Vitalik Warns Zcash Against Token Voting to Protect Privacy

Debate Intensifies Over Zcash Governance: Committee Model vs. Token Voting Amid Privacy and Control Concerns

  • Ethereum co-founder Vitalik Buterin cautions against adopting a token-based voting system for ZCash, citing risks to the coin’s privacy.
  • Zcash co-founder Zooko Wilcox supported committee member Artkor’s re-election bid, sparking governance debate.
  • AngelList co-founder Naval Ravikant criticized Zcash’s committee model as outdated, advocating for on-chain, private governance.
  • Discussion occurs amid a significant drop in Zcash’s native token, ZEC, alongside broader crypto market declines.
  • Experts note trade-offs between committee-based governance and token voting, each carrying potential risks and benefits.

Zcash’s governance system has come under renewed discussion following a recent election endorsement. The debate focuses on whether to maintain its committee-based model or shift to a tokenholder voting structure. The controversy intensified when Zcash co-founder Zooko Wilcox publicly supported Artkor, a current member of the Zcash Community Grants Committee (ZCG), in his bid for re-election, as seen in his Twitter endorsement.

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Currently, Zcash uses an off-chain governance process involving the Zcash Community Advisory Panel (ZCAP), a curated group that votes on major issues and elects the committee responsible for grant allocations. Wilcox described ZCAP as composed of “thoughtful and independent people who disagree with each other but are committed to the same mission.” Details on Artkor’s candidacy and platform are available on the Zcash community forum.

Criticism came from AngelList co-founder Naval Ravikant, who labeled the current model “obsolete” and called for governance to be “on-chain and private,” as stated in his Twitter thread. According to Ravikant, reliance on “trusted” third parties introduces security flaws regardless of their intentions.

Ethereum co-founder Vitalik Buterin also weighed in, advising against adopting a coin-voting system for Zcash governance. Buterin warned that token voting might allow the community’s privacy focus to “erode over time” due to decisions driven by the “median token holder,” as expressed in his Twitter post. Referencing his earlier 2021 blog post, he emphasized that coin-weighted voting tends to concentrate power among large holders and promotes short-term thinking influenced by price movements.

Meanwhile, the price of Zcash’s ZEC token has been volatile, dropping about 23% in a day amid a crypto market slump that pushed the total market cap below $3 trillion. Artkor acknowledged these changes in his re-election post, noting that the increased value presents “dangerous challenges,” including the temptation to “start spending more easily,” as highlighted on the Zcash community forum.

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Analyst Lucien Bourdon of Trezor pointed out the risks of token-based voting, including possible governance capture by well-funded actors and the correlation of influence with wealth. Bourdon indicated both committee governance and token voting have pros and cons, with effective systems blending accountability and safeguards against undue control.

At the time of writing, the governance debate continues as the Zcash community considers the best path forward.

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