Dear Josh,
I want to express my gratitude for providing transparent details. As a fellow BLD holder, I propose an alternative solution. Instead of selling BLD, we could pledge it and mint IST (stabletoken), thereby supporting both Agoric and Zcash ecosystems. What are your thoughts on this?
Hi @edward_stccap, welcome to the forum!
I would love to do that under normal market conditions. I certainly donāt like selling at this price. But there are other near-term dynamics, including risk management. In the case of BLD, we are working with a third party to monitor liquidity and limit slippage.
In full disclosure, I am also personally a BLD token holder.
So, at current prices, ECC has roughly ~$3.96M of ZEC and ~$9.14M of BLD tokens. Seems a little strange to have more than double the value of a token other than the one the company builds for.
Agreed but itās not by choice. The BLD came from a seed stage investment we made in 2018. The tokens were only recently available and not highly liquid - $600k in trading volume over the last 24hrs.
The fact that they were writing seed stage checks back in 2018 is the real strange part.
You know guys, I found the words to formulate the paradox of the Zcash development fund. Along with the fact that I cannot deny its great role, I also cannot deny that it is the most non-market mechanism of influence on ZEC.
Iāll explain. The normal investment market is arranged in such a way that the lower the price, the more willing to invest their money in the token. And the higher the price, the more willing to sell the token. Cryptocurrencies such as bitcoin do not violate this principle. Because investors are guided by this market principle. Miners are similarly guided by exactly the same market principle. After all, their motivation also has an investment nature. Miners buy equipment when it is cheap, and sell a mined coins when it grows in price, covering their costs and making a profit.
But only the development fund has a completely reverse non-market logic. When the price tends to go down, development funds are forced to sell even more and even more coins. And now we are discussing the sale of additional coins here, beyond the budget of the structures, seriously stating āthere is no point for ZCG to hoard ZEC if this means that ZEC is worth 50-80% less next year.ā And this happen in the phase when the market is growing, the price of ZEC shows catastrophic weakness, and there are no people willing to buy a coin on the market.
I donāt know what could be sadder, but I have to admit now that it looks like a bad investment, with all its potential. Sorry. The topic is so bad that I give it the highest danger rating.
What you are talking about is tokenomics. Essentially money games. In my view, worrying about tokenomics is much, much lower on the priority list than worrying about adoption. Creating something that people find really valuable to use.
It is like a company spending time worrying about how to prop up their stock price instead of being a good business. Sure, it can be a consideration, but if you donāt have a product or service that people want to use, you should probably focus on that first and less about money games.
Realignment of the Budgets:
There is nothing wrong with tight budgets. Its what you choose to do.
The market is focusing the budgets of core zcash organizations. What are the core competencies inside ECC/ZF. Has competencies aligned with opportunities? Has competencies aligned with budgets?
The organizational desires: growth campaigns, travel, user research, PR, hiring for comms, security, product and engineering needs. Could be split into separate individual projects, which would be presented to zcash community grants. If ZCG votes for these projects, great! The zcash community will either elect or unelect ZCG members (hopefully) based on their performance. This could reduce ECC/ZF internal budgets, focus their core competencies and grow zcash organizations.
Please, ECC/ZF write a blog post outlining what organizational activities have had to be paused, what was the estimated budget. This can act as a guide for individuals an organizations to say, hey we have these core competencies lets take this opportunity. It can send a message to ZCG of market demand.
Adoption? Iāve been writing about Zcash for more than 5 years. I communicate with retail investors in ZEC and I can say that people are attracted by the position that ZEC is a promising asset that will allow them to benefit. But today, when two full crypto cycles have already passed, they do not see that this is at least a reliable asset in which they should save their money for the day when they need it. A huge number of people want to dispose of funds when they need them. And they want to be able to do it without loss. This is the main adoption of ZEC for today. This is his minimum task!
This is an open forum, anyone can read what we are writing here. I cannot promote ZEC with a clear conscience and heart, knowing that we do not prioritize the interests of these people. And we all have to consider the interests of people, because once we lose the trust of these people, we will never restore it.
But Iām not unique in this aspiration, because exactly the same feeling of confidence on ZEC for many people is the desire of many here. This thesis even listed in the ECCās North Star as one of the main priorities: āA feeling of security so people are confident that their ZEC is battle tested and secure from censorship, debasement or lossā.
