Zcash development company Electronic Coin Company (ECC) released its quarterly transparency report (based on first quarter expenses) on August 30. Although the wage level is still very high in the first quarter of this year, with the decline in Zcash (ZEC) prices, the situation seems to have turned sharply.
The selling point of Zcash is that it allows users to hide the amount they send through the network. ECC is a for-profit company operated by Zooko Wilcox, while development is the responsibility of the non-profit Zcash Foundation.
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Although ZEC’s price on bitcoin has fallen 66% since the beginning of the year, “the ZEC price was about $55 in the first quarter, and ECC and its employees received about $449,000 per month,” the report said. There are also tokens worth $110,000 distributed to employees.
This is much less than what ECC reported in the second quarter transparency report released in May. The survey shows that for $60, employees earn $550,000 a month, and a monthly bonus of $180,000 because the company issues tokens to employees.
If this trend continues, wages will be lower in the next quarter. The May report estimates that Zcash's price will reach $60, but at the time of the quarterly report (on Friday), the ZEC price fell to $55. As of press time, Zcash's price is $45.
But the decline in wages is not just because of the decline in ZEC prices: the proportion of wages allocated to employees has also decreased. In the second half of last year, 62% of the expenditure was employee compensation. In the first quarter of this year, this ratio was only 56%. However, the company's LinkedIn page revealed that it has only 19 employees.
In contrast, the proportion of funds used for consulting and marketing has increased. Consulting fees rose from 6% in the second half of 2018 to 10% in the first quarter of 2019, and marketing and public relations expenses increased from 9% to 14%.
In response to “continuous market pressures”, ECC’s overall operating costs declined in the first quarter of this year. The second quarter report showed that operating costs averaged $700,000 per month and are now down to $525,000.
The company reported that the dollar and Zcash hold roughly the same amount – $5.2 million in August and $5 million in May. But during the period, at the Zcash conference held in late June, Wilcox revealed that Zcash’s bank deposits were only $3.35 million.
Finally, the ECC pointed out in the report that due to its fiscal deficit and market uncertainty, the company reduced spending in areas such as public relations, trademark protection, engineering, event sponsorship and other non-critical activities. Since June, the company has also contacted the recipient of the founder's award, requesting to dilute its amount in order to use more funds for the development and popularization of Zcash.
The ECC published specific founder award distributions in the report: