The Electric Coin Company, a group that supports the development of Zcash (ZEC), announced the community has voted to distribute 20% of the ZEC network’s mining rewards to infrastructure and marketing development. The ZEC development funding proposal was initiated because the coin’s Founder’s Reward expires in November and after block 1,046,400, ZEC miners will only get 80% of the block subsidy.
Also read: Bitcoin.com Update: Dev Fund Proposal ‘Will Not Go Through’ Without More Agreement
Zcash Community Votes to Allocate 20% of the Block Rewards to the Zcash Foundation, Electric Coin Company, and Grants
Zcash is a digital currency that was released on October 28, 2016, and the project aims to enhance a ZEC user’s privacy. Similarly to BTC, zcash has a fixed supply of 21 million units but the currency also offers zero-knowledge proof transactions. While some ZEC transactions can be transparent, others can be “shielded” using a cryptographic element called zk-SNARKs. Last August, the creator of zcash and the CEO of Electric Coin Company (ECC), Zooko Wilcox, wrote a letter to the community asking them to consider a new development fund.
“I hope that the community will decide to renew the ‘Dev Fund’ structure, allocating coins from future block rewards for core support functions such as software development, user support, business development, regulatory and government outreach, security auditing and monitoring, educational and marketing initiatives, new protocol development, and so forth,” Wilcox wrote at the time. The developer also emphasized that ECC could be hired to continue focusing on those goals.
On January 28, ECC’s Josh Swihart wrote a blog post explaining that for four years 80% of the ZEC miners’ reward went to miners, 15% was allocated to investors and founders (Founder’s Reward), and 5% was given to core development. Swihart further noted that the 15% Founder’s Reward will expire in November so the Zcash Foundation decided to poll the community in order to come up with a new funding plan for development. The ZEC community recently finished the poll and voted to “create a new development fund with 20 percent of the mining rewards.”
“While the miners receive 80 percent as of block 1,046,400,” Swihart detailed. “Assuming we have agreement with the Zcash Foundation, this will be implemented in November 2020, to coincide with the first scheduled Zcash halving when the total block rewards will be reduced to half as much ZEC per block.” Swihart further added:
The development fund will be distributed to ECC (7% of mining rewards), the Zcash Foundation (5% of mining reward) and an additional fund to be used for grants to support third-party Zcash efforts (8% of mining rewards). Grant participants will receive the largest portion of development funds which will further decentralize Zcash-related efforts. Stipulations were also introduced for formal accountability and reporting requirements of each participant.
The infrastructure development news follows the recent funding proposal for Bitcoin Cash initiated by Btc.top founder Jiang Zhuoer. The BCH funding proposal was met with mixed feelings and the BCH community discussed the proposal relentlessly for seven days. Following the week-long debates, Bitcoin.com’s mining operation updated the community and explained they “will not go through” with the proposal without more consensus from the community at large.
The BCH community on the Reddit forum r/btc also discussed the ZEC development fund and how the Zcash community voted to use block rewards to fund ECC, the Zcash Foundation, and grants. “Not sure if it is a desirable outcome,” one Redditor wrote in response to the ZEC coinbase rewards plan. A few BCH supporters disliked the Zcash decision to use mining rewards to fund infrastructure and marketing development and others seemed optimistic about the plan. One individual noted that ZEC investors and founders had already been paid in a similar fashion. “Basically nothing changes for miners, the 20% will just be distributed differently,” the Redditor explained.
1/ I really don’t get all the fuss about a % of block rewards going towards funding development. It actually makes a lot of sense to me. The main arguments I’ve always heard, at least as it pertains to Zcash is that it has been a large reason for its price decline
— GoGoFOMO (@GoGoFOMO) January 30, 2020
Swihart and ECC are pleased with the voting process and that the community has chosen to initiate the infrastructure development fund. “We would like to thank the Zcash community for its trust, encouragement, thoughtful engagement and for making its voice heard,” Swihart’s blog post concluded. “We’re grateful for the opportunity to continue to focus our efforts on this important project and its potential to bring economic freedom and opportunity for all of humanity.”
On the Reddit forum r/zec, ZEC supporters seemed very supportive of the decision as well. “This is good for Zcash,” an individual wrote on the forum. After the development fund was voted on by the ZEC community, the price of zcash spiked and the digital asset is up 40% this week.
What do you think about the Zcash community voting on the development mining fund stemming from 20% of the chain’s block rewards? Do you think ideas like this are good for development and infrastructure? Let us know what you think about this subject in the comments section below.
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