
An impending funding crisis threatens Zcash - lordbtc
https://decrypt.co/7570/impending-funding-crisis-zcash
======
prepend
It’s unclear to me how much should go to founders of things like currency.
Shouldn’t the amount of funds to a dev team depend on some sort of measure of
value rather than a cut of all future tokens? That seems unsustainable and
part of the reason why a cutoff would be designed into the system.

I’ve been through a lot of discussions around what a fair price is to pay for
the devs of a community resource and I don’t think I’ve ever seen it resolve
well. A few examples I remember are plastic and kur5hin shutting down, digg
and reddit and slashdot for selling off with digg and slashdot going into
barebones ad models and Reddit doing whatever they’re doing.

One of the big disagreements I witnessed a lot of discussion around was how
much founders thought they should get just to run community resources and how
much the community wanted to pay. The most concrete I remember was the
plastic, or maybe it was netslaves, founder wanting $300/month to run the
servers. Not much at all, I think it was between 2000 and 2005. A few members
offered to run it for free and he wouldn’t do it because he also needed the
servers for his other projects. That spiraled into a boring discussion about
why a community would pay for some private servers.

~~~
lacker
The real problem here is that the compensation structure was initially defined
to give the dev team payments for four years and then stop. That makes sense
for stock options, when there are established mechanisms to expand the options
pool later. For a cryptocurrency it creates a big problem for you, that you’ve
punted four years down the road.

We’ll see if Zcash developers manage to fork into a coin that keeps paying
them to work on it, but I think the lesson here is to incorporate this up
front in the model. Any amount can be fair if it’s fairly communicated up
front.

~~~
jdsully
Shareholders don't expect to keep getting additional shares as time goes on.
The point is you increase the value of each share by improving the company (or
in this case the currency). They already have substantial ownership in the
currency - this should be sufficient.

~~~
lacker
Shareholders don't expect to keep getting additional shares, but employees do.
The main problem isn't that Zcash needs to incentivize shareholders, the main
problem is that they need to incentivize engineers to work on their software.

~~~
jdsully
Given the assets they have - the interest alone out to be enough cash to
employ their devs. ZCash doesn't throw off interest directly but wall street
is pretty creative at turning assets into cash flow.

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mindcandy
"Can the community save itself from the impending crisis" is a bit clickbaity
when the funding cut-off has been an explicit step in the plan from the
beginning.

------
rolltiide
This relies on - and takes advantage of - a lack of understanding on how these
organizations are able to operate

Drop all the currency terms and what you have is a product, a consumer good
sold to the public that some employees are given. The employees are free to
sell in parallel to the organization selling it.

When that runs out the organization still has 100% share ownership

So THEN it gets put on the same lower level of flexibility as startups and all
private tech companies.

So the answer is not that hard: it issues stock options to founders and
employees when the product sells dry up. This is not funding just
incentivizing, which the article and crypto industry conflates.

The organization and founders have been funding themselves by exchanging the
product for cash. LOTS of cash, for years.

The organization has an unknown amount of cash REVENUE from simply selling
Zcash from their treasury+mining, this is done on the open market

~~~
evian83
"A new lawsuit is sorely testing the Zcash Founders Reward model"

[https://www.finder.com.au/a-new-lawsuit-is-sorely-testing-
th...](https://www.finder.com.au/a-new-lawsuit-is-sorely-testing-the-zcash-
founders-reward-model)

"Ex-Employee Sues Startup Behind Zcash for $2 Million Over Unpaid Stock"

[https://www.coindesk.com/ex-employee-sues-startup-behind-
zca...](https://www.coindesk.com/ex-employee-sues-startup-behind-zcash-
for-2m-over-unpaid-stock)

~~~
rolltiide
what point are you trying to make? OP's article isn't talking about the
incompetence of ECC in making a stock option plan.

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dijit
Meta: I’m not fond of the trend with these huge banners. The view portal is
basically non-existent.[0]

Thank god for reader mode. It really seems to be essential, but this site
doesn’t even support reader-mode.

[0]: [https://i.imgur.com/jWA4pX6.png](https://i.imgur.com/jWA4pX6.png)

~~~
cududa
Literally everybody on this website agrees with you. These comments aren’t
particularly useful

~~~
dijit
Unless the author/designer of the site sees it as feedback no?

I’m glad people agree with me though. Though I f that were the case wouldn’t
there be an enormous push back against stuff like this in most circumstances?
I know hacker news isn’t all web developers but it would echo a wider
sentiment. Surely?

------
make3
who cares, crypto currency is a dumpster fire

~~~
dang
Please don't post unsubstantive comments here. We've asked you this before,
and if you keep doing it, we're going to have to ban you. I don't want to do
that, so please use the site as intended, described here:
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html).

~~~
make3
I apologise, you're right, I was having a bad day. I'm surprised though, on a
post with two downvotes?

~~~
dang
I'm afraid I don't understand your question.

~~~
make3
that you would threaten to ban for something that got two downvotes is
surprising to me

~~~
dang
Ah, I see. Well, moderation is orthogonal to comment voting. If a user is
breaking the guidelines, it doesn't matter how many points the comment has.
It's a bit like a constitutional democracy: the constitution part trumps the
voting part.

When we post something like "if you keep doing it, we're going to have to ban
you," that's because the account has a pattern of posting unsubstantive
comments or otherwise breaking the site guidelines. It's technically a reply
to one comment, because we have to hang it somewhere, but it's really a
response to a pattern.

That said, it's been a while since we had to warn you and your recent history
looks ok other than
[https://news.ycombinator.com/item?id=20126286](https://news.ycombinator.com/item?id=20126286),
so I can see why my comment came as a surprise. But it would be good if you'd
omit the really low-information comments and up the signal/noise ratio a bit.

