Privacy-centric coin Zcash (ZEC) was the best performer among the top 10 cryptocurrencies at press time, after surging 10% in the day to trade at $1,467. Other than recent whale activity catapulting upside past 1,300, the coin has also benefited from the recent endorsement by Matt Huang, co-founder of Paradigm venture capital and tech investment firm.
Source: CoinMarketCap
According to Huang, the network’s inflation-funded developer fund is “an elegant mechanism” to tackle the public goods funding dilemma or long-term project funding.
Notably, the inflation-funded model redirects a portion of block mining rewards away from miners and into a maintenance pool. These funds are used to support developer activity on Zcash, including upgrades, security research, and ecosystem public goods. The latter refers to open-source resources that are beneficial for the network but not profitable to the builder, hence evoking a dilemma.
The Paradigm executive acknowledges the indispensability of this fund, especially in the current era of exponential tech capabilities driven by AI and quantum development.
And while he praises Zcash as a “private complement to Bitcoin,” Huang points out what he thinks is a potential network vulnerability. Relying solely on coin-holder voting to govern Zcash treasury introduces market unpredictability. It also, according to Huang, undermines long-term trust in ZEC as a stable monetary asset. He concludes by urging additional forms of Treasury governance to mitigate the threats.
Paradigm has invested in both Zcash and the Zcash Open Development Lab (ZODL). While this speaks to its motivation to upgrade the network, critics like venture capitalist Naval Ravikant say it undermines blockchain as a market.
According to him, striking out token voting would introduce unwanted politics and Sybil attacks.
According to market analyst Ali, ZEC’s momentum is paving the way for an $1,800 price target by year-end. If it continues holding above $1,400, then the next resistance lies at $1,500. A break below that support could trigger a pullback to $1,350.
A key event to watch for is the September 30 NU7 upgrade. Its features include faster transaction finality and full quantum resistance.
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