Home
News
- Zcash devs has plans to shift the protocol from Proof-of-Work to Proof-of-Stake
- According to ECC, the shift is possible within three years
- ECC promised that users would be able to stake a portion of their ZEC into a dedicated Zcash smart contract to become validators
Zcash, the privacy focused cryptocurrency project has recently seen a massive uptrend after rebound on Friday. It is observed that the price inclined following Electric Coin Company (ECC), the firm behind the project discussing the prospectus of moving ZEC to Proof-of-Stake (PoS) from Proof-of-Work (PoW). Notably, within just 24-hours, the cryptocurrency skyrocketed by 20% logging an intraday high at the price level of $188.80. It is also observed that the coin achieved the price level after rising two days in a row by over 27%. According to analysts in the market, ZEC’s recent uptrend wiped out a bigger portion of the losses it faced earlier this week.
Zcash would shift to PoS within three years
Zcash’s main developer, ECC, announced that the crypto project will soon transition to a PoS based consensus mechanism. According to the announcement, the shift in consensus algorithm will take three years. Furthermore, the ECC also noted that the upgrade would limit Zcash price downward pressures, as it will remove miners that immediately liquidates the token after mining for BTC or any fiat.
Why do the ZEC devs plan to shift?
According to Josh Swihart, the senior vice president of growth at ECC, such a shift in mechanism will help increase the utility of ZEC tokens through capabilities. Such capabilities include yield generation through staking and a possible path to on-chain governance mechanisms for the token holders.
Additionally, Swihart also observed that there are other benefits of shift as well, as it could reduce the ZEC energy footprint. Indeed, the fact will provide a possible path towards an on-chain governance mechanism. Moreover, the reduction of ZEC energy footprint will also support interoperability by addressing problems with PoW transaction verification.
Bull cashing on PoS FOMO
As the crypto market is giving incredible gains, many investors have fears of missing out (FOMO). It is notable that PoS mechanisms are unlike PoW and allows a person to mine or validate while simply holding or staking the underlying assets. Indeed, the so called holders or stakers that are known as validators receive the rewards in the form of yields.
Following observing the scenario, ECC promised that users would be able to stake a portion of their ZEC into a dedicated Zcash smart contract to become validators. Ultimately, more Zcash tokens may end up going out of active circulation due to lockup periods. Hence, following the scenario, investors began to acquire more of the cryptocurrency to hold for a longer time frame due to FOMO.
Besides, Willy Wo, an on-chain analyst, observed the recent ZEC boom came in response to the tweet from Gary Silbert, the founder of Digital Currency Group. Notably, Gary highlighted in his tweet regarding the supply cap of ZEC and unveiled that he will amass more of the tokens. However, According to Willy Woo, if Zcash could decide to extend the dev tax and if it can switch to PoS and cut out the miners, then the token will not have a maximum supply.
