The Zcash Company, or the Electric Coin company that runs Zcash, is in the process of shifting towards a non-profit status called the Bootstrap Project after most of the shareholders chose to donate their holdings to the company so let’s read more in today’s Zcash analysis.
The Electric Coin Company said in a blog post that the vote will be made official later this month:
“A majority of the investors and owners have informed us of their generous willingness to do this in support of our shared mission to empower everyone with economic freedom.”
The stockholders’ donation comes as the international governments looked askance at the privacy-based technologies like privacy coins and wallets. The ECC will continue operating under the same business structure as Bootstrap acting as an umbrella company of sorts. Bootstrap will be helmed at least initially by the ECC board of directors as the Zcash and Zooko Wilcox, the ECC CEO said. The Zcash network is maintained by the ECC independent developers and the Zcash Foundation.
A date for the ECC donation to Bootstrap didn’t specify anything but it is aimed for around the network’s November hard fork, Canopy. The ECC has 24 investors, like the Paradigm Capital co-founder Fred Ehrsam and venture capital firm Pantera Capital. The donation will free up cash flows for the ECC which has continued to operate in the red despite the 160% year-to-date increase in the ZEC price.
Under the Zcash founders’ agreement, the company receives 5% of miner revenue for developing the encryption technology backing the crypto asset. The ECC portion of future mining revenues will rise to 7% under the canopy as it was initially agreed upon in the Zcash Improvement Proposal in 1014 back in February. At a higher level, the donation will allow the ECC to embrace a central plank in ZIP 1014 as of all future mining revenue furthering Zcash’s potential as an asset and not to enrich the founders of early investors. Everyone involved in the project’s 2016 launch garnered 15% of mining revenue under the old scheme.
Observers on the market, the move could be in keeping with the decentralization ethos which is designed to keep the regulators at bay. Deal Ninja Attorney Gabriel Shapiro said that the shift to non-profit status was “potentially preferable to the status quo muddle of having a non-US foundation and a US development company with unclear rules of engagement between them.”
Wilcox said that the ECC transition to a non-profit was “in alignment” with the stipulations of the community. Pantera Capital’s Franklin Bi said that the company chose to donate its ECC shares because it was in the best interest of the Zcash community:
“[It’s] less about the tax benefit, but more so about the community.”