The Electric Coin Co. is all in on ZEC.
With company funding set to expire in about 16 months(!), we find ourselves at a crossroads. And although all our options have upside, the decision was easy.
Our nature is to push. To pull. To fight. And our path forward is clear: to double down on our mission — to empower everyone with economic freedom and opportunity — and to focus all our efforts on experimenting with, developing and evangelizing the Zcash cryptocurrency to that end.
Funding expiration and the future
For those unfamiliar, here’s the background. Funding for ECC (and the Zcash Foundation) comes from the community through the blockchain, where a small share of every ZEC mining reward is used to pay for R&D, engineering, global adoption efforts, security audits, trademark protections, regulatory relations and other initiatives. This source of income is scheduled to expire in October 2020, 16 months from now.
With roughly $3M in the bank today — and assuming steady ZEC pricing trends — the company’s operational runway is about 24 months. Without another funding mechanism, ECC will run out of money and cease operations.
Discussions about how (and whether) to fund the company beyond 2020 are ongoing within the community, and a variety of perspectives and proposals can be found on the Zcash forums. But without a model in place, ECC has to plan for what we know.
Slide from Zooko Wilcox’s Zcon1 presentation on the state of Electric Coin Co.
In light of this information, ECC CEO Zooko Wilcox presented three scenarios in his keynote at Zcon1 last month:
- The company can slow down, make some cuts and conserve cash to extend the runway.
- We can pivot our efforts and shift to finding and driving supplemental streams of income, like enterprise consulting.
- We can go all-in on ZEC.
“Let’s double down,” Zooko said. “Not shrink the team, but grow the team. Not do fewer things, but do more things. Because this is the moment to try to push Zcash further and faster in the hopes that this will work out.”
A variety of factors were considered in this decision, and a lot of it comes down to timing. There are indications that we are emerging from a crypto winter, and public awareness is at an all time high, spurred in no small way by Facebook’s Libra announcement and recent comments from the highest-profile business and political leaders in the world. Institutional interest is ramping up, and governments are making decisions about how they’d like to unleash and/or corral cryptocurrencies.
Now is the time for full steam ahead.
We trust the Zcash community will do the right thing with regard to funding ECC beyond 2020 (whether that thing is something we like or don’t like), but we can’t afford to wait. Sitting still is moving backwards.
So we are all in on ZEC!
Spending and strategy
Over the next year ECC is planning to spend about $1M each month, “which overwhelmingly goes to the salaries of people who are building the technology and promoting adoption,” Zooko said.
“We literally have the best team in the world, and that’s expensive.”
Spending the money the community has granted to the company is a responsibility we take very seriously. While the company has already published an extensive transparency report, Zooko’s presentation went further, providing insight about the goals and costs associated with driving Zcash adoption on a global scale.
For more on these topics and company strategy, Zooko’s full Zcon1 presentation, State of Electric Coin Co., can be viewed here.