Company: ZCSH
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0000950170-25-035469
Chunk: 64

Company: Grayscale Zcash Trust (ZEC)
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 64
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 by which new ZEC enter into circulation to the public.

Limits on ZEC Supply

The Zcash Network is structured to allow a maximum of 21 million ZEC to be created, which are mined over time with the creation of each new block. Currently, one ZEC is created every 1.3 minutes, on average. During the first four years of ZEC’s existence, 80% of newly created ZEC was distributed to miners, while 20% of newly created ZEC was allocated to the founders, employees and advisers of ECC, as well as to certain investors in ECC. This allocation is called the “Founders’ Reward.” Every four years, the rate of ZEC being created will halve, just as it does for Bitcoin. The end result is that there will ultimately be 21 million ZEC in existence, and 10% of it, or 2.1 million, will have been distributed to the Founders’ Reward. As of November 2020, the Zcash community voted to approve extending the Founders’ Reward for four more years until the next halving.

As of December 31, 2024, approximately 16.3 million ZEC were outstanding, and estimates of when the 21 million ZEC limitation will be reached range from at or near the year 2035.

Modifications to the ZEC Protocol

Although the Zcash Network is an open-source project, historically ECC has supported the development of ZEC. ECC is able to access, and can alter, the Zcash Network source code and, as a result, they are responsible for quasi-official releases of updates and other changes to the Zcash Network’s source code.

For example, the first network upgrade, called “Overwinter”, was implemented on June 26, 2018. The purpose of Overwinter was to make initial upgrades on which future upgrades could be built. The next upgrade, called “Sapling”, was implemented on October 29, 2018. The purpose of Sapling was to improve the performance and functionality of shielded transactions to increase mobile, exchange and vendor adoption of shielded transactions and thus the Zcash Network’s overall privacy. The next upgrade, called “Blossom”, was implemented on October 28, 2019. The purpose of Blossom was to increase the frequency of blocks, which were previously mined 

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approximately once every 2.5 minutes, to increase the network’s speed and usability. “Canopy” implemented