Author: The Rollup
Compiled by: Peggy, BlockBeats
Editor's Note: On January 8, Josh Swihart, CEO of Electric Coin Company (ECC), the core development team behind Zcash (ZEC), disclosed in a post that the ECC team had recently left the original organizational structure en masse and plans to establish a new company. The reason cited was that their parent governance body, Bootstrap (a non-profit organization responsible for governing ECC and supporting Zcash), had "clearly and persistently deviated" from Zcash's core mission.
ECC believes that the existing non-profit governance structure has severely constrained the project's expansion in terms of funding, incentives, and execution efficiency, leading to the collective departure. They now aim to continue advancing Zcash-related products under a for-profit model. However, the non-profit board Bootstrap, responsible for governance, argues that this transition path could introduce legal and political risks and is therefore unacceptable.
Amid this disagreement, on January 9, former ECC CEO Josh Swihart announced the establishment of a new for-profit startup, CashZ (CashZ.org), focusing on the productization and commercial implementation of Zcash wallets. The goal is to scale Zcash to "billions of users" through a sustainable profit model.
Following the news, Zcash's price dropped by approximately 20%, reflecting market unease over the core development team's collective departure.
Regarding this governance controversy, the crypto podcast The Rollup offered a representative industry perspective. Co-founders and hosts Andy and Robbie reviewed the entire process of ECC's exit and the rapid establishment of CashZ during a live stream, arguing that this is not a project collapse but an inevitable structural adjustment. In their view, the root of the conflict lies not in technology or vision but in the tension between organizational form and scaling goals: when privacy protocols attempt to achieve mass adoption, non-profit governance structures often become the first bottleneck.
Based on this assessment, Andy and Robbie are relatively optimistic about CashZ's establishment. They believe that, without building a new public chain or issuing a new token, and instead continuing to develop wallet products based on the existing Zashi codebase, a for-profit startup may provide a more realistic growth path for Zcash. This "exit" resembles a reorganization focused on execution efficiency and scalability rather than an ecosystem split.
From a broader perspective, Zcash's controversy once again highlights a recurring industry theme: as crypto projects enter the "scaling and implementation" phase, conflicts between non-profit foundations and for-profit teams often become less about ideals and more about trade-offs between efficiency and risk control. Zcash may simply be the latest case.
Below is the original text:
The Birth of CashZ and the Team's Departure
Andy: Yes, Josh just posted that tweet. Our stance is clear: we are fully committed to Zcash. Zcash must scale to billions of users. Startups can achieve scaling, but non-profits cannot. This is precisely why we are establishing the new startup CashZ.
Rob: So they are actually building a completely new wallet.
Andy: Yes, but based on the same Zcash codebase, with the project codename CashZ. If you are a Zcash user, you just need to join the waitlist.
Josh also mentioned in yesterday's tweet that over the past few weeks, it has become very apparent: the majority of the board members of Bootstrap, the 501(c)(3) non-profit managing ECC—specifically Zaki, Manny, Christina Garman, Allan Fairless, and Michelle Lai—were named. This situation itself is quite out of control.
Mission Misalignment and "Constructive Discharge"
Andy: He pointed out in the tweet that all this stems from a clear misalignment with Zcash's core mission. After being handled by ZCAM (an entity related to Zcash community governance) in a "constructive discharge" manner, the entire ECC team chose to resign collectively.
In simple terms, the employment terms were unilaterally changed, making it impossible for us to perform our duties effectively and in accordance with professional ethics. We are indeed forming a new company, but we are still the same team, carrying the same mission—to build unstoppable private money. It is important to emphasize that the Zcash protocol itself remains unaffected.
Rob: He also included a link explaining what "constructive discharge" means. By 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; legally, such a resignation may not be considered voluntary.
Andy: Yes, obviously, Zcash's price dropped by about 20% following this news.
Community Reaction and Controversy Surrounding Zaki Manian
Rob: Arthur has also started to "mock" the situation. No matter how you spin it, this doesn't look good. Balaji has always emphasized: Zcash can scale, must scale, and will scale.
And now, Zaki is clearly receiving the most blame. Some even accuse him of having "looted and destroyed" the Cosmos ecosystem and now messing up the Zcash team.
Andy: Oh my. Zaki has been in this industry for many years and has indeed done a lot of great work. At least on this point, I am willing to defend Zaki. Honestly, I don't know exactly what happened internally.
The For-Profit vs. Non-Profit Struggle (Analogous to OpenAI)
Andy: Zooko once said that these individuals, including Zaki, Allan, and Christina, all have very high integrity standards. Clearly, there is a fundamental misalignment in the ethical and moral understanding of Zcash's mission between the two sides.
Rob: This almost sounds like the disagreement that happened at OpenAI back then: one side believes that only for-profit organizations can truly achieve scaling and deliver sustained value; the other insists that the non-profit structure is the correct and safer choice.
Andy: Zaki later issued a statement expressing regret over this outcome. From Bootstrap's perspective, the board did discuss the possibility of introducing external investment and achieving "privatization" through alternative structures, and worked closely with legal advisors throughout the process to ensure any path complied with U.S. non-profit law.
However, it must be acknowledged that the institutional constraints faced by non-profit organizations are real, and navigating these limitations properly in a constantly changing environment is extremely complex.
Rob: It sounds like Zaki was actually also pushing to establish a startup.
The Final Reason for the Divergence
Andy: The opposing side believes that, in its current form, the proposed transaction scheme introduces new vulnerabilities for politically motivated attacks against Zcash, potentially even giving any donor grounds to file a lawsuit. Therefore, their core goal is to prevent systemic risk to the entire Zcash ecosystem. Some proposals initially put forward as "better for everyone" ultimately became the trigger for the split.
Rob: This is truly regrettable because, looking at the outcome, the positions of the two sides weren't that far apart. Both wanted to transition the original non-profit structure into some form of for-profit entity to generate sustained revenue, build, and scale Zcash. The reason they ultimately parted ways was simply an inability to agree on "how to safely accomplish this step."
