The value of Zcash relative to Bitcoin (and Ethereum) has been devasting for the past few years. Its poor relative performance has made it increasingly hostile for community and merchant retention. It has made building on Zcash appear increasingly hapless. It threatens long term ecosystem funding potential. And it has created prolonged negative brand awareness to the Zcash network.
The Zcash Foundation is currently retaining a stagnant position of competing altcoins (BTC and ETH) that is valued near $1,800,000, while they also retain a bit more than $6,200,000 of valued ZEC.
That is a ratio of roughly 3.5 units of ZEC vs each 1 unit of competitor altcoins, a staggering allocation into competitor assets when considering the relative weakness of ZEC. Adding additional ZEC this year, while eliminating the conflict of interest in holding competing altcoin assets will provide the community with assurance that the Zcash Foundation is fully committed to Zcash.
As an organization that has the success of Zcash as a core value, it is counterproductive to be holding so much relative value in competing altcoins.
My recommendation is that we open a community poll to determine if there is a majority who prefers that Zcash Foundation either exits their competitor altcoin holdings as a conversion into ZEC or USD.
Considering the fact that the Zcash Foundation has the success of Zcash (and ZEC) as a core value, I suggest that the conversion of those competitor coins goes into additional ZEC holdings. However because that may be controversial because it is taking on a perception of excess financial risk, I could also support the conversion into USD (overweighting too far into ZEC, during a period of prolonged ZEC value loss may appear at the surface as “throwing good money after bad”).
Which action do you support for the Zcash Foundation?
And please share your “Why” reasoning in the comments below
Convert all of the BTC and ETH into ZEC (less tax obligations)
Convert all of the BTC and ETH into USD (less tax obligations)
Keep all of the BTC and ETH as they are. Take no action
In my opinion, the portfolio allocation should to serve to maximize the funds available for improving Zcash in the future. It makes sense to hedge with some BTC/ETH. I’d put some S&P 500 in there too, if a nonprofit is allowed to do that, and maintain a strong cash balance, to hedge against an all-crypto-market decline. Something like 50% should be ZEC, though, to ensure the financials are still tied to Zcash’s success.
Allocating a portfolio this way doesn’t necessarily indicate a belief that ZEC is a bad investment, it’s just responsible risk mitigation through diversification. (I personally think that ZEC looks like an unattractive investment at the moment, but I’m hopeful that the discussions we’re having about the next iteration of the dev fund will fix that!)
If this were the case then the Zcash Foundation should have offloaded as much ZEC (and its BTC and ETH) as possible a couple of years ago when the broad crypto market was still in a cycle of euphoria.
The Zcash Foundation isn’t intended to operate like a family office hedge fund (not that I’m aware of). If the community really believes that it is too risky to be materially invested in too much ZEC, then it leads to the conclusion that perhaps converting into USD is the most rational choice. Sitting on competitor coins looks bad for business.
They hold more than enough cash balance to weather another black swan event (past black swans survived: Covid-19, variant waves, Russia-Ukraine War/ Commodities squeeze, FED hyper rate hike cycle).
Just for context, I believe many if not all of the BTC and ETH were obtained from founding donors of the Foundation.
I believe the Foundation has done an excellent job in managing its treasury. As a non-profit, it’s prudent to minimize the trading of its portfolio.
I also don’t see any reason to question the Foundation’s commitment towards Zcash. Although the market for Zcash is struggling at the moment, it’s important to keep in mind that better days lie ahead.
We’re all in agreement that the treasury funds aren’t expected to be actively managed or traded.
I’m calling this situation (based on the background you give, this is likely to be one time) to attention because as the Zcash-Bitcoin (and Zcash-Ethereum) pair trades at all time lows, there is a great opportunity for the Zcash Foundation to actively take an action to reaffirm its committment to Zcash (and ZEC) and capture a relatively strong chance at converting those competitor coins into ZEC in proximity to this bear market low.
The markets cheer and awe each time the Ethereum Foundation takes action with its funds. If the Zcash Foundation were in affect able to leverage its treasury on the bottom, it could be found as a moment to herald the Foundation for its undying resolution to support Zcash/ ZEC.
What a great headline we could imagine: “The Zcash Foundation Doubles Down on ZEC and marks the Zcash bear market low”
Upon searching a few common hot words, I’ve found that the community has had many thread initiatives to defund the ZF and the ECC, or to ask for increased transparency and accountability. But nothing ever sticks, there are many accounts here in the forum that are effective in sheep-dogging consensus and talking down to/ obfuscating/ talking beside voices calling for significant reform - I wonder how many of those are within the ranks at ZF, ZCAP, or ECC. I have seen many forum participants come and go with strong ideas to reform the ecosystem and make it more equitable, democratic, and productive; its like there is a ubiquituous force that drives out dissent against the prevailing ECC and ZF narratives for what Zcash is and how its development and funding should be directed.
Leaves me to ponder, is this community forum really a place for open thoughts and challenges to the status quo? or is this a Cowboy’s town from a spaghetti western movie? (where the facade of a non-hierarchical, self-organizing community is stood up… but the real business decisions are already driven on their own path by the wealthy power brokers)
These unanswered concerns that both ECC and ZF paid staff are actively voting in all community polls and actively driving discussions are quite pertinent today; especially to the context about ZF (and ECC) remaining on the Dev Fund despite their less than satisfactory results from the past 4 years of heavy resource spending of the ZEC block rewards.
