the early investors. The coins acquired were allocated toward funding Zcash\u2019s ongoing operations, instead of being awarded to the crypto\u2019s founders.<\/p>\n<h2>Donating half the wealth he expects to see in his lifetime<\/h2>\n<p>Wilcox further noted that some of Zcash\u2019s founders including himself donated a portion of their founders\u2019 rewards to a non-profit entity called the <a href=\"https:\/\/www.zfnd.org\/\">Zcash Foundation<\/a>. The cryptographer claims that he has donated about \u201chalf of all of the wealth [he] ever expects to see in this world\u201d to establish the Zcash Foundation.<\/p>\n<p>According to Wilcox, the foundation is an independent entity that plays a key role in supporting Zcash community\u2019s decentralization and overall stability in the long run.<\/p>\n<p>While discussing Zcash\u2019s major technological breakthroughs, Wilcox noted that ECC helped develop \u201c<a href=\"https:\/\/z.cash\/upgrade\/sapling\/\">Sapling<\/a>,\u201d a network update that improves the efficiency of shielded transactions. He pointed out that some of the core technologies used in Sapling such as zero-knowledge proofs have now been widely adopted by other cryptocurrency platforms.<\/p>\n<p>In addition to financing initiatives to enhance the Zcash protocol, ECC and Wilcox invested a substantial amount of resources into programs aimed at educating regulators and community members about the cryptocurrency\u2019s underlying technology.<\/p>\n<h2>One of the few cryptos approved by American regulators<\/h2>\n<p>Wilcox and the ECC team have also had conversations with regulators that go over how the Zcash platform is compatible with the relevant laws, and how the protocol has been designed to provide adequate security to individuals, corporations, and countries.<\/p>\n<p>The decision to keep regulatory authorities well-informed resulted in American lawmakers <a href=\"https:\/\/www.dfs.ny.gov\/about\/press\/pr1805141.htm\">officially approving<\/a> Zcash as a legitimate cryptocurrency platform, Wilcox noted. He also pointed out that Zcash is among the relatively few digital assets that have been listed on leading crypto exchange <a href=\"https:\/\/cryptoslate.com\/products\/coinbase\/\">Coinbase<\/a> and <a href=\"https:\/\/cryptoslate.com\/companies\/gemini\/\">Gemini<\/a>.<\/p>\n<p>The Zcash platform may be considered a \u201cworking example of a positive alternative for society,\u201d according to Wilcox. He argues that alternative models in which users might be vulnerable to Facebook\u2019s mismanagement of data are <a href=\"https:\/\/en.wikipedia.org\/wiki\/Facebook%E2%80%93Cambridge_Analytica_data_scandal\">no longer acceptable<\/a>. Other alternatives in which individuals may be negatively affected by the rules and policies of the American or Chinese government should also be rejected, Wilcox asserts.<\/p>\n<p>\u201cZcash demonstrates that a better model is possible, in which people are protected by their products and services instead of endangered by them, and which fits laws and regulations, and honors the great American traditions of civil rights, free enterprise, trustworthy institutions, and the rule of law.\u201d<\/p>\n<h2>ECC did not have to lay off employees during bear market<\/h2>\n<p>In his extensive personal letter, Wilcox reveals that around 4 percent of all ZEC being issued each month is part of the Zcash developer fund, and a certain portion of the coins is used to pay salaries to ECC\u2019s employees.<\/p>\n<p>The Zcash co-founder points out that the cryptocurrency project\u2019s funds have been properly managed, and that no ECC workers were laid off during the extended bear market of 2018. Meanwhile, organizations supporting <a href=\"https:\/\/cryptoslate.com\/coins\/dash\/\">Dash<\/a>, <a href=\"https:\/\/cryptoslate.com\/coins\/steem\/\">Steem<\/a>, and <a href=\"https:\/\/cryptoslate.com\/coins\/ethereum-classic\/\">Ethereum Classic<\/a>, among others, were forced to lay off their workers due to funding shortages.<\/p>\n<p>However, ECC was impacted to some extent from the crypto bear market, and is currently using 8 percent of ZEC\u2019s monthly issuance (instead of only 4 percent) to fund operations and pay employees, Wilcox noted.<\/p>\n<h2>Working on Zcash\u2019s new development and funding model<\/h2>\n<p>In order to fund Zcash\u2019s development after the four years since its launch, Wilcox and other community members suggested awarding 100 percent of the newly minted ZEC coins to the miners. Alternatively, a new developer fund can be created using a certain percentage of the new coins generated by the proof-of-work cryptocurrency, Wilcox suggested.<\/p>\n<p>Going on to mention that he hopes ECC is chosen by the Zcash community to manage the protocol\u2019s ongoing development, Wilcox wrote:<\/p>\n<p>\u201cAs long as ECC still exists, and as long as you\u2014the Zcash community\u2014offer us the kind of funding necessary to do this job, we\u2019re offering to take the job. We love Zcash, we\u2019ve dedicated our lives to it, and we have the best track record in the industry.\u201d<\/p>\n<p>Wilcox concluded his lengthy letter by noting that the Zcash Foundation will be releasing a way for the ZEC community to make a decision.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Funds dedicated to Zcash\u2019s ongoing development will see a drastic reduction from the ZEC block reward halving in October of 2020. Founder Zooko Wilcox has taken the conversation to the community, discussing ways to continue funding the privacy-coin\u2019s growth. Zcash launched without ICO, pre-mine, or airdrops The Zcash Founders Reward is scheduled to end at [&hellip;]<\/p>\n","protected":false},"author":67,"featured_media":107394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29,61045],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Zcash\u2019s development funding will get slashed without community action<\/title>\n<meta name=\"description\" content=\"Funds dedicated to Zcash\u2019s ongoing development will see a drastic reduction from the ZEC block reward halving in October of 2020.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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