Zcash Grants Committee Withdraws 98,000 ZEC Redirect Plan Amid Community Pushback
The Zcash Community Grants committee withdrew its proposal to redirect roughly 98,000 ZEC toward future mining rewards after community criticism, according to a November 3 forum statement. Competing proposals to end the committee's automatic 8% funding stream remain under discussion, and no transfers were authorized under the withdrawn plan.
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Committee Withdraws Proposal
Zcash Community Grants (ZCG) has withdrawn its proposal to redirect approximately 98,000 ZEC toward future mining rewards, the committee said in a November 3 forum statement. The plan, introduced October 29, was dropped after community feedback. Sources differ on how the withdrawal was framed: CoinDesk described it as a response to community backlash, while Crypto.news cited the committee's statement that it had decided "not to take this proposal forward" after reviewing feedback.
What the Original Plan Would Have Done
The proposal had two components. ZCG would have moved about 36,200 ZEC from its existing treasury into the Network Sustainability Mechanism (NSM), a reserve that holds ZEC outside circulating supply and releases it gradually through mining rewards as block subsidies decline. The committee also wanted to cut its projected income before the 2028 halving from roughly 109,000 ZEC to 47,000 ZEC, with further reductions toward the 2032 halving. Together these measures accounted for the 98,000 ZEC figure.
That figure includes future funding allocations, not a balance the committee holds today. Crypto.news put the value at roughly $128.7 million based on ZEC trading near $1,310, up nearly 14% over 24 hours at the time of writing. The committee held about 91,500 ZEC when it introduced the proposal, and about 55,200 ZEC would have remained in its treasury after the transfer.
The Competing Proposals
The dispute predates the withdrawal. Zcash co-founder Sean Bowe argued in October that the committee's automatic funding should end entirely, saying its existing treasury could support operations for years. Bowe later backed a draft Zcash Improvement Proposal from Tachyon Group and Shielded Labs, alongside Zcash founder Zooko Wilcox. That draft would require ZCG to contribute 50,000 ZEC to the NSM within 30 days of community acceptance, end its 8% block subsidy allocation, and redirect that funding into a development and legal-defense lockbox. Using the proposal's $1,300 ZEC assumption, the contribution would be worth about $65 million, leaving ZCG with roughly 41,453 ZEC plus dollar-denominated assets.
Under that draft, a later network upgrade would activate the funding change, and the existing committee could keep awarding grants from its remaining reserves. No activation date has been set and the proposal has not been adopted.
Governance Criticism
Gemini founders Cameron and Tyler Winklevoss have criticized ZCG's spending and accountability. In October they called for changes to the committee's structure so ZEC holders would have more direct control over development funding. Cameron Winklevoss compared coinholder voting to stakeholder participation in traditional capital markets, while Tyler questioned whether five elected committee members should control a growing treasury without more direct oversight. The committee currently receives 8% of newly issued ZEC, about 144 coins per day, and approves grants without a separate token-holder vote for each award.
Why It Matters
For Traders
With the withdrawal, no ZEC transfers were authorized under the original plan, so near-term supply should be unaffected while competing proposals remain unresolved.
For Investors
The outcome of the funding-stream debate will shape Zcash's long-term issuance and governance, making the choice between ending or preserving ZCG funding a structural question for holders.
For Builders
Developers building on Zcash should track the competing Zcash Improvement Proposal, since it would change how grants and development funding are sourced.
This article is for information only and is not financial advice. Read the full disclaimer.
