Zcash Community Grants, the program that funds development on the privacy network, now holds a treasury worth about $125 million. One of Zcash’s co-founders, Sean Bowe, argues that is reason enough to turn off the stream that filled it. His draft Zcash Improvement Proposal would stop ZCG’s automatic 8% share of each block subsidy and redirect it to the Network Sustainability Mechanism, a protocol-level reserve.
Why the treasury outgrew its purpose
Bowe’s case rests on arithmetic. ZCG’s public dashboard reports roughly 91,453 ZEC, about $8.8 million in USD, and around $2.4 million in outstanding grant liabilities. At an assumed $1,300 per ZEC, the proposal values the treasury at about $125.3 million. Against that stockpile, the program spent roughly $1.5 million in the first quarter of 2026, or about $6 million on an annualized basis. Even at a generous illustrative $10 million in annual spending, the draft notes the balance would cover roughly 12.5 years of outlays at $1,300 per ZEC.
The automatic stream, by contrast, keeps flowing. An 8% share of a 1.5625 ZEC block subsidy comes to 144 ZEC a day, or 52,560 ZEC a year, which is about $68 million annually at $1,300 per ZEC. Because the share is a fixed percentage of issuance, its dollar value rises whenever ZEC appreciates, regardless of the committee’s reserves, spending, or approved commitments. A fixed slice of new supply keeps growing even when the recipient has no use for it.
What the proposal actually changes
The draft is deliberately narrow. It does not seize any coins ZCG already holds, and the program can keep making grants from its existing balance under its current rules. The 12% Coinholder-Controlled Fund stream keeps its allocation and duration, the miner’s share is preserved, and Zcash’s 21-million supply cap, historical block validity, and transaction formats are left intact.
The only forward-looking change is where new issuance goes. The remaining 8% allocation would be credited to the NSM fund, the reserve defined in ZIP 237, as a ledger entry with no payment address or spending key. The value would be withheld from circulation rather than paid out to grant recipients, and it would flow for the rest of the stream’s existing term rather than being cut off early.
A decision the community has not made yet
The proposal is still a draft with no assigned ZIP number and no activation height. The change would depend on the NU7 upgrade and a revision to ZIP 214, and a separate deployment proposal would have to fix the exact block. As of late October 2026, no vote has settled the question.
The governance question
Bowe frames the choice as one between letting a discretionary grants committee keep accumulating automatically and routing future subsidy-funded grants through coinholder decisions instead. Continuing to add to the treasury, the draft argues, enlarges the resources that depend on one committee’s custody and governance. Ending the inflow limits that exposure without changing control of funds already allocated. That is a trade-off the community has not yet chosen to accept.
Adapted from Zcash Co-Founder Sean Bowe Proposes Shutting Off the $125M Community Grants Funding Stream.