Zcash Co-Founder Proposes Ending $125 Million Grants Stream

Zcash co-founder Sean Bowe has proposed ending the automatic funding stream for Zcash Community Grants (ZCG), arguing that the program has enough reserves to continue awarding grants without additional block-subsidy payments.

Bowe published the draft proposal on GitHub on Oct. 26. In a post on X, he described it as a plan to “turn off the ZCG funding stream.” The proposal would redirect ZCG’s 8% share of the Zcash block subsidy to the Network Sustainability Mechanism (NSM) for the rest of the current funding period, which is scheduled to end in 2028.

The proposal would not take money from ZCG or close the grants program. Its existing ZEC, cash and other assets would remain under its control. Only future payments from newly mined blocks would stop.

ZCG’s dashboard listed 91,452.98 ZEC, $8.8 million in cash and $2.4 million in outstanding grant commitments as of Oct. 27. At a ZEC price of $1,300, the holdings were worth about $125.3 million after accounting for the commitments. The ZEC balance alone was valued at about $111 million at the price cited in the proposal.

Bowe wrote that ZCG was not designed to manage a treasury of that size. The draft estimates that the program’s expenses totaled about $1.53 million in the first quarter of 2026, equal to roughly $6.1 million on an annual basis. It also states that annual spending of $10 million would leave the reserves able to fund grants for several years, depending on the price of ZEC.

The current allocation sends 8% of each Zcash block subsidy to ZCG. At the current subsidy and block schedule, the allocation is about 52,560 ZEC a year. At $1,300 per ZEC, that would equal about $68.3 million annually, well above the program’s reported expenses.

Under the proposal, the redirected funds would be recorded in the NSM’s accounting balance and withheld from circulation instead of being sent to a ZCG address. The NSM is designed to hold ZEC and release it through future block rewards. Separately, Zcash developers have set the activation block for the NU7 upgrade, which is expected around Nov. 5. The draft says the accounting stream would continue until the third halving boundary.

The proposal has drawn objections from members of the Zcash community. Developer str4d argued that ending the payments could reduce funding for network development while miners continue to receive most of the block subsidy. The developer also raised a timing concern: The NSM is not expected to begin distributing funds until around 2031.

Other proposals in the discussion include transferring ZCG’s remaining treasury to the NSM and ending the broader development fund, including the separate 12% Coinholder-Controlled Fund allocation. Neither idea is included in Bowe’s draft. The proposal would leave miners’ 80% share and the separate 12% allocation unchanged.

The draft does not specify an activation height. A future network upgrade and a separate deployment proposal would be needed to set the effective block. As of Oct. 27, the proposal remained under discussion and had no assigned ZIP number or reference implementation.