Zcash Quarterly Report: Wages Fall As Coin Price Fall

Key facts:
  • The price of Zcash (ZEC) is down 66% against Bitcoin since the beginning of the year.

  • Despite the decline, the proportion of funds spent on consulting and marketing has increased.

The Electronic Coin Company (ECC), the foundation partly responsible for the development of the privacy-focused cryptocurrency Zcash, published in its quarterly transparency report on August 30, that while wages remained high in the first quarter of this year, things have gotten worse as the price of the coin has dropped.

The Zcash sales pitch is that it allows users to hide how much money they are sending through the network. ECC is a for-profit company run by Zooko Wilcox and development is supported by the Zcash Foundation, non profit.

Despite the fact that the price of Zcash (ZEC) has fallen 66% against Bitcoin since the beginning of the year, “at the first quarter price of approximately $ 55 per ZEC, the company and its employees received salaries totaling approximately $ USD 449 thousand per month ”, the report reads. Coins worth an additional USD 110 thousand were also distributed to employees.

That is much less than what the ECC reported in its transparency report of the second quarter, published in May, who pointed out that, at a price of around USD 60 per ZEC, employees received USD 550,000 per month and an additional USD 180 thousand for employee compensation, since the coins were distributed to employees every month.

If the trend continues, wages will be even less in the next quarter. The May report estimated that the price of Zcash would hit $ 60, but prices fell to $ 55 on the report’s release date (Friday). At the time of writing, however, the price of Zcash continued to drop to just $ 44, which represents lower wages.

But the fall in wages is not only due to the decrease in the price of the currency: the percentage of funds allocated to employee salaries also decreased. In the second half of last year, 62% of the funds were spent in the form of employee compensation. In the first quarter of this year, it was only 56%.

Comparatively, the proportion of funds spent on consulting and marketing has increased. Consulting expenses increased from 6% in the second half of 2018 to 10% in the first quarter of 2019, and marketing and public relations grew from 9% (then called “Awareness and Education”), to 14% respectively.

ECC’s overall operating costs have fallen in the first quarter of this year in response to ‘continued market pressure«. The second quarter report says operating costs averaged a total of $ 700,000 per month, now reduced to just $ 525,000.

The amount the company reported having in USD and Zcash is roughly the same: USD 5.2 million in August and USD 5 million in May. But that already fell. At the Zcash annual conference in late June, Wilcox revealed that Zcash only had $ 3.35 million in the bank.

Translated version of Article from Robert Stevens, published in Decrypt.

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Zcash Quarterly Report: Wages Fall As Coin Price Fall

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