Original Author: The Rollup
Translated by: Peggy, BlockBeats

Editor's Note: On January 8, Josh Swihart, CEO of Electric Coin Company (ECC), the core development team for Zcash (ZEC), announced that the ECC team had recently left the existing organizational structure and planned to establish a new company. The reason cited was that Bootstrap, the governing body overseeing ECC (a nonprofit organization supporting Zcash), had experienced a "clear and ongoing divergence" from Zcash's core mission in its governance direction.

ECC believes that the existing non-profit governance structure has severely constrained project expansion in terms of financing, incentives, and execution efficiency, and therefore chose to collectively leave and continue advancing Zcash-related products in a for-profit form. However, Bootstrap, the non-profit board responsible for governance, argues that this transition path could trigger legal and political risks and is therefore unacceptable.

Amid this disagreement, on January 9, former ECC CEO Josh Swihart announced the launch of a new for-profit startup, CashZ (CashZ.org), which will focus on the product development and commercialization of Zcash wallets. He aims to bring Zcash to a "user base in the billions," as he envisions, by establishing a sustainable business model.

After the news spread, Zcash's price dropped about 20%, also reflecting from the side the market's high level of anxiety over the entire core development team's resignation.

Surrounding this governance controversy, the crypto podcast The Rollup provided a representative industry perspective. Co-founders and hosts Andy and Robbie reviewed the entire process of the ECC team's departure and the rapid formation of CashZ in their live broadcast. They argued that this was not a project collapse, but rather an inevitable structural adjustment that was long overdue. In their view, the root of the conflict did not lie in technology or vision, but in the tension between the organizational structure and the goal of scalability: when a privacy protocol attempts to achieve mass adoption, a non-profit governance model often becomes the first bottleneck.

Based on this assessment, Andy and Robbie are relatively optimistic about the establishment of CashZ. They believe that, without launching a new public blockchain or issuing a new token, but instead continuing to develop wallet products based on the existing Zashi codebase, a for-profit startup might actually provide Zcash with a more realistic path for growth. This "departure" resembles more of a reorganization focused on execution efficiency and scalability, rather than a split in the ecosystem.

From a broader perspective, the Zcash controversy once again highlights a recurring industry dilemma: when a crypto project enters the "scaling and implementation" phase, the conflict between non-profit foundations and for-profit teams often ceases to be a debate of ideals and instead becomes a trade-off between efficiency and risk control. Zcash is likely just the latest example.

The following is the original text:

The Birth of CashZ and Team Resignation

Andy: Yes, Josh just posted that tweet. Our position is clear: we are fully committed to Zcash. Zcash must scale to billions of users. Startups can scale, but non-profits can't. That's exactly why we started the new startup CashZ.

Rob: So they're actually building a brand new wallet.

Andy: Yes, but it's based on the same Zcash codebase, and the project codename is CashZ. If you are a Zcash user, you just need to join the waitlist.

Josh also mentioned in his tweet yesterday that it has become very clear over the past few weeks: the majority of the board members of Bootstrap, the 501(c)(3) nonprofit organization responsible for managing the Ethereum Classic (ECC) project—including Zaki, Manny, Christina Garman, Allan Fairless, and Michelle Lai—have been repeatedly named. The situation itself has already spiraled out of control.

Mission Drift and "Constructive Discharge"

Andy: He pointed out in his tweet that all of this stemmed from an obvious misalignment with Zcash's core mission. After being constructively discharged by ZCAM (an entity related to Zcash community governance), the entire ECC team chose to resign collectively.

In short, the employment terms were unilaterally changed, making it impossible for us to continue fulfilling our duties in an effective and ethical manner. We are indeed forming a new company, but it is still the same team with the same mission: to build unstoppable private money. It is important to emphasize that the Zcash protocol itself is unaffected.

Rob: He also attached a link that specifically explains what "constructive discharge" is. According to the definition, it refers to a situation where an employer creates a hostile or intolerable work environment, or uses other forms of pressure and coercion, forcing an employee to resign. In legal terms, such a resignation may not be considered voluntary.

Andy: Yes, affected by this news, the price of Zcash obviously dropped about 20%.

Rob: Arthur has also started to mock it. No matter how you try to spin it, this doesn't look good. Balaji has always emphasized: Zcash can scale, must scale, and will eventually scale.
And now, Zaki is clearly bearing the most blame. Some have even accused him of "plundering and destroying" the Cosmos ecosystem, and now botching the Zcash team as well.

Andy: Wow. Zaki has been in this industry for many years and has indeed done a lot of excellent work. At least on this point, I'm willing to come to Zaki's defense. To be honest, I don't really know what exactly happened internally.

Andy: Zooko stated that these individuals, including Zaki, Allan, and Christina, themselves uphold very high standards of integrity. Obviously, there was a fundamental misalignment between both sides regarding the ethical and moral understanding of Zcash's mission.

Rob: This sounds almost like the split that happened at OpenAI back then: some people believed that only for-profit organizations could truly scale and consistently deliver value, while others insisted that a non-profit structure was the more correct and safer choice.

Andy: Zaki also issued a statement afterward, expressing regret over this outcome. From Bootstrap's perspective, the board had indeed discussed the possibility of bringing in external investment and exploring alternative structures to achieve "privatization," and worked closely with legal counsel throughout the process to ensure that any path taken would comply with U.S. nonprofit laws.

However, it must be acknowledged that the institutional constraints faced by nonprofit organizations are real. Effectively addressing these limitations in a constantly changing environment is itself extremely complex.

Rob: It sounds like Zaki is actually pushing to start a startup as well.

The root cause of the final disagreement

Andy: Opponents argue that under the current version, the proposed transaction plan would introduce new vulnerabilities to politically motivated attacks against Zcash, and could even provide room for any donor to file lawsuits. Therefore, their core objective is to prevent systemic risks to the entire Zcash ecosystem. Some proposals initially put forward as "being better for everyone" eventually turned into sparks that led to division.

Rob: This is indeed regrettable, because looking at the outcomes, the positions of both sides were actually not that far apart. Both sides wanted to transform the original non-profit structure into some form of for-profit entity, in order to generate sustainable income, build, and expand Zcash. The reason they eventually went their separate ways was simply that they were never able to reach an agreement on "how to safely make this transition."

[Original article link]

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