[Note since posting the original version of this i article have updated it to be more constructive and focus solely on the ideas put forward, and not on any particular individual]
ZCon3 was bittersweet for me, not because i couldn’t attend in person, I’ve watched enough hours of youtube replays that i can safely claim i was there in the metaverse, all i was missing was a VR headset and an AR version of punk6529’s Open Metaverse (OM) so i could walk around in between talks and mingle with all the other attendees.
The real bittersweet point was this town hall https://www.youtube.com/watch?v=ZOvbZWy3aug specifically these two comments:
“We are not here to add value to ZCash holders” - Peter Van Valkenburgh (ZCash Foundation)
“I think coin holders are one of the lesser rung stakeholders we should be caring about” - Hudson Jameson
And instead of going on a drunken late night twitter tirade i've put my thoughts into this article, so i hope i can add some depth to the conversation from a different point of view that it seems the ZCash Foundation is lacking from their board
The ZCash Community & Its Governance Structure
The ZCash community is now pretty obviously well on the way towards what Balaji would call a network state. Zcash is a decentralised community of people who own ZCash all over the world, and we all believe in a singular mission:
- Privacy is a right for holders of all digital assets and all people operating in the digital sphere
We are complete with competing political entities (Electric Coin Co & Zcash Foundation). We pay taxes (The Dev Fund) to our state, the only thing that is missing is that we are not a democracy and there is no way for the citizens (Zodlers) to hold those governing bodies of our community accountable without leaving and abandoning the community entirely.
Watching and hearing from the people involved in the governance of ZCash hit me for six. I was witnessing the reason ZCash keeps failing. We somehow built a governance structure that is self sabotaging and this is why ZCash never seems to get the love, attention, or adoption it deserves.
I truly believe it is one of the best pieces of tech in all of crypto, and the people involved are the most honest, passionate, genuine people really trying to make a difference on a really important issue, and this is what got me upset, because it is our own fault, we have unconsciously been shooting ourselves in the feet.
What is our Problem?
Somewhere along the way we have forgotten what our real mission is:
- Build the world’s best privacy preserving blockchain
- Create a vibrant community of developers building applications working in conjunction with and supporting this blockchain
- Add as much value to current ZEC holders as we can
- Add as many new ZEC holders as we can
(Ps if you solve for 4 you end up also solving for 3 automatically)
We’ve somehow got so far down the altruism rabbit hole of trying to help this minority and that minority that we’ve forgotten the very people who got us to where we are now.
We’ve also missed the fact that not only do current ZEC holders want an increasing price, but so too do potential ZEC holders in disadvantaged countries like Venezuela, Argentina & Zimbabwe. They’re looking for alternatives to their home countries fiat currencies because they’re devaluing so much, why would they pick another depreciating currency? They want an appreciating currency.
We need to take a page out of punk6529’s book and look at how we can reframe our goals so that as a community we care about everyone, and strive never to leave anyone behind:
WAGMI “We All Gonna Make It!”
Yes, the ZCash price might not be important to all people in the community. Some people might be here for the technology and how it could be used to help disadvantaged people around the world but that doesn’t stop them from realising price appreciation is still very important to many many others in the community, and that it is necessary to include this in the decision making process in order to do a truly good job in the governance of ZCash
We need there to be less flippant comments along the lines of, we are here to care for and help Group A, but you are from Group B so we don’t care about you
Why is the ZCash Price important?
Crypto has ushered in a new phenomenon, the financialisation of everything. Blockchains by their very nature, are an order book of everything occurring on their network that allows a more efficient marketplace to operate. This has brought much better alignment between entrepreneurs and their customers. It is as if Facebook was owned by every single user, in proportion to the amount they were invested in using the product, instead of by an unrelated group of people called shareholders.
The market capitalisation of blockchains, i believe in the not too distant future, is going to be used as the successor to GDP as communities coalesce around blockchains into the network states Balaji describes in his book.
However the best way i’ve found to think about this doesn’t come from Balaji at all, it comes from Raoul Pal, and his thesis on blockchains being valued based on their network adoption, being a direct representation of Metcalfe's law.
People will vote with their patronage, if you are doing a great job, they will use your blockchain, if you are doing bad job they will go and use a different one. The effect of this is that the better blockchains will have more users and their price will be higher, bad blockchains will see users leave and their price will be lower. When you apply metcalfe’s law to this, what you find is that the value of the network grows exponentially in proportion to its user growth, either exponentially higher as people join, or exponentially lower as people leave.
