Electric Coin Company Exits ZCash Foundation Trademark Agreement


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The Electric Coin Company, a private entity set up to develop and fund the ZCash protocol, has broken off negotiations with the ZCash Foundation to share the protocol’s trademark, September 2, 2019. ZCash has been criticized for years for their constant siphoning of funds from the network’s block subsidy to fund development. The founders reward, which is a small amount of block subsidy that goes to the founders, has come under even more scrutiny. 

Inconsistency and Lack of Privacy

ZCash is often seen as a competitor to Monero as a privacy protocol to promote fungibility and harbor individual privacy. In reality, nobody actually uses ZCash for private transactions, as data shows the network processes just two or three shield transactions a day.

In a sudden turn of events, the Electric Coin Company (ECC) called off trademark sharing negotiations with the ZCash Foundation, essentially showing the entire ecosystem that ECC can do as it pleases.

Zooko Wilcox, founder of ZCash, details how this is being done after consultation with a legal team and third-party consultants. The main reason for pivoting at this crucial moment seems to be intricacies with the multisig.

ECC and the ZCash Foundation would have a two for two veto, where either party could prevent the use of the trademark for a certain activity. ECC’s legal team believes this will lead to a deadlock and render the multisig useless.

While the explanation is indeed logical, this is a simple observation that should’ve been made at the initial stages of the negotiation.

Proposed Decentralized Governance

Zooko has recommended a more decentralized governance structure rather than the use of the ZCash Foundation. This means that until ECC decides what it wants to do, it will keep unilateral control of the trademark. They claim they will use the trademark as per the community’s wishes, but that is difficult to believe.

The fact that ECC didn’t bother consulting the community as to whether reverting on this decision made sense or not shows that they aren’t too worried about their opinion.

The Electric Coin Company expects the community to trust them, as a centralized entity controlling the trademark and development fund.

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