Democracy is tough – maybe even more so for decentralized crypto networks.
Zcash investors, community members and its flagship firms – Electric Coin Company (ECC) and the Zcash Foundation – undertook an arduous governance refresh in 2019. The process, which ECC CEO and zcash co-founder Zooko Wilcox described as “emotionally painful” at times, culminated in an approved funding structure beginning in October 2020.
We asked Zcash Foundation Executive Director Josh Cincinnati about building sustainable ways to fund the development of zcash, a privacy-preserving cryptocurrency some view as a public good.
“The thing that really matters most when you are talking about funding public goods … is to establish legitimacy in the process. Everyone in the community, the people who use your protocol, are bought into the process that decides these things,” Cincinnati said.
At ETHDenver earlier this month, Wilcox and Cincinnati pledged mutual support of Zcash Improvement Proposal (ZIP) 1014, which will go into effect around October 2020. Under the new fund, both firms will receive a portion of 20 percent of the network’s mining rewards set aside for funding the cryptocurrency’s development.
“It seems like a very good compromise that still enables the ECC to continue receive funding and the Zcash Foundation to receive funding,” Cincinnati said, “but it requires both organizations to adhere to pretty strict accountability requirements.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.