Zcoin block reward

Zcoin has published details of its upcoming block reward allocation for the next four years. The allocation will come into effect following Zcoin’s upcoming halving in September 2020.

This halving is going to make the end of the reward system for the founder and seed investors of Zcoin. Essentially, this aims to allot all block rewards to the entire Zcoin community and its development moving forward.

In a press release, the privacy-focused blockchain platform stated, “We are very grateful to the seed investors who have continued to believe in Zcoin’s vision”. The platform commended their unwavering support and thanked the community members for their feedback. And the bottom line was the decision to allocate block rewards and add them to the proposed wallet alongside Znodes and LLMQ (long-lived masternode quorums).

Objectives of the block reward

Zcoin also elaborated on the objectives of the new reward allocation:

  • To ensure continued funding for research and development
  • Increased accountability, transparency, and appraisal of the core team
  • Foster community growth using miners and Znodes
  • Boost community members’ involvement with decision making through consensus

The blockchain platform affirmed that ensuring a balance between community development and Zcoin distribution to new users was crucial. With this in mind, it highlighted offering “existing token holders incentives to host Znodes”. This would also serve the purpose of “securing the network alongside miners with LLMQ chain-locks”.

Block reward allocation

To achieve the above goals, Zcoin’s community has agreed that development rewards should take into account most members voting from 10-20%. The median vote will support 15% and the most recent 20%.

Below is a pie chart showing the factors considered while arriving at the block reward allocations. It also takes into consideration that the reward in Zcoin’s token, XZC would come down from the current 25 XZC per block.

Zcoin block reward details

Source: Zcoin

So, the post-halving 12.5 XZC reward per block would have the following division:

  • Miners: 50% (6.25 XZC)
  • Znodes: 35% (4.375 XZC)
  • Development Fund: 15% (1.875 XZC)
Limitations of the Development Fund

Zcoin, however, listed what it perceived as the limitations of the development fund.

  • It is going to continue for 4 more years after halving takes place.
  • A community review will take place in the 2nd and 4th year. This will evaluate its need and amount.
  • If Zcoin’s price rises over $100,000/month, the surplus would go to a separate public address – Zcoin Reserve Fund.

Apart from block reward, the development team is also trying out other funding sources, including OpenCollective, and the Zcoin Crowdfunding System.

About Zcoin Reserve Fund

This is quite different from the block reward allocated for development. The reserve fund is only effective for special cases and needs community approval prior to utilization. According to the blockchain platform, this would protect the network from unexpected market volatility.

Here is a quick list of scenarios for accessing the funds:

  • Zcoin price falls below $3.50 to cover any shortfall in the development fund should the core team require it.
  • To pay for Zcoin Bug Bounties
  • Code audits
  • Any other expenditure that has community approval (for example events, listings, integrations). Incidentally, these kinds of expense requests would require to go through the Zcoin Crowdfunding System. So, there would need to be a discussion in the monthly community meeting.

The Zcoin press release also pointed out some additional pointers regarding the reserve fund.

  • All its transactions must remain transparent and its expenses open to all community members.
  • The reserve funds can also be converted and stored in the form of stablecoin.
  • No Znodes will be created from this fund.
  • For every $100,000/month, the cap shall be increased by 4% per annum to prevent inflation.

Previously, we shared an in-depth overview of the Zcoin blockchain and also reported updates from the platform’s project steward, Reuben Yap.


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