Electric Coin Company distances from direct funding of Zcash

As a long-term crypto investor with experience in following the Zcash project closely, I’m encouraged by Electric Coin Company’s (ECC) recent announcement regarding their shift towards decentralization in Zcash funding. The concerns expressed by ECC CEO Josh Swihart about the current “dev tax” model and its potential impact on various Zcash-focused initiatives resonate with me.

The Electric Coin Company seems to be changing its strategy for financing Zcash, advocating for a more decentralized approach.

The Zcash creators at the Electric Coin Company (ECC) have revealed plans to change their approach to financing the cryptocurrency’s development. This shift marks a move away from direct protocol funding and towards decentralized methods, as the current development fund, which was established in 2020, approaches its expiration date later this year.

As a crypto investor, I’ve noticed that the Colorado-based Zcash company has raised concerns about the current funding model in a statement released on May 1st. They’ve labeled it as the “dev tax,” and have emphasized the importance of community-driven initiatives to shape the future of Zcash.

“The development fund model is a subject of controversy for some, while others strongly criticize it. It has earned the nickname ‘development tax’ among certain groups. In recent times, I have voiced my concerns about the current design of this model in public. However, no matter what our individual views are, we are not bound by the past.”

ECC CEO Josh Swihart

With November approaching, several projects centered around Zcash find themselves facing uncertainty regarding their future due to the impending depletion of the development fund. Swihart has expressed concerns that the existing funding model might not be enough to sustain these organizations in their current form.

In November, the block rewards will be reduced by half. If the current funding allotted to ECC and the Zcash Foundation were to remain unchanged, their financial requirements would not be met based on the current ZEC price.

Josh Swihart

In reaction to these obstacles, ECC has made the choice not to receive funds directly for a new development fund from the protocol. Additionally, the company announced that its wallet address would no longer be incorporated into the protocol.

letting it come to an end or shifting towards a grants system that enhances decentralization and amplifies community involvement in decision-making processes. As a result, the price of ZEC surged by almost 10%, reaching $22.8 based on CoinMarketCap’s data.

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2024-05-02 16:08