Zcash Rallies as Changes to Mining Rewards Are Voted In

  • 30 January 2020, Thursday, 08:00
Zcash Rallies as Changes to Mining Rewards Are Voted In
Source: iStock/NKTN

One of the best-known privacy coins, Zcash (ZEC), has jumped on the news that its community has said 'yes' to changes to Zcash mining rewards, meant to support the coin's development.

ZEC has gone up 12% in the past day, 30% in a week, and a whopping 132% in a month, landing on USD 66 (at 10:21 UTC). The 25th coin by market capitalization of USD 578 million started rallying already at the beginning of January, dropping somewhat several times on its appreciating path, but then making a higher comeback.

ZEC price chart:

The rally seems to be the result of the new methodology for distributing network mining rewards being voted in by the Zcash community, in order to support the development of ZEC, following the expiration of the current reward system in 2020. The poll, concerned with ZIP (Zcash Improvement Proposal) 1014, has ended, seeing the support of the majority of voters.

With 88 votes cast, the decision is as follows: if the Zcash Foundation and the Electric Coin Company (ECC; a ZEC supporter) agree, as of block 1046400, coinciding with the first scheduled Zcash mining reward halving this November, 80% of the mining reward will go to miners, 7% to ECC, 5% to the Zcash Foundation and 8% to grants, according to a blog post by ECC's Josh Swihart.

Since its launch in 2016, the post explains, 80% of mining rewards were allocated to miners, c. 15% to a group that included investors and founders, and c. 5% to ECC to fund core support functions. It adds:

Grant participants will receive the largest portion of development funds which will further decentralize Zcash-related efforts. Stipulations were also introduced for formal accountability and reporting requirements of each participant.

As for what's to come, neither the Foundation nor ECC can make a unilateral decision regarding a Zcash chain, nor can one of them override the community's will. If the two agree on the final ZIP that reflects the community’s will, that ZIP will be codified in the network upgrade scheduled for activation in November. "The final ratification of community sentiment will happen at the time of activation, when the community opts into the network upgrade," says ECC.

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Chris Burniske, partner at the crypto-focused venture capital firm Placeholder, that has also invested in Zcash, tweeted about it, saying this coin will be remembered as one of the most oversold in 2018/2019.

Now that we know @ElectricCoinCo will continue to get funded & 3rd party devs will have access to 40% of non-miner block rewards, it's nice to see the market buoying $ZEC (> 2x in 1 month). We'll look back on $ZEC as one of the most oversold quality coins of the 2018/2019 bear.

— Chris Burniske (@cburniske) January 29, 2020

Some of the rivals criticized the project. Riccardo Spagni, a member of the privacy-oriented Monero Core Team, argued that it's not possible to know if there are any sockpuppet votes among those cast for the ZIP, saying that "Zcash have literally thrown out their social contract on that basis. I suspect that the market will prove to be rational, remaining disinterested in a centralized science project," he said. Swihart, however, replied that the debate on the funding lasted for over a year.

Hi Leon. Trusted setup is tied to performant zero knowledge cryptography, for now. Governance of Zcash development funding was broadly inclusive of its community, though not perfect. Final ratification happens when people choose to use Zcash after consensus rules are activated.

— Josh Swihart (@jswihart) January 30, 2020

Learn more: Who Funds Bitcoin Developers? Bitcoin Cash Dev Tax Still Might Go Live Despite Roger Ver Revokes Support

Source: cryptonews.com