Privacy Coin Zcash Goes Through First Halving
2 min read
The Zcash (ZEC) blockchain has undergone its first halving today, reducing the block rewards for miners from 12.5 ZEC ($783) to 6.25 ZEC ($391).
Just like with Bitcoin’s halving, the Zcash blockchain is programmed to reduce miners’ rewards by half roughly every four years. This is done to prevent potential inflation caused by an overabundance of coins and retain (or perhaps increase) the crypto’s value.
Coinciding with the first halving, the developers of Zcash also deployed the fifth major network upgrade, dubbed Canopy. Its main changes primarily address some of the community’s concerns with how rewards were distributed.
Activated at block 1046400!
Canopy is the fifth major network upgrade for #Zcash, and coincides with the first Zcash halvening. pic.twitter.com/ni04QPybhj— Electric Coin Company (@ElectricCoinCo) November 18, 2020
First of all, the upgrade removed the so-called “Founders’ Reward.” Prior to Canopy, 20% of all mining rewards were split between the Electric Coin Company (which develops the blockchain), the Zcash Foundation and Zcash’s initial founders. In total, the latter received over 14% of all mining rewards—much to the community’s dismay.
“Canopy establishes a new development fund, largely earmarked for new participants to improve, build upon, extend and support Zcash, and the Founders Reward has come to an end,” the Electric Coin Company has announced on Twitter today.
After the upgrade, the funds will be distributed differently. While Zcash miners will still be receiving only 80% of block rewards, 8% out of the remaining 20% will go towards the Major Grants Fund aimed at supporting third-party developers.
The community also voted to extend the development fund for the next four years—as it could have potentially expired after the halving. From now on the Electric Coin Company and the Zcash Foundation will be receiving the remaining 7% and 5% of all block rewards, respectively.
The next halving will further reduce Zcash miners’ block reward to 3.125 ZEC and will occur at some point in 2024.
