The future of Zcash in the year 2020

It’s a shame that no one in the community who has invested in Zcash is in profit (largely due to the ridiculous inflation curve), because now it will be very hard for anyone to convince the community to fund ongoing development.

It seems like not only did the majority of investors underestimate the effect of the inflation curve, but so did the Zcash team.

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The Bitcoin distribution model has worked fine for Bitcoin, plus the first Zcash halving is next year.

Simply because speculators didn’t calculate the possible effects of the supply curve is a poor basis to make a decision on the funding of future development efforts.

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You didn’t get the idea. It’s not about speculators in this case. It’s about that currently due the high inflation the founders reward is worth less in US$ than it would with a way lower inflation/issuance …

Fine, great if everybody is happy with the high inflation/issuance. As it worked fine for Bitcoin why not copy their funding model as well because it worked as well more than fine for them, obviously! At least i’am not aware that they need even a founders reward…

Edit:

I would go even as far as concluding that ECC didn’t calculate the possible effects of the supply curve for their own reward/funding neither the impact of lower ZEC prices…

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Create an infrastructure for a coin with a dev fee and this will be a way out with financing.

Initially, zcash had the concept of “electronic cash” and development for 4 years and then it is unknown and I think that the community had to decide, now the concept has changed “company gives you a product” that needs to be maintained for uptime, but asks for it to expand development fees over 4 year period.
The proposal may be as follows:

  1. Wallets (workers) with dev fee
  2. payment in the browser (extensions) with a dev fee
  3. The company enters into a contract or organizes the exchange service zcash for currency for everyone (yes, this is an exchange or exchange), from which it receives a percentage.
  4. Deductions are extended (remuneration of the founders) for another 4 year period, but the percentage of deductions should be less, for example 0.1-0.3%.

The point is that if you provide a product then it should be convenient to use this product, in particular, the idea of ​​cash on the Internet, give the conditions necessary to start, and the improvement of the conditions of use (adoption) will be on a third party who wants to work with zcash.

There is also a simple solution: to cancel the POW and make the distribution of the entire remaining amount of coins that has not yet been mined between the founders of the ECC and the foundation.

Google Translate-

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Is it possible to have sort of a clear and concise info-graphic of the timeline of the founders reward accrual and its value at like $50 a ZEC (to play it conservatively), along with the development due dates on the same time line to see whats needed and/or whats missing? Just some visible numbers and conservative expectations would be a great start to find a solution.

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Community needs to keep following things in mind before they decide to support monetary changes

  • Parity is expected to build/launch their zcash client in 2020 (around the time FR rewards are expired). Parity client most likely won’t have dev fund like their Ethereum client
  • Miners, users and investors dislike monetary changes after initial launch because they fear coin scarcity/supply can be changed in the future as well.
  • Exploring other options for funding developers:
    • Enable miners to offer their share of mining rewards to devs. So, it is up-to miners.
    • Introduce dev transaction fee (split mining fee into two), and/or give miners the power to disable it.
    • meta idea: To avoid ZEC price fluctuations, dev fund (optional/mandatory) can be fixed USD value per month using ZECUSD price coded in zcash client. Additional knobs can be added if ZECUSD crashes so that miners still get majority of block reward and transaction fees.
  • Explore ZIP based funding (in other words milestone based) with unlocking majority of funds when ZIP implementations are deployed. Authors, implementors and everyone involved should get rewards per ZIP. Rewards could be proportional to value and impact of those ZIPs. Example: “fully shielded”, “succinct blockchain” etc., All of this can be enabled by users and miners who run zcash. Makes perfect alignment b/n users, miners and dev.
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Calculating the Founders Reward in US$ value:

Founders Reward is 43,200 ZEC for 30 days.
The monthly ZEC prices are average prices for the given month in US$.

