The Zcash team has announced details of their funding, incentives, and governance plans. Last month the Zcash Electric Coin Company released the source code and had established a Testnet for the new digital currency that is very much like bitcoin in model but with more attention to privacy.
Although Zcash is being built by the company, they insist that nothing in Zcash is "proprietary or closed. Zcash is a fully open system", of which proof can be found on GitHub.
Like bitcoin, only 21 million Zcash will exist. They've tagged themselves with the ZEC symbol and also a ⓩ. We reported last month on the Zcash "dream-team" of investment, staff, and advisers involved on the project and like all investors these guys expect some sort of return. The plan for that has been outlined over the next four years.
Every four years Zcash will halve (much like bitcoin does) its block rewards however for the first four years the rewards will be at a full 50 coins of which 10% will go towards a founders reward fund and subsequently all those with a vested interested of some sort and undoubtedly a written contract.
At least it's not going to be a pre-mine. For those unfamiliar, pre-mining is the process of mining blocks of coins before the code is release to the public for public mining and is frown upon in the industry. Block rewards are a specified amount of coins (like bitcoins but in this case ZCash) that are rewarded to a miner as incentive to support the network, and a miner being the processor(s) dedicated in part or fully to supplying its computing power to the network of which the reward is given.
After the initial four years of 10% going to the founders reward, the remaining years and block rewards will go to the miners 100%. This comes to 2.1 million coins to founders, and 18.9 million in mined Zcash handed out in degrading block rewards over time (see right chart above).
With this approach, the founders are incentivized to support Zcash for the long haul (at least for four years), and they have limited ability to pump-and-dump - Zooku Wilcox, Zcash
In a nutshell, if the coin does well, they have a longer-term incentive to hang around and provide a little support rather than jacking up the price in the beginning and vanishing into the wind as we've seen with all to many other coins in the past and the very reason why the aforementioned pre-mining practice is frowned upon.
You can learn more about Zcash on their website.
Story by dinbits
image by dinbits staff