Is Starkware a threat to Zcash?

I imagine that might have been struck up before/around Blossom but idk, ECC is developing Halo now, seems like a moot point

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It is highly unlikely that ECC would work with Starkware. They are in direct competition on the zero knowledge front. The founder of Starkware, Eli Ben-Sasson is one of the founding scientists of Zerocash that went on to become Zcash. He invented zkSTARKS. Starkware took off like rocket. Now he calls himself a stark maxi.

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They do seem in direct competition, but if there are no plans to work together, why did the ECC fund them and why is the co-founder a former zcash person? Doesn’t make much sense to me

@Autotunafish Do you know what ECC’s plans/thoughts around starkware were when they funded them around Blossom?

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I’m guessing cooperation in developing privacy-preserving technologies. I think your idea of competition between projects here is askew.

I am concerned about competition between starkware and zcash, but even if they aren’t competitors and it is just cooperation between different privacy techs, why would ECC fund something that doesn’t give back to zcash/ECC/ZF?

It seems like a waste of the community fund to fund another project that isn’t going to be used by us, especially when it’s a former zcash person and we didn’t develop zk-starks in house instead with plans on using it.

It seems like less of a partnership, and more of funding a different company. But I also don’t have all the info so could be misunderstanding. I would like a clarification from ECC so I can understand better

It’s for the greater good, public interest.

Except it fragments the market, adding more competitors. Which is fine if Zcash was actually a true public charity, but when you have an incentive attached to the project (a token/coin), it is more crucial to capture users (from a product perspective) through one flywheel vs. someone elses’.

I don’t know the specifics of the Starkware investment from the Zcash side, but I wouldn’t be surprised if Starkware got a favor done by being affiliated with Zcash on that. It would be nice if someone like @Dodger could clear this up though so I’m not forced to speculate. I would also like to know about Roger Ver’s investment and what his terms were, etc.

Last but not least:

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I agree strongly PKR. More competition dilutes the pie available to the Zcash network and ZEC holders. I shouldn’t even have to state the obvious, but i will. ZEC holders have been perpetually punished by the market, by the miners who secure & sell, and by the obliged self-funding institutions who have little skin in the game with regard to price per ZEC value accrual. Taking matters further, into the more painful realm, there are situations like this StarkWare investment. StarkWare valuation and overall usage have now run laps around Zcash. Are ECC and their stakeholders benefitting by the success of StarkWare, while ZEC holders continue to watch the capital they put into ZEC bleed away? I’d love to get some answers to these questions also.

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quote=“Autotunafish, post:23, topic:40943”]
It’s also important to understand that the TM is also a legal-name because it indicates the specific goods and services i.e. ‘Zcash’ and not just a business or entity.
[/quote]
The ZFND is a 501c3 charity that funds projects in the public good or ~20% of the Zcash dev fund goes to the IRS. They don’t mention price development because that’s when personal interest and inurement occur and we are not competing in that respect.

My quote doesnt work sry!

The ECC status to my understanding is the same or at least pending but essentially held to comply (or seek to comply between some point hitherto) to the same criteria and I’m pretty sure this investment in question occured while they were still a for-profit entity so again I think it’s a moot point.

I agree completely @noamchom and @pkr , donating to a company that may be a competitor is one thing if it was the devs’ own money, but the community fund comes from the community, so it should really only be spent on things that benefit the zcash ecosystem and community.

@Autotunafish But wasn’t there threads here recently about people asking about the ZF’s goals/areas of focus, because there mission statement includes words with a broader scope than the ECC’s mission statement? And people wanted to double check that the ZF was focused on zcash only?

If I’m remembering correctly, the reason people were asking is because they were contrasting the ZF to the ECC, whose only goal is furthering the zcash ecosystem and zec holders.

So I do not understand how starkware falls under that, and I don’t think they would donate to a project just for the general public good, that doesn’t seem to be their mission statement or a good use of funds from the community fund.

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Read through the “Our Goals” section, it’s accurate.

yes, the ZF has a wider goal list than the ECC, which is what led to some questions about how the ZF could/would spend money that offended some people, but the ZF seemed to reply that their focus is on zcash.

And the ECC is who funded starkware, not the ZF.