2016 November, average $60 = $2,592,000
2016 December, average $50 = $2,160,000
2017 January, average $43 = $1,857,600
2017 February, average $30 = $1,296,000
2017 March, average $53 = $2,289,600
2017 April, average $72 = $3,110,400
2017 May, average $139 = $6,004,800
2017 June, average $320 = $13,824,000
2017 July, average $218 = $9,417,600
2017 August, average $234 = $10,108,800
2017 September, average $220 = $9,504,000
2017 October, average $236 = $10,195,200
2017 November, average $290 = $12,528,000
2017 December, average $450 = $19,440,000
2018 January, average $561 = $24,235,200
2018 February, average $416 = $17,971,200
2018 March, average $275 = $11,880,000
2018 April, average $236 = $10,195,200
2018 May, average $286 = $12,355,200
2018 June, average $190 = $8,208,000
2018 July, average $185 = $7,992,000
2018 August, average $156 = $6,739,200
2018 September, average $127 = $5,486,400
2018 October, average $119 = $5,140,800
2018 November, average $101 = $4,363,200
2018 December, average $61 = $2,635,200
2019 January, average $55 = $2,376,000
2019 February, average $51 = $2,203,200
2019 March, average $54 = $2,332,800
2019 April, average $65 = $2,808,000
2019 May, average $64 = $2,764,800

Total for past months: $234,014,400‬

If we take for the remaining FR todays price of ~$70 additonally $3,024,000 per month are added. Means again that an estiminated $51,408,000 until the end of the Founders Reward are issued.

This makes an estiminated Total Founder Reward of $285,422,400 or 285M or over 1/4 Billion US Dollars.

I yesterday guessed it might be over 200M, but didn’t really think it was that much at all. Now the question should be should/could someone await that with $285M funds a product should be flawless finished and top notch?

Just as a sidenote after thinking about that huge number. A year ago radix who developed and maintained the only windows wallet than back had to beg for some ZEC from the community …

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As mentioned earlier, neither the founders, nor the foundation, nor the company need to do anything, they get the money anyway, this is not fair. If the price of the coin will be reduced, then 43200zec will not be enough for 30 days, to cover basic expenses and even more so after being cut by 2 times in October 2020, what to do then, increase the share of the founders to 50% or more? then it’s easier to immediately make a premaine for the rest of the amount and close the question, spend money for 1 month or 2 and start from scratch.Can someone from the responsible persons comment on the lack of desire to increase the price of a coin? Why there is no powerful marketing and promotion of your product to the masses?

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Totally agree with it :white_check_mark:

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Parity is only developing the client to the point of it syncing with mainnet, and it will be the Zcash Foundation’s client to develop and maintain once that work is complete (source). The ZF does benefit from block reward funding.

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I would like to know where all this money went?
The company holds $5M worth of USD and ZEC. What about the other $229M? Is it all distributed among founders, employees and seed investors?

I did not see million dollar marketing efforts. Okay, an expensive coinbase campaign during the coinbase scandal. How impressive!

You spent hundreds of millions in two years? Wow! What a great misalignment of funds. This is multiple times the funding that Ethereum received and look what they did with it. ZCash is afaik in the top ten of the most funded projects in crypto.

Where are the results? I do not see adaption and use of ZCash anywhere. Basically nobody uses z-addresses. Users and the crypto community in general are way more enthusiastic and confident about monero. The market is showing this as well.
Instead of getting more potential users on board, they got scared off by hearing from the CEO of ECC that “making Zcash too traceable for criminals … but still completely private & fungible” would be totally doable and a great idea.

So how many millions exactly went into R&D? Why you did not plan ahead with so much capital and secure funding of R&D for a way longer timeframe? With so much financial power you would be able to do so for sure.

What justifies such high salaries and compensations for a startup that is not even succeeding?

I (as an investor an long-term supporter) am just speechless and this so called “Transparency Report” was just the final straw. Good luck!

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That amount assumes that the ECC hasn’t been researching, developing and improving the protocol since the start (they have).

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I find it suspicious that the topic of further funding was started now that Zcash price has started to recover. You knew that this is a controversial topic, yet you started it now, more than a year before halving, and when Zcash price finally started going up. Its like you want the price to go down, so you can find an excuse to complain how lack of funding is slowing the progress (yet like boxalex made a point $234 Million so far was paid out to you and founders).

Now I must say, I do not care that the piece of mining rewards is taken from ASIC miners. This is their problem, not mine. They don’t have a lot of choice with their hardware equipment anyway. They are trapped and will mine as long as their electricity price is lower that what they earn.