What are the risks if we don’t care about adding value?
This argument that Zodlers already have enough power, the power of exit, and that they could leave and it would send a signal to those governing ZCash means they only have 1 of 2 options:
- Stay and put up with bad management and performance
- Leave and abandon something you really believe in
What happens if they want a 3rd option, to stay and fight to save ZCash from mismanagement?
There is a running joke in crypto regarding ZCash, all crypto projects create massive amounts of value, from the Bitcoin & Ethereum millionaires, the Solana and Dogecoin millionaires to the Punk & BAYC millionaires, but all ZCash has been able to do is destroy value, from its all time high at its founding of $3,191.93 USD back on 29 October 2016 (almost 6 years ago) to its all time low of $19.75 USD on 13 March 2020 (Only 2 years ago) and the sad fact that it currently sits at $76.04, far far closer to its all time low than its all time high. Zcash has only gone backwards.
Looking at the price trajectory of ZCash how much more of a signal do those governing ZCash need? The price is very much down only. How can you look at the ZCash price graph and say yes we’ve been doing a great job adding users to our network?
How low does the ZEC price have to get before those governing our community think, ok this clearly isn't working, let’s try something different.
Assuming we are correct, and ZCash does have the best technology when it comes to privacy preserving crypto blockchains, and given the ZEC price trajectory so far, we can be certain that it is something else holding it back, and in my opinion it's the unfortunate conscious decision by those in control at the ZCash Foundation that price doesn't matter.
We cannot let ZCash lose in the same way Betamax lost to VHS
If no one uses the ZCash technology everyone’s efforts will all be in vain and it will forever remain irrelevant that it was better, because if no one uses it no one benefits.
In order for the mission to be complete, you need to do both:
- Create the best technology
- Have mass adoption
Price won’t tell you if your crypto project has the best tech, but it will tell you which one everyone is using the most.
Just as Punk6529’s thesis that 100K active OM (Open Metaverse) users won’t be enough to beat Zuckerberg’s Closed Metaverse ambitions and that it will take 100M active users to stand a chance.
100K Zodlers v the Global Banking Establishment is doomed to fail, but 100M Zodlers + 100MMoneroites + 100M TornadoCashers might just pull it off.
Where do we go from here?
If the ZCash Foundation continues to treat ZEC holders as lesser rung stakeholders and look down on them, with what feels like to the ZEC holders as contempt, they will continue to leave, like citizens fleeing Afghanistan for anywhere else that will take them, or like Californian’s fleeing to Texas and Florida.
ZCash is not just some pet philanthropic project for a few activists in the USA who’s only metric for success is how good they feel about themselves for spending other people’s money taxed through the dev fund.
There are 3 main options for Zodlers who feel the way i do, that i put in order of ease of execution:
- Vote with your feet, sell your ZCash and buy Monero (Inferior tech yes, but their governing bodies actually care about their network state citizens, XMR holders)
- Wait until 2024 and at that point be part of the movement to remove the ZCash Foundation from receiving any more of the Dev Fund (You could lose this battle and be left with only options 1 or 3 anyway so it could prove to just be a waste of time)
- Fork ZCash into another chain that has better governance and looks after its network state citizens (Also not ideal as this fractures the community and makes it more difficult to achieve our ultimate goal)
Now to be perfectly honest, i don’t like any of these solutions, i would much rather the most difficult solution below (which is the reason i wrote this article in the first place):
- Contribute to helping the people governing both political parties of our ZCash network state (ECC & ZF) realise we are on the same team, show them that they are the governance structure for a constituency of Zodlers and realise they need to start looking after us properly and not just think of us as some irrelevant part of an equation that they don’t have to care about. We are not just some lower rung priority that can be treated as an afterthought.
I also believe that we should engage with the Monero & Tornado cash communities the same way, bringing them into the circle and showing them that we are also on the same team, we may be using different technology to get there but we are heading in the same direction. The real battle is not be between the ZF and Zodlers or ZEC & XMR it is:
All Privacy Preserving Crypto Tech v The Global Banking Establishment
This is the mission we all agree on, something we can all come together around and put our differences aside for. I very much hope that this is just a bump in the road and that the ZCash Foundation can start to take seriously the Zodlers who contribute to their mission by funding 100% of their activities through the Dev Fund. Zodlers are not some lower rung group to be ignored, they are the ZCash community and need to be respected at all times and never looked down upon.