LiberLion on Nostr: Zcash and Conditional Privacy: When a Powerful Group Controls the Development of a ...

Zcash and Conditional Privacy: When a Powerful Group Controls the Development of a Tax-funded Protocol

A recurring question keeps surfacing: how can a privacy project rely on a mandatory tax that continually funnels funds to the same central actors?

The concentration of power in the development of a blockchain is a point of vulnerability, not only because of potential corruption but also because the team of developers may be pressured by regulators.

The funding design

Zcash launched with something close to an extended premine: 20% of the block reward went to founders, investors, ECC, and the Zcash Foundation. The Founders’ Reward ended in 2020, but it was replaced with a new model: today, the same 20% still fund ECC, ZF, and the grants pool. It’s not “eternal,” but it’s reviewed every four years… and it usually gets renewed.

The unresolved tension

Even with cleaner distribution, the power structure hasn’t shifted much.
ECC and the Foundation remain the gravitational centers of the ecosystem, both U.S.-based, with public leadership and heavy technical dependence. Halo, Orchard, and most of the zk infrastructure flow through that same bottleneck.
Not necessarily malicious—just centralized.

The contrast that stings

Monero moves more slowly, sure, with cycles of burnout and uneven donations.
But it avoids structural dependence: no mandatory tax, no “owners” of the protocol, no direct line to regulators.

It is funded voluntarily by the community and mostly anonymously.

Is it a perpetual tax on Zcash?

Technically no. It can be removed.
But as long as 20% of every block is redirected by obligation to a defined group, the real question stays open:

Can privacy be genuine when governance and funding are conditioned by a central power hub?

Follow the money trail to understand the destination and intention.