The Electric Coin Company (ECC), known for its involvement with the Zcash cryptocurrency, is altering its funding strategy. It’s signaling a move away from direct protocol funding and advocating for decentralization, especially as the existing development fund, established in 2020, nears its expiration later this year.
In a statement issued on May 1, the Colorado-based company voiced reservations about the current funding model, often dubbed the “dev tax.” It emphasized the importance of community-driven initiatives in shaping the future direction of Zcash.
With the development fund approaching its November deadline, numerous Zcash-focused initiatives face uncertainty regarding their future. Swihart suggests that the existing funding model might not offer adequate support for these organizations to sustain their operations as they have been.
“In November, the amount of block rewards will be cut in half. If ECC and the Zcash Foundation were to continue to receive the same allocation as they do today, the proceeds would be insufficient to meet either’s financial needs at the current price of ZEC.”
Josh Swihart
In response to these challenges, ECC has chosen to refrain from accepting direct funds from the protocol under a new development fund. The firm also stated that its wallet address will no longer be encoded in the protocol.
Instead, ECC presents two alternatives for the Zcash community: allowing the development fund to lapse or shifting to a grants-based model. This transition aims to enhance decentralization and involve the community more in decision-making. Following this announcement, the price of ZEC surged by nearly 10% to $22.8, based on CoinMarketCap data.
0 Comments