The challenges of incentive design

Leo Zhang

By Leo Zhang

At an attempt to be fully transparent, the Zcash Electric Coin Company disclosed the company's financials, including how much the founder receives. It's a lot.

The other side:

In an in-depth article below, Arjun Balaji describes the trilemma of founder incentives in cryptocurrency economics, why it is so challenging to balance them, and some of the options for the incentive structure.

Zcash & the founder incentive trilemma
(Arjun Balaji)

"Managerial innovations devised over time to align employee and founder incentives include profit sharing (at smaller firms), stock options tied to quarterly performance (at public companies), and vesting schedules (at private companies)."

Technical Updates

Commentary on LN privacy

Cryptocurrency transactions may uncover sales of shadow broker hacking tools
(Motherboard, by Joseph Cox)

"In summer 2017, the Shadow Brokers started asking anybody wanting to buy alleged exploits and tools to use Zcash. In exchange for 100 ZEC ($15,900 USD at today’s rates, and around $22,800 at the time of the sale), buyers could access some more Shadow Broker-provided tools, although it’s not clear exactly what. The Shadow Brokers offered similar deals for several months."

Zcon0 keynote panel: cryptocurrency governance

Discussion thread on backup plan to Ethereum's Casper upgrade

Vulnerability of double-spending of Tether, and the Omni founder's explanation

Card

News & Commentary

Brave introduces beta of private tabs with Tor for enhanced privacy while browsing
(Brave)

"Private Tabs with Tor are easily accessible from the File menu by clicking New Private Tab with Tor. The integration of Tor into the Brave browser makes enhanced privacy protection conveniently accessible to any Brave user directly within the browser. At any point in time, a user can have one or more regular tabs, session tabs, private tabs, and Private Tabs with Tor open."

Messaging giant Line to launch crypto exchange in July
(CoinDesk, Stan Higgins)

"Its decision to exclude Japan suggests that its effort to obtain a license from Japan's Financial Services Agency (FSA) is still ongoing, given that it disclosed its application back in January."

Goldman Sachs, Morgan Stanley dinged in Fed stress test
(WSJ, by Liz Hoffman and Lalita Clozel)

"Goldman and Morgan Stanley won’t be able to raise their dividend or buybacks for now—the same consequence as flunking the test. The Fed spared them the black eye of a failing grade in part because of the complexities of the 2017 tax law, which reduced the value of some tax-related assets the banks held, senior Fed officials said."