Electric Coin appears to be changing its Zcash funding approach, calling for decentralization.
Electric Coin (ECC), the company behind the Zcash cryptocurrency, has announced a shift in its funding approach to the token, signaling a move away from direct protocol funding and calling for decentralization where the current development fund, created in 2020, is set to go. To expire later this year.
in statement Released on May 1, the Colorado-based company expressed concerns about the current funding model, referring to it as a “development tax,” and highlighted the need for community-led initiatives to determine Zcash’s future.
“Some like the development fund model, others denigrate it. For many, it has become known as the ‘development tax’. I have recently expressed my public criticism of the model as it is currently designed. Whatever our private opinions, we are not beholden to the past.”
ECC CEO Josh Swihart
With the development fund coming to an end in November, many Zcash-focused initiatives are uncertain about their future. Swihart points out that the current funding model may not provide sufficient support for these organizations to continue operating as before.
“In November, the amount of rewards will be halved. If ECC and the Zcash Foundation continue to receive the same allocation as today, the proceeds will not be sufficient to meet the financial needs of either of them at the current price of ZEC.
Josh Swihart
In response to these challenges, ECC has decided “not to accept funds directly from the protocol under a new development fund,” adding that the company’s wallet address will no longer be codified in the protocol.
Instead, the ECC proposes two options for the Zcash community: allow the development fund to expire or move to a grant-based model that would increase decentralization and community participation in decision-making. Amid the news, ZEC's price rose nearly 10% to $22.8, according to data from CoinMarketCap.