The North Star implies something to strive for. A landmark that helps not to stray from the right path. This is not a momentary task list. It cannot be fulfilled, it can only be followed.
An analogy with a caravan in the desert.
That is, when you have two solutions to choose from, you should follow the one that corresponds to the tasks of the north star.
I understand your concern. My point is simply that if we think timing the buying and selling of comparatively small amounts of ZEC is what will help price performance, than we have already lost the battle.
If ZEC were more widely adopted (due to ease of use, integrations, awareness), its market cap would make the timing of selling and/or saving the relatively small amount of money required to keep Dev Fund functions running irrelevant.
In other words, I think it is much more likely that the lack of user-friendly applications that are appealing to non-cypherpunk people has caused the poor price performance than anything to do with Dev Fund recipientsā market actions.
Poor Price begets poor price, and Great price begets great price. We are living the crisis of the cart before the horse because Zcash believers and influencers all steadfastly planned to build and keep their heads down, and never to indulge themselves in promoting ZEC for great price movements. But now looks at where we are, the price trend is chronically down and that has the bad impact of making it terribly challenging to retain new community investors. There is the brink of a death spiral happening where no new organic buyers exist in the market, and the primary sellers are the dev tax teams who must sell at any price to pay for their monthly costs (not to mention the miners which we know are selling without discretion). It leaves Zcash in a bad catch-22 where there seems to be no way to a winning decision.
How did you personally wind up also as a BLD holder? Advisory or contractual work? This is an interesting revelation because I remember when Zooko waved a bright red flag about conflicts of interest regarding some Zcash people who also had relationships to Tezos
Fair question. I made a personal investment. I have never been paid by them.
Comments on speculation driving adoption from an Ethereum educator. I recommend reading comments as well:
Ironically, I actually unfollowed him because of his replies to questions in that thread 
lol thatās great
One long weekend from the forum has me feeling like Iāve missed an entire monthās worth of discussions!
Is there a reason why the foundation keeps 69 Bitcoin, that seems counter productive as a Zcash advocacy group. Considering that Zcash are at their all time relative low value against Bitcoin, now is as good of a time as any to make a statement of confidence in Zcash by trading those BTC in for ZEC. Iām sure that some tax obligations would be triggered by an action like that, I think the community would still rally behind the swap
You and I have each shared a lot of back and forth about this topic. Iām happy to see it being raised back into community awareness again. Poor Zcash price permanently damages adoption. It does so because it damages merchants who give goods or services in exchange for Zcash coins that subsequently create loss. The long term mission of Zcash cannot succeed unless the value of Zcash coins becomes a cyclical uptrend in value.
Iāll wrap up my thoughts on this thread because it seems to be getting obsoleted by the above. The crisis at hand since June 2022, and on going, is one that cannot be fixed by throwing more money at it.
It is a crisis that manifested because of a risk evaluation that never happened with regard to the potentially destructive (and cheap) attack vector of spam in the blockchain under the old fee mechanism. The money spend to resolve this crisis needed to happen a year or longer ago among the engineering teams. A risk manager was needed who could have identified the risk to the ecosystem, and then begun tracking it and planning about active mediation of the risk vectors. Obviously, none of that was happening because the engineering teams and risk managers (if they exist) where on other perceived high priority efforts. In my opinion the blockchain spam/ wallet sync crisis shouldnāt boil down to a finger pointing exercise, or a plea to double down on money allocation; it can only be viewed as an expensive learning lesson.
I think it goes to show that this is not about finding some kind of one single silver bullet of āsaving the ecosystemā, but that we need a coordinated effort that not only includes user facing technology, but also consistent work and auditing of the core protocol itself so that it does not collapse from underneath us.
Additionally, what also seems to be missing is funding earmarked for emergent ācritical issuesā for zcash, or atleast a process for community members to come together get funding to fix something in swift manner.
Take this example from the real world - when the pandemic hit - lots of governments dipped into their crisis/emergency funding budgets (that stacked over the years) to combat it. This existential threat was not combatted by using funds within the basic yearly government budget cycle.
Maybe Zcash should have something similar?