Zcash co-founder Sean Bowe has proposed ending the automatic 8% block-subsidy allocation to Zcash Community Grants, arguing that the grant program already controls more than $125 million in assets and does not need to keep receiving newly issued ZEC. Under a draft proposal published on GitHub, the allocation would instead flow to Zcash’s Network Sustainability Mechanism for the rest of the current funding stream’s term.
The proposal would leave Zcash’s total issuance schedule unchanged. Rather than reducing the number of ZEC created through block rewards, it would redirect the portion now assigned to ZCG. The draft does not assign an activation height and says the change is not part of the currently specified NU7 network upgrade, meaning it would require a separate future upgrade and community support before taking effect.
Bowe said in a post on X that ZCG has more than $125 million in funding and would continue receiving millions of dollars before the existing funding stream expires unless the allocation is changed.
ZCG would retain its existing treasury
The Zcash Community Grants program would keep control of its current assets and could continue making grants under the proposal. Its existing obligations would also remain in place.
According to the GitHub draft, ZCG holds 91,452.98 ZEC and approximately $8.8 million in U.S. dollar-denominated assets. The program also has about $2.4 million in outstanding grant liabilities. At a ZEC price near $1,248 on Tuesday, the program’s ZEC holdings alone would be worth roughly $114 million, placing its combined assets close to the $125 million figure cited by Bowe.
ZCG began in 2020 under the name Zcash Open Major Grants. It was designed to fund independent work supporting the Zcash ecosystem, including software, infrastructure, education and privacy-related development. Grant requests can be submitted through an open process or arranged as invite-only grants, while approvals are made by a five-member committee elected by the Zcash community.
The proposal does not call for dissolving the program or reclaiming its treasury. Instead, it would stop the continuing automatic revenue stream while leaving ZCG to spend the funds it has already accumulated and to fulfill commitments already approved.
Annual allocation far exceeds reported spending
The draft estimates that the current 8% allocation can generate more than $68 million in ZEC annually. That figure is sharply higher than the $1.53 million in ZCG expenses reported by the Financial Privacy Foundation for the first quarter of 2026.
The gap between the program’s incoming block rewards, its existing treasury and its reported quarterly expenses forms the core of Bowe’s argument. A grant program with a nine-figure reserve may be able to finance ecosystem work for years without receiving a fixed share of every block subsidy, particularly if it continues to manage grants through its elected committee.
Under the current model, ZCG’s 8% share corresponds to 144 ZEC per day, or 52,560 ZEC over a 365-day year. Those figures describe the amount presently routed to the grants program, though the draft frames the proposed change as a reassignment of rewards rather than a reduction in Zcash issuance.
That distinction will likely shape the debate. Redirecting rewards to the Network Sustainability Mechanism could change who controls the assets and when they are deployed, but the proposal itself does not state that the block-subsidy share would cease to be minted. Claims that the measure would automatically cut ZEC inflation or eliminate new supply therefore go further than the published draft.
Coinholder fund would remain untouched
The proposal would not alter the separate 12% allocation to the Coinholder-Controlled Fund. That fund, as its name suggests, is intended to be governed by ZEC holders rather than by the ZCG committee.
Keeping the coinholder allocation intact narrows the proposal to the grants program’s funding stream. It also avoids reopening every part of Zcash’s post-2024 governance and financing structure in one upgrade, although critics could argue that any broader review of automated block-reward allocations should include the larger 12% share as well.
The Network Sustainability Mechanism would receive ZCG’s redirected allocation only for the remaining duration of the present funding stream. The draft does not establish a new permanent distribution model beyond that term.
A governance decision, not an immediate market event
ZEC traded at about $1,248 on Tuesday, up 2% over the previous 24 hours, according to the figures provided with the proposal discussion. The price move alone offers little evidence of a market verdict on a change that has no activation height and remains outside the specified NU7 upgrade.
The more immediate issue is governance. Zcash would need to turn the draft into a defined network-upgrade proposal, settle the design of the Network Sustainability Mechanism and build sufficient community support for activation. Until then, ZCG continues to receive its scheduled block-subsidy allocation and remains able to approve grants under its present mandate.
Bowe’s proposal places Zcash’s development-financing debate squarely on treasury efficiency: whether a grants body holding roughly $125 million should continue receiving an automatic share of new block rewards, or whether the network should place those future funds under a different sustainability framework.
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