This community forum actually belongs to devfund recipient ZF. Everybody will judge if this is a good thing or a bad thing. The discord is also run by ZF.
The only community-led discussion group is on telegram run by @sirhodl but because it is a chat, it’s difficult to keep track of non-trivial issues.
On the other hand, you can argue it is a community member, @aquietinvestor, that earned a place in the ranks of Zcash that kicked off this hot topic.
Maybe these forums should be donated to ZCG which is the closest thing to the real community.
Now, speaking for myself, English’s not my mother tongue, so I really can’t go on and on with written activities, it’s just super tiring and Zcash price makes people give up more easily: indeed if OGs like Matt Green think the coin and community are dying, why would you dedicate energy and time if you believe everything’s going to the waste bin ?
So, these dissent voices are akin to someone’s drowning: they get it out of their chest, and if no follow-through, they just quit. Especially if you argue with a devfund recipient who has unlimited resources (thank you devfund ) and time to counter-attack you if you are someone powerful, or they just ignore you if you are just a peon.
Really Zcash is a mess, because there’s the ECC which is a company and you have their employees that think they can jump in the forums and add a disclaimer “not speaking for my company” and go against their company’s official stance. If you are an employee, just stfu and let the company state his position. If you disagree with your company, just gtfo.
Makes you wonder why do we need a company to begin with if that company can’t hold back their employees…
I can say really honestly for all these years I trusted devfund recipients to be excellent, to do the right thing, and to respect the community and investors that feed them. Over time, I found cues here and there that breached my trust in the system. Why am I still sticking around? Well, I believe in privacy and Zcash is a contender but it’s not the only one anymore…
I feel bad that I missed the @Dodger AMA this week, I’d like to have heard his response to this question. Why hang onto $2,000,000 of altcoins while ZEC is being driven down into the ground There is a great opportunity this year to take some bold action and to align incentives on the ZF balance sheet to broadcast a full committment to Zcash and ZEC. $2,000,000 even after tax obligations would create a nice portion of capital to deploy for the sake of the ZEC bear market cycle low.
A lot of your critiques are well spoken. And I am at the same conclusion, even if the powers that be don’t actually want to change or to really throw themselves all-in for Zcash, we’ve got to do what our instincts tell us because in the global struggle to keep up P2P digital cash privacy Zcash is remains the greatest long term prospect.
This is a Re-Polling of the original from more than 6 months ago. (There seems to be no technical way to re-run a poll without creating a new thread)
At the time of the original poll
Zcash → $33 → Today $30
Ethereum → $1,800 → Today $2,200
Bitcoin → $27,000 → Today $42,000
Considering the fact that the Zcash Foundation has the success of Zcash (and ZEC) as a core value, I suggest that the conversion of those competitor coins goes into additional ZEC holdings. However because that may be controversial because it is taking on a perception of excess financial risk, I could also support the conversion into USD (overweighting too far into ZEC, during a period of prolonged ZEC value loss may appear at the surface as “throwing good money after bad”).
Which hypothetical action do you support for the Zcash Foundation?
And please share your “Why” reasoning in the comments below
Keep all of the BTC and ETH as they are. Do not Invest in Zcash
Convert all of the BTC and ETH into ZEC (less tax obligations)
Convert all of the BTC and ETH into USD (less tax obligations)
Convert all of the BTC and ETH into a Hedged Balance of ZEC and USD (less tax obligations)
To clarify the sarcasm, some of this is figurative language. I do believe that ZF has the best interests for their organization and for the Zcash protocol in mind. Part of that involves risk management of their treasury, but I also believe that the ZF (and ECC) has to be measuring optics.
I feel that slowly the optics of the big organizations who support Zcash are deteriorating, and for that reason I think it could be a strong meme signaling faith in Zcash and ZEC holders, if the ZF hedges out of BTC/ ETH and into ZEC/ USD.
iwo selling all btc and eth i get the point, but wat i tink is better is sell half(sum big part at once) then slowly over time, since these r top coins that will probably appreciate also wif time.
but yeah. usd for stability is needed also for next year i guess.
I think ZF’s choice to hold BTC and ETH has proven to be a wise one. Sustaining a dedicated org should have a much more powerful impact than the meager buy pressure of converting treasuries to ZEC.
And I see what you mean about it being a good meme… but I guess I’m not sold on it. I don’t think many people care. The contents of ZF’s treasury don’t even scratch the top 50 Zcash Optics Problems
Yes it has proven wise over time, but lets also consider the near proximity of financial distress that ZF or ECC are under today, and will remain, if ZEC remains valued this low, in the year or two ahead.
The BTC and ETH aren’t spendable (afaik), so until they’re hedged out into dollars or ZEC, they practically speaking don’t exist as anything but an illiquid asset on the balance sheet.
we want these guys to make wise investments in zec and make it more valuable. that should be their focus… we are not hiring them to make investments for us (eg its not a hedge fund)…if we want exposure to BTC or ETH we can do on our own. it was a gamble that paid off (we think as we don’t know the cost basis do we?). I still stick to the view the correct way to hedge is to hedge your costs for 6-12 months. so it’s likely USD (not btc or ETH).
) and time to counter-attack you if you are someone powerful, or they just ignore you if you are just a peon.
There is a great opportunity this year to take some bold action and to align incentives on the ZF balance sheet to broadcast a full committment to Zcash and ZEC. $2,000,000 even after tax obligations would create a nice portion of capital to deploy for the sake of the ZEC bear market cycle low.