And the ECC’s mission is solely on zcash and spreading zcash adoption.

Edit: These are the posts I was referring to about ECC vs ZF’s missions and concerns that came up, which showed that the ECC focuses on zcash only (or partnerships that help zcash as well)

With the ECC’s partnership with Filecoin and Ethereum (Protocol Labs, Filecoin Foundation, Ethereum Foundation and Electric Coin Co. collaborating to unlock recursion in Halo 2 and explore the future of proofs - Electric Coin Company), it was explained how it would give back to zcash and benefit zcash, and what projects/goals the team had in mind.

The starkware announcement didn’t include any information about that, which is what I’m interested about

The ECC does focus on Zcash development but is wholly owned by Bootstrap and are held to the same standards as the ZFND. Whether they decide to answer your question is up to them. “Bootstrap is a 501(c)3 dedicated to the uplift of humanity through technology, scientific discovery, education and human organization.”
https://www.bootstrapproject.org

Interesting, I don’t know how that works, if bootstrap has a broad mission and ECC does not.

As the posts I linked to (and ECC’s mission statement), it solely works on zcash development.

It’s worth noting that, technically, ECC is not a recipient of the Dev Fund. The Bootstrap Project is.

The text of ZIP 1014 indicates that the Bootstrap Project’s purpose is “furthering education, information, resources, advocacy, support, community, and research relating to cryptocurrency and privacy, including Zcash”.

The formal statement of the Zcash Foundation’s purpose and activities can be found in our form 1023, which is published on our website.

There’s also some more context in this (old) blog post from when ZF was granted 501(c)(3) status.

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Hi @Dodger - it’s my understanding that ECC is Bootstrap. ECC was a privately held company that became a non-profit called Bootstrap. So what does “technically” mean exactly? I am not putting you on the spot but genuinely asking for clarification on this.

No, ECC and Bootstrap are technically two separate legal entities.

By “technically”, I mean that, while they may appear to the casual observer to be the same entity, they are, from a legal perspective, two different entities.

The following information is all public.

The Zerocoin Electric Coin Company LLC (more commonly known as ECC) was incorporated in Delaware in November 2014. It raised investment to fund the development of Zcash, and it subsequently received and distributed the Founders Reward to its shareholders. It remains a regular “for profit” company, and its profits are taxable.

The Bootstrap Org, Inc. (aka the Bootstrap Project) is a relatively new entity (formed in April 2020) that was granted 501(c)(3) nonprofit status in July 2020. I was announced in October 2020 that ownership of ECC would be transferred to Bootstrap before activation of the Canopy upgrade (which created the Dev Fund) - i.e. we can assume that, today, ECC is wholly-owned by Bootstrap.

Per ZIP 1014, Bootstrap is the entity that receives a slice of the Dev Fund, to “be used at the discretion of the Bootstrap Project for any purpose within its mandate to support financial privacy and the Zcash platform as permitted under Section 501(c)(3).”

ZIP 1014 was drafted in the expectation that Bootstrap would use (at least part of) its slice of the Dev Fund to fund ECC’s operations. As a result, ZIP 1014 mentions ECC, and its transparency and accountability requirements apply to both Bootstrap and ECC.

That’s okay. :slight_smile: The ECC/Bootstrap corporate structure is highly unusual, so its not surprising that it confuses people.

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Good summary. Adding a little more clarity:

We believed it was in the best interest of, and desired by, the Zcash community to move ECC to a non-profit structure in order to eliminate any perceived conflict of interest. The easiest, quickest and least costly mechanism to move forward without 3rd party owners was to ask all the owners to donate their shares to a new 501(c)3. Bootstrap was formed and owners donated 100% of their shares. The ZEC dev fund flows to that non profit. Bootstrap is governed by a Board of Directors.

ECC bills Bootstrap for its Zcash work at cost plus a minor profit which is taxed. This structure was advised by our legal counsel.

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Understood. One follow-up question: did the investors then also donate their interest in investments like Starkware when they donated their interests in ECC? My question really emanates from the Starkware discussion since Starkware is now valued at $8B. Otherwise, I am grateful for these clarifications. I love this community and honored to be a part of it.

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