Electric Coin Company is making changes to its Zcash funding approach to prioritize decentralization. The firm behind Zcash cryptocurrency, Electric Coin Company (ECC), has announced a shift in its funding strategy for the token. This move signifies a departure from direct protocol funding and emphasizes the importance of decentralization as the current development fund, established in 2020, is set to expire later this year.

In a statement released on May 1, the Colorado-based company expressed concerns about the current funding model, known as the “dev tax,” and emphasized the need for community-driven initiatives to shape the future of Zcash. ECC CEO Josh Swihart stated, “Some love the development fund model, and some vilify it. To many, it became known as the ‘dev tax.’ Recently, I have publicly expressed criticism of the model as currently designed. Regardless of our own opinions, we are not beholden to the past.”

As the development fund approaches its end in November, various Zcash-focused initiatives face uncertainty about their future. Swihart mentioned that the current funding model may not provide adequate support for these organizations to sustain their operations as before. He stated, “In November, the amount of block rewards will be cut in half. If ECC and the Zcash Foundation were to continue to receive the same allocation as they do today, the proceeds would be insufficient to meet either’s financial needs at the current price of ZEC.”

In response to these challenges, ECC has decided not to accept funds directly from the protocol under a new development fund. The firm’s wallet address will no longer be encoded in the protocol. ECC has proposed two options for the Zcash community: allowing the development fund to expire or transitioning to a grants-based model that would enhance decentralization and community involvement in decision-making. Following the announcement, ZEC price surged by nearly 10% to $22.8, according to data from CoinMarketCap.

For more information, Grayscale is looking to launch a new ETF tracking privacy coins like Zcash.

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