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The Zcash network is decentralized, self-funded and built with cutting-edge cryptography.
We have entered a new era for Zcash with the activation of Network Upgrade 6(NU6), which implemented a new Zcash development fund. The new non-direct funding model replaces the old direct funding model which was allocating 20% of all block subsidies between three entities: Zcash Community Grants, Electric Coins Company, and the Zcash Foundation. The new non-direct funding model or Lockbox Mechanism developed in response to community input and outlined in ZIP 1015, allocates 12% to a Lockbox, where the funds will accumulate until the Zcash community reaches consensus on a disbursement mechanism, ensuring support for vital projects driving Zcash development and adoption. Zcash Community Grants will continue to receive and 8% allocation for an additional year to fund community initiatives through grants.
In November 2019, Electric Coin Co. donated the Zcash trademark to the Zcash Foundation under an agreement that stipulates both parties must agree on any network upgrade that would create a new consensus protocol of Zcash. Zcash governance depends on community input. The trademark agreement prevents either party from taking action that is blatantly contrary to the clear consensus of the Zcash community. “Clear consensus” is determined through community polling within and outside of the Zcash Community Advisory Panel (ZCAP), a group of volunteers with extensive interest and/or knowledge of the Zcash ecosystem. On-chain voting and coin-holder voting has been discussed for future consensus-gathering mechanisms.
Read more about the trademark agreement.
As of November 2024, 80% of the Zcash block reward is distributed to miners, 8% is distributed to the Zcash Community Grants Committee(ZCG) to fund independent teams in the Zcash ecosystem, and 12% is distributed to a "lockbox" - a pool of issued funds tracked by the protocol. With no disbursement mechanism currently defined, the Zcash community will need to decide upon and specify a suitable decentralized mechanism for permitting withdrawals from this lockbox in the future to make these funds available for funding grants to ecosystem participants.
In addition to Zcash Community Grants, community platforms and initiatives provide Incentives for developers and teams to fix bugs, increase efficiency, improve UX, pitch ideas, and build out applications.
As a protocol, Zcash is governed by the Zcash Improvement Proposal process. The ZIP process provides an open venue and structure for collectively evaluating changes to Zcash.
Anyone can submit a draft ZIP. Draft ZIPs are debated by the community at large, then accepted or rejected by the ZIP editors. Currently there are two ZIP editors — Daira Hopwood represents the Electric Coin Company and Deirdre Connolly represents the Zcash Foundation.
Decisions from the ZIP process are written into the Zcash specification, as well as the software that runs the network. The changes are “ratified” on-chain when the majority of the network adopts the upgrade and doesn’t break consensus.
We encourage community contributions and decentralization of work on the Zcash protocol. The process for proposing and creating a new ZIP is documented in ZIP 0 at the link below.
Zcash is cash
for a new era.