Zcash Community Grants (ZCG) has withdrawn its proposal to redirect approximately 98,000 ZEC toward future mining rewards following criticism from the cryptocurrency’s community.
Summary
- Zcash Community Grants (ZCG) has withdrawn its proposal to redirect approximately 98,000 ZEC toward future mining rewards following community feedback.
- The abandoned plan included transferring 36,200 ZEC from its existing treasury and reducing its future funding allocation.
- Zcash co-founders Sean Bowe and Zooko Wilcox support a competing plan involving a 50,000 ZEC treasury contribution and a new development fund.
- ZCG continues receiving 8% of newly issued ZEC, equivalent to approximately 144 ZEC daily, until governance changes are approved and implemented.
- ZEC traded near $1,310, up more than 12% over 24 hours.
In a November 3 forum statement, the committee confirmed it would no longer pursue the funding changes introduced on October 29. The decision leaves several competing proposals under discussion, including plans to end ZCG’s automatic funding.
“We’ve decided not to take this proposal forward,” the committee said after reviewing feedback from community members.
Meanwhile, the withdrawal comes as Zcash trades near $1,310 at the time of writing, up nearly 14% over 24 hours, according to crypto.news market data. At that price, the proposed 98,000 ZEC redirection would have been worth roughly $128.7 million.
What happens to the 98,000 ZEC after ZCG withdraws its proposal?
Under the original plan, ZCG intended to move approximately 36,200 ZEC from its existing treasury into the Network Sustainability Mechanism (NSM).
The mechanism holds ZEC outside circulating supply before releasing it gradually through future mining rewards. ZCG proposed using the reserve to support miners as block subsidies decline over time.
The committee held roughly 91,500 ZEC when it introduced the proposal. After the proposed transfer, approximately 55,200 ZEC would have remained available in its treasury.
ZCG wanted to reduce its projected income before the 2028 halving from approximately 109,000 ZEC to 47,000 ZEC. Further reductions would continue toward the 2032 halving.
Combined, the treasury contribution and reductions in future allocations would have redirected approximately 98,000 ZEC toward mining rewards.
With the proposal withdrawn, none of those transfers has been authorized under that plan. The 98,000 ZEC figure includes future funding allocations, meaning it does not represent a single balance currently held by ZCG.
The committee currently receives 8% of newly issued ZEC, equivalent to approximately 144 coins daily. Its five elected members approve grants for development and community projects without requiring a separate token-holder vote for every award.
Zcash founders back competing proposal to cut grant funding
The dispute began before ZCG introduced its funding reduction proposal.
Zcash co-founder Sean Bowe had proposed ending the committee’s automatic allocation entirely, arguing that its existing treasury could support operations for years.
“It’s time to turn off the ZCG funding stream,” Bowe said in October, questioning whether the program needed further automatic payments.
As crypto.news previously reported, Bowe later joined Zcash founder Zooko Wilcox in supporting a different proposal developed by Tachyon Group and Shielded Labs.
Their draft Zcash Improvement Proposal would require ZCG to contribute 50,000 ZEC to the NSM within 30 days of community acceptance.
Using the proposal’s $1,300 ZEC assumption, the contribution would be worth $65 million. ZCG would retain approximately 41,453 ZEC, along with its dollar-denominated assets.
The proposal would end ZCG’s future 8% block subsidy allocation and redirect that funding into a new development and legal-defense lockbox.
Under the draft rules, a later network upgrade would activate the funding change, while the existing grants committee could continue awarding money from its remaining reserves.
No activation date has been established, and the proposal has not been adopted.
Winklevoss criticism adds pressure to Zcash funding debate
The funding disagreement has attracted criticism from Gemini founders Cameron and Tyler Winklevoss, who have questioned ZCG’s spending decisions and accountability.
The brothers called for changes to the committee’s structure in October, arguing that ZEC holders should have more direct control over development funding.
Cameron Winklevoss said traditional capital markets already provide a model for stakeholder participation, describing coinholder voting as its blockchain equivalent.
Tyler criticized the committee’s handling of its growing treasury and questioned whether its members should control such substantial resources without more direct oversight.
The disagreement intensified following a ZCG-funded outreach project called ZECsy, which promoted private cryptocurrency payments at an adult-industry convention in New Jersey.
Critics questioned the spending priorities, while supporters defended outreach to workers who can face restrictions accessing conventional banking services.
A separate proposal from developer Daira-Emma Hopwood would preserve ZCG’s 8% allocation but concentrate grants more closely on encouraging ZEC adoption.
Zcash funding decision returns to community governance
With ZCG’s proposal withdrawn, the committee has left the next funding decision to Zcash’s established governance process.
“The future of the Dev Fund and ZCG’s treasury is for the community to decide through Zcash’s usual governance process,” the committee stated.
Zcash already operates a separate coinholder-controlled funding program that receives 12% of block rewards.
In its previous funding round, ZEC holders approved $8.39 million across 17 projects covering security research, protocol development and related work.
That program’s next proposal window runs through November 13, with coinholder voting scheduled for December 17–29.
Those dates concern the existing grant round, not a confirmed vote on the competing ZCG funding proposals.
Until new rules receive the required approval and take effect, the grants committee will continue receiving its existing allocation of approximately 144 ZEC daily.
