Zcash Grants Committee Scraps Plan to Redirect 98,000 ZEC as Funding Fight Continues

The committee that distributes grants on the privacy network Zcash said on Tuesday that it will no longer push the plan it floated on Oct. 29, less than a week earlier. The idea was to send a large chunk of ZEC toward future mining rewards, but after pushback from the community, the group decided that any change to its funding should go through the network’s normal governance process. Zcash Community Grants, known as ZCG, is run by a five-member committee that approves grants for developers and community projects without a coinholder vote on each award.

Why ZCG’s Funding Is Under Fire

ZCG receives 8% of all newly created ZEC, roughly 144 coins a day, and its treasury has grown big enough to support years of work. That has led developers and holders to ask why so much keeps flowing in. The debate grew louder after a ZCG-funded outreach project called ZECsy promoted private payments at an adult-industry convention in New Jersey in late October. Critics questioned the spending and accountability, while supporters said sex workers, who often struggle with banking limits, are exactly the kind of group financial privacy should serve.

What the Withdrawn Plan Would Have Done

The proposal would have moved 36,200 ZEC from a treasury of about 91,500 ZEC into the Network Sustainability Mechanism, a reserve that tops up miners’ block rewards over time. It would also have cut ZCG’s expected income through the 2028 halving from about 109,000 ZEC to 47,000, with further reductions toward 2032. Every coin sent to that reserve is a coin that cannot pay for development, which is why the dispute is really about who controls Zcash’s money.

Competing Proposals Still on the Table

Co-founder Sean Bowe first suggested ending ZCG’s automatic funding entirely. He later joined founder Zooko Wilcox on a draft that would have ZCG send 50,000 ZEC to the reserve and move its future funding into a new development and legal defense fund. Developer Daira Emma Hopwood wants to keep the 8% but refocus grants on getting more people to use ZEC. None has been adopted, so ZCG keeps collecting about 144 ZEC a day until a network upgrade changes the rules.