What I do care about is lack of interest of both Electric Coin Company and Zcash foundation in both price and marketing efforts. Price is what determines how much funding you have for further development. EEC is a for profit organisation, and should very much care about the price as well.
Marketing and promotion of adoption should very well take 60% of your budget, instead you reduce it.
Adoption wasn’t the problem when GPU miners were on network. They were promoting it for you. Now it’s your job. Just look at worlds biggest brands and see how much they spend on marketing (Coca Cola, Nike, Mc Donalds, Apple, Amazon etc.).

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ZA[quote=“ChileBob, post:93, topic:32372”]
new tech not related to privacy should be licenced to other projects, not given to the world but become a new revenue stream.
[/quote]

There is not a question about where to get money, main question - if you can’t spend money efficient, sorry but no money for you.

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Sounds very honest I think!

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I started this thread back in January, check the first post. It has nothing to do with the market price of Zcash.

The issue was that since launch we have known funding would end in 2020 but nobody was talking about it, so I started this thread to spur the conversation.

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Yes but it was “restarted” by nathan and zooko 2 days ago.

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:point_up_2: Probably because there is only so much time left before it will be too late to make any changes. Doing nothing will be a choice.

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I’am pretty sure the guys/girls in charge can make a re-organisation of their “personal” rewards without a ZIP and NU4. All it takes is some re-organization, shifting of funds from personal rewards to tech/marketing/foundation/R&D/etc. funding.

But it seems these options are TABU, but milking the miner cow is preferred.
Some posts ago i made several suggestions/proposals. Someone from the foundation can ZIP, NIP and NUP them as a proposal (if someone cares there of course!).

Doing nothing isn’t the only option, obviously! Doing something should begin with self reducing funds and allocating them, enough the founders/employees/advisers/investors/whoever have an interest in continous funding.

What’s the foundations CLEAR stance on this by the way? At the end of the Founders Reward estimated nearly 300M have been issued which for sure is good (in my opinion) for a TOP 5 funded Project. At least i’am not aware of many that had more funds available.

Actually you know it since 2016 that funding will end 2020. And it’s not correct that nobody is talking about it. I mention it about in every 3rd post i make. Just nobody cares about it would fit better.

After we know it ends in 2020, even more interesting that nobody in charge, including the foundation, takes a clear stance, action, plans… Just nothing…

Just think about it: A company that got over 1/4 BILLION dollars runs out of funds in just 4 years with a half ready product. Damn, who the hell is agreeing to continue a Rewards Fund that obviously mainly was used for everything else but not to finish/market/adopt the prodcut itself???

Not hearing much from the foundation doesn’t build up much trust either in my opinion.

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The transparency report, as well as the original funding blog posts before launch (1, 2), provides all this information - in particular it is clear that the company did not ever own the entire FR, and it is disingenuous to claim so. The dilution event described in the transparency document is a good example of how the FR allocations could be changed, and as described there it requires the FR recipients to agree; it is not something that ECC could unilaterally decide on.

[Note: I’m just an engineer, I wasn’t involved in any of the setup of this, and am going entirely off what has been publicly stated. I’ve also summarised this repeatedly in this forum and other places, so I think this will be the last time I do so personally.]

Over the past 2.5 years ECC has received around 12% of the FR for its operations, and the Zcash Foundation has received around 15% (technically less because investors received all their FR in the first year). That means (going on the numbers a few posts above) ECC has received on paper roughly $28M, assuming that:

  • it sold all ZEC it received,
  • as soon as it received it,
  • and that it was able to get the given price for all ZEC.

The transparency document indicates that ECC’s monthly expenditure for the second half of 2018 was around $700k. Let’s conservatively assume that over the 2.5 years since launch (so excluding all the expenditure pre-launch, when there was no FR being received) that the average monthly expenditure was more like $400k. That amounts to $12M spent on operating costs. The declared cash+ZEC on hand takes that to $18M. Then on top of that there are the one-time costs (multiple audits, investments, the Coinbase Earn campaign, etc.). The remaining gap narrows considerably if the conservative assumptions (both on expenditure and received funds) are relaxed.

I think it’s perfectly reasonable to discuss the original split of the FR, particularly from a “how could Zcash / future projects improve on the model” perspective given the data we now have on how the current FR has worked out. I’m really glad to see other projects (such as Beam) trying variants on the theme to find a sustainable way to develop widely-beneficial open-source projects. I think we all benefit from using the published data we have available to inform these discussions.

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