Zcash community members are considering the most consequential overhaul of the network’s developer-funding model since its launch, with proposals ranging from an immediate end to new grants to a phased reduction lasting until 2036. The debate arrives on Zcash’s 10th anniversary, as the privacy-focused network’s market value has climbed above $20 billion and its grant treasuries have grown far beyond the scale originally envisioned for them.
A draft published by Zcash co-founder Sean Bowe on Oct. 26 would halt automatic block-reward allocations to the Zcash Community Grants program, known as ZCG. The plan would redirect ZCG’s current 8% share of newly issued ZEC to the Network Sustainability Mechanism, or NSM, a protocol reserve intended to preserve block-reward availability over the longer term.
Bowe’s proposal rests on the size of ZCG’s existing holdings. He estimated the program controlled more than $125 million in assets, including roughly 91,453 ZEC and $8.8 million in fiat assets, less $2.4 million in obligations. The estimate used a ZEC price of $1,300.
At that valuation, Bowe calculated that ZCG was receiving an annualized $68.3 million from block rewards while spending at an annualized pace of about $6.12 million during the first quarter. His argument is that the organization could finance grants for years from its current balance sheet, without continuing to receive a fixed share of new issuance.
A debate over reserves and future issuance
Under Bowe’s initial proposal, ZCG would retain all of its current funds. The change would affect only future block rewards, while leaving untouched a separate 12% allocation controlled by Zcash token holders.
Routing ZCG’s 8% allocation to the NSM would place newly issued coins into the protocol reserve rather than making them available to the grant program. The draft describes those funds as unavailable for open-market circulation until at least 2031, potentially changing the timing of supply entering the market without reducing Zcash’s overall issuance schedule.
Bowe later expressed openness to a separate decision on whether ZCG’s existing treasury should also be transferred to the NSM. Splitting those questions could give the community a choice between ending the grant program’s fresh revenue and deciding the eventual destination of a nine-figure reserve.
Maxime Desalle has proposed a more complete shutdown. His plan would dissolve ZCG, stop it from approving new grants, finish payments already committed to recipients, and transfer remaining assets to the NSM. Desalle disclosed that he works for Cypherpunk, which he described as a major Zcash mining company, while saying the proposal was independently authored.
Desalle’s proposal focuses on governance as much as spending. The existing framework was built to direct smaller development budgets, he argued, rather than to manage a treasury worth more than $125 million while maintaining accountability to ZEC holders affected by ongoing issuance.
Calls to close both funding streams
Other community figures have argued that targeting ZCG alone would leave much of the present system intact.
Josh Swihart said the token-holder-controlled funding pool receives about 216 ZEC each day and would continue accumulating assets even if ZCG’s 8% allocation ended. His proposal would close both developer-funding channels, honor grants already approved, and transfer remaining eligible funds to the NSM.
Swihart also proposed a one-time special fund, subject to token-holder approval, for legal-defense costs connected to protocol development. The structure would replace recurring block-reward financing with a limited and purpose-specific pool for a category of spending that can be difficult to predict.
He disclosed that ZODL, an organization involved in core protocol work, recently received a token-holder grant. His proposal would remove that route for future funding, even though it has supported organizations including his own.
Tyler Winklevoss has backed the more restrictive direction of ending developer block rewards. The debate has therefore moved beyond the question of whether ZCG should remain funded and toward whether Zcash should reserve any permanent portion of its issuance for developers at all.
The disagreement places Zcash’s governance model under pressure from a familiar problem in mature crypto networks: a treasury designed to support experimentation can become a long-lived financial institution once its holdings outpace its spending. The choice now involves the trade-off between predictable financing for engineering work and limiting the amount of new ZEC directed to groups outside the market.
A proposal to taper funding through 2036
Community contributor Dismad has offered an alternative that would preserve the present funding structure while reducing its share over time. A draft dated Oct. 27 calls for total developer allocations to fall from 20% to 10% around the 2028 halving cycle, then to 5% in 2032 and zero in 2036.
That schedule would extend developer support roughly eight years beyond the 2028 endpoint under discussion elsewhere in the community. It would give funded teams a longer runway to plan around declining revenue, while committing the network to a defined exit from developer-directed issuance.
The gradual approach also acknowledges the case made by supporters of protocol funding. Grayscale has linked dedicated engineering budgets to major Zcash upgrades over the past decade, including Sapling, Orchard and the Ironwood privacy pool.
Ironwood, launched in July 2026 according to the material circulated in the community debate, closed an older transaction pool intended to address theoretical hidden-inflation risks. Such upgrades often require years of cryptographic research, implementation, audits and wallet integration before they reach mainnet.
Network activity adds urgency to the decision
The governance debate is taking place during a period of higher Zcash usage and a sharp increase in ZEC’s market price. ZecStats data showed ZEC trading above $1,200 in late October after rising about 260% over the previous year. The circulating supply stood near 16.79 million ZEC, placing the network’s market value above $20 billion.
ZecStats also recorded roughly 11,300 daily transactions in late October, up 70% from a year earlier. Shielded transactions represented 62% of activity, compared with 24% one year earlier, while about 4.96 million ZEC — 29% of circulating supply — was held in the shielded pool.
Those figures give the funding dispute a practical dimension. Zcash’s privacy features and wallet infrastructure require ongoing maintenance, but the chain’s rising valuation has also made the cost of dedicating fixed percentages of issuance much more visible. At Bowe’s assumed $1,300 ZEC price, even a modest block-reward allocation can generate tens of millions of dollars annually.
Grayscale’s Zcash trust, ZCSH, reported about $708 million in net assets as of Oct. 26. The product’s size adds another indication that Zcash’s governance decisions are being made with a larger pool of market participants watching than during earlier funding-cycle debates.
The community now faces four distinct paths: stop new ZCG inflows while preserving its treasury; dissolve ZCG and move its remaining assets to the NSM; eliminate both existing developer-funding streams; or keep funding in place while steadily reducing it through 2036. Any eventual vote will determine not only who finances Zcash’s next generation of development, but also how much of the network’s newly issued ZEC remains committed to that purpose.
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