Zcoin Unveils New Block Reward Allocation, Creates a Reserve Fund

Zcoin, a privacy-oriented digital currency, today unveiled the details of its upcoming block reward allocation for the next four years.
The of Zcoin mining rewards is scheduled for the coming September.

According to the company, the upcoming halving will end the founder and seed investors’ rewards and distribute all block rewards to the community and development of the digital currency.

“Zcoin’s block reward allocation post-halving (that comes into effect in September) was decided after a year of consultation with the community,” Reuben Yap, Zcoin’s project steward, told Finance Magnates.
“The first change is that all founder’s rewards (previously 8% of the block reward) cease as scheduled. The seed investors had provided the initial capital to get the project off the ground, and have assisted in many ways throughout the years. However, as we enter the next phase for , these rewards are now available to the community and to fund development.”
The new block reward system will also increase funding towards the development from the previous 6 percent of the block rewards to 15 percent.
35 percent of the block rewards will be utilized for incentivizing the nodes called Znodes, which provides the infrastructure of the digital currency, while the remaining 50 percent will go to the miners.
“This block reward is to be subject to a review every two years by the community to ensure accountability,” Yap added.
Maintaining the original privacy concept of digital currencies
Zcoin is one of the many privacy-centric digital currencies in the market, but it has approached a different technique to achieve this.
“Unlike other privacy coins, Zcoin offers privacy guarantees similar to cash and does not require a trusted setup,” Yap explained.
The digital currency is using a unique zero-knowledge proof called , allowing users to burn their coins and at any time to redeem them for brand new ones with no previous transaction history.
An additional fund to protect the project
Apart from the allocation of block rewards to the development fund, the platform is also introducing a new fund, called the Zcoin Reserve Fund.
It is designed to be a reserve to protect against market volatility and to make collective decisions on expenditure with the community, Zcoin detailed.
“The Zcoin Reserve Fund was created to transparently and responsibly handle surplus cash, in case of a significant increase to Zcoin’s price. We also see the Zcoin Reserve Fund as a good way to further decentralize project governance—devolve power away from the core team—while giving the community more responsibility over funding,” Yap said.
To prevent the reserve fund from the volatility risks, this can be converted and stored in stablecoins.
Though there will be a cap of $100,000 initially, it will be increased by 4 percent every month to cover inflation.
“This fund can only be utilized in specific circumstances, such as code audits, bug bounties, or to subsidize development during challenging market conditions,” Yap detailed. “Alternatively, the Zcoin Reserve Fund can be used for other purposes upon wide community approval, which grants the community a greater say in the allocation of funds.”