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Revelation of Zcash CEO's $300k a month goes down badly

01 Jul, 2018
by David Robb
News
Revelation of Zcash CEO's $300k a month goes down badly

After the news broke that Zcash's CEO, Zooko Wilcox, earns $300,000 a month, a minor scandal has been caused on crypto social media. Many are criticizing the lack of compensation for miners and other important contributors, as well as the system itself.

Wilcox's huge $3.65 million annual salary is part of the founder's reward system, a portion of the Zcash code that allocates 20 percent of the ZEC generated by mining to company stakeholders. 

His salary accounts for 0.9 percent of the overall founder fee reward. The remaining 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.

Many allegations of excessive centralization have been levelled at cryptos with this kind of governance. The reward even led developer Rhett Creighton to fork off from the main blockchain and create an independent version, Zcash classic.

However, there are benefits that come with the founder's reward system, and huge founder's salaries could be seen as just a by-product of this. According to Clovyr Amber Baldet, it binds founders, developers, and coin holders together to a shared fate. "The Zcash Company is incentivized to perpetuate its own existence, acting in good faith and keeping people wanting to use the currency. They're not incentivized to undermine the currency in some way".

"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," Coinmetrics' Nic Carter told CoinDesk.

As for Wilcox, he believes that many cryptos have similar centralization issues, and Zcash has just been more open about them, in a way that can benefit the crypto space. "I would like if the outcome of this controversy would be to trigger people to investigate and publicly talk about the equivalent composition and equivalent power structure in all the parts of this industry", he said.

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