That’s how much Zooko Wilcox, CEO of the Zcash Company, earns per month from the $650 million zcash cryptocurrency network he helped create. Worth $305,000, or $3.65 million annually, the details of his salary, revealed by Wilcox in a presentation at Zcon0 Tuesday, have sparked somewhat of a scandal on social media.
“I really did this whole ‘starting a cryptocurrency’ thing wrong, didn’t I?” Jackson Palmer, founder of $260 million cryptocurrency dogecoin, tweeted.
It’s a notable critique, as in the past few weeks, an independent zcash wallet developer went so far as to threaten to “rage quit” and split the blockchain in the absence of further funding from the community. Central to his issue was the lack of monetary contributions he was receiving for his work, which as the response indicates, was necessary for the safety of the network.
Still, while the specifics of Wilcox’s salary were not widely known, what was previously public was that in the zcash code is what’s called a “founders reward,” a portion of the code that allocates 20 percent of the ZEC generated by mining to company stakeholders.
Because it relies on transaction fees to pay out employee and investor salaries over time, the reward has been harshly criticized since the blockchain’s inception (with words like “scam” and “shitcoin” thrown around liberally.)
It even led bitcoin private’s Rhett Creighton to fork the zcash blockchain days after it went live, to forge a new, founder reward-free version called named zclassic that is now valued at $30 million.
Distinct from other funding models that have been tested in the industry, such as the ICO, the pre-mine and the so-called “fair launch,” the founders reward was programmed to run for four years, modeled on the Silicon Valley vesting schedule.
“I think experimental side of this stuff is appropriate, and should be encouraged, but many people in the industry are very ideological, and prefer the cypherpunk ideal of the fair launch,” Nic Carter from Coinmetrics told CoinDesk.
Revealed Tuesday, Wilcox’s $3.65 million annual salary accounts for 0.9 percent of the overall founder fee reward – the further 19.1 percent is split up between the Zcash Foundation, the Zcash Company and 44 other founders, investors, and advisors, with 80 percent of the total issuance going to miners.
“As far as his percentage you have to remember at the time it was decided we didn’t know what the price would be,” Hudson Jameson, a communications officer at the Ethereum Foundation, told CoinDesk.
“That’s where the hysteria is coming from, because it turns out that if he was cashing out everyday he would be making millions.”
Due to the funding model, it’s resurfacing allegations of centralization in the Zcash Company, the primary entity tasked with maintaining the code base.
“As long as zcash corp runs the show, it will either get shut down by US [government] or co-opted,” Howard Chu, a monero developer, tweeted on Tuesday.
Citing research that shows zcash’s use of transparent transactions weakens privacy, bitcoin developer Peter Todd said this was a “sadly predictable” outcome of zcash’s initial roadmap, which included transparent addresses for the sake of adoption.
“Zcash’s focus on launching their currency and repaying investors rather than actually providing by-default anonymity may result in a ZEC user being deanonymized,” Todd tweeted.
Still, over the past two years, the Zcash Company has used the reward to improve its tech, making the previously unwieldy shielded transactions small enough so that they can compete with transparency. Plus, the paradox of relying on a centralized company for the development of a decentralized cryptocurrency is a conflict that is being actively questioned by the zcash community.
“Is zcash an open-source product or the software product of a company? Answer is it’s both.” Wilcox said at a fireside chat on Wednesday.
Wilcox continued by emphasizing the importance of consent, and that users that choose to run zcash are opting in to both the founders reward and the ethos of the company as well. “Switching to monero is always an option,” Wilcox told the audience.
Plus, Wilcox told CoinDesk, the trust burden is minimized by the fact that it is all open-source and verifiable code.
“The reason you can rely on the privacy of shielded addresses is because it’s open-source software, that’s what protects your privacy, it’s not because you’re trusting the Zcash Company,” Wilcox said.
And there’s distinct advantages to the governance structure as well.
“Zcash chose to align themselves with a slightly more corporate governance structure in exchange for these immense benefits which are coordination benefits, and the ability to actually have cryptographers on staff,” Nic Carter told CoinDesk…