Owners of the Electric Coin Company (ECC), the same firm that founded Zcash, have agreed to donate the company to a new non-profit called the Bootstrap Project. The shift will come at an undisclosed date prior to the upcoming Zcash ‘Canopy’ network upgrade.
The Canopy upgrade is scheduled to take place in November of this year. According to ECC, the donation to the non-profit will help foster greater decentralization for Zcash and also provide tax benefits. However, recent regulatory interest in privacy-focused cryptocurrencies may also be driving the move.
ECC Owners Donate Company to Bootstrap Project
The shift to non-profit ownership of the ECC was announced via a blog post on Oct 12. The post claims that a majority 0f the owners of the Electric Coin Company agreed to donate the company to Bootstrap.
A majority of the investors and owners have informed us of their generous willingness to donate ECC in support of our shared mission to empower everyone with economic freedom.https://t.co/ho9nViwgrq#Zcash $ZEC
— Electric Coin Company (@ElectricCoinCo) October 12, 2020
The change in ownership will not involve an overhaul of the ECC’s current structure. Management, employees, and operations will all remain the same, but full ownership will transfer to Bootstrap.
The shift comes ahead of a scheduled network upgrade known as Canopy. Canopy will see changes made to Zcash developer rewards, which was due to expire in November 2020.
Under the community-agreed changes, ECC will continue to receive seven percent of mining rewards for the next four years. This is on the provision that rewards will not go towards fulfilling previous ECC work. They must strictly fund “furtherance of the mission” moving into the future.
Monday’s post claims that the hybrid “company/non-profit” structure will allow for greater community governance. However, it will also allow the ECC to “continue performing like a startup” commercially.
While Bootstrap’s Board of Directors will be the same as ECC’s initially, additional members will take positions by late 2021.
‘A Clean Slate’
According to a discussion on the Zcash Community Forum, the ECC donation to Bootstrap will be advantageous for a number of reasons. Among those mentioned are a better alignment of Zcash holder and ECC incentives, a stronger look for the cryptocurrency (seemingly less corporate control), and tax incentives, as the company currently pays tax on its developer fund rewards.
Also mentioned on the forum was the benefit of starting with “a clean slate.” Under this point, Zooko Wilcox, the CEO of ECC, mentioned that the transition to non-profit status would remove many legal ties between the former owners and the ECC. He stated that those relinquishing ownership will not have “ongoing control over or any responsibility” for the ECC’s future actions.
While ECC’s move to non-profit ownership may well provide the benefits mentioned above, Monday’s announcement comes shortly after news of greater regulatory interest in privacy-focused digital currencies.
As BeInCrypto reported at the beginning of October, Europol explicitly mentioned privacy-enhancing digital currencies and wallets as being a matter of concern. ECC, therefore, may have found board members more willing to donate the company in the face of a potential regulatory crackdown.