Zcash Co-Founder Moves to Cut Off $125M Community Grants Program

Zcash co-founder Sean Bowe has proposed ending the automatic funding stream to Zcash Community Grants (ZCG), arguing the program's treasury of more than $125 million far exceeds what it was built to manage.

Bowe made the case Tuesday on X. "ZCG has over $125M in funding, and will receive millions more before the spigot is turned off," he wrote. "The program was never designed to handle this amount of funding."

The claim invites scrutiny, but the on-chain numbers support the scale. ZCG's own dashboard listed 91,453 ZEC plus $8.8 million in cash as of Wednesday, with $2.4 million in outstanding grant commitments. At press-time prices, the ZEC holdings alone were worth roughly $111 million.

What would the proposal change?

Bowe shared a draft GitHub proposal that would redirect ZCG's 8% share of the Zcash (ZEC) block subsidy to the network's sustainability reserve. The grants program's existing funds would remain untouched, according to the draft.

The redirected allocation would flow into the Network Sustainability Mechanism until the current funding period ends in 2028. That mechanism holds ZEC out of circulation and gradually reissues it through future block rewards — effectively a delayed-release treasury rather than an immediate spend.

The distinction matters for ZEC's circulating supply. Pulling 8% of the block subsidy out of near-term grant disbursement and parking it in a lockbox would slow the pace at which those coins reach the market, though the reissuance schedule ultimately returns them.

The network already operates one such reserve. A separate development lockbox held 72,351 ZEC, worth approximately $89 million, according to data from ZecStats.

Put in plainer terms: the two pools together hold more than $200 million in ZEC-denominated value, a sum approaching the annual budget of a mid-sized public research lab, controlled by governance processes designed for a fraction of that amount.

Who else has pushed for an end to the dev fund?

Bowe is not the first figure to question the program's trajectory. In September, Haseeb Qureshi, managing partner at crypto venture capital firm Dragonfly, proposed ending the Zcash developer fund when its current funding period expires. Qureshi warned the fund risks being "politicized" as it approaches $100 million in value.

That prediction now looks conservative. ZCG's ZEC holdings alone have already surpassed the $100 million mark Qureshi cited, before counting the cash balance or the separate lockbox.

What Bowe's proposal does not address is equally notable. It does not specify how ZCG would allocate its existing treasury once automatic payments stop, nor does it outline an alternate long-term funding model for ecosystem development beyond the 2028 horizon. Ending the spigot is the easy part; the hard part — sustaining developer funding without politicizing it — remains unsolved.

Bowe's own framing carries a built-in caveat: he says ZCG "will receive millions more before the spigot is turned off," an implicit acknowledgment that any change requires community approval and implementation time under Zcash's governance process.

The proposal now enters that process as a GitHub draft. Zcash stakeholders face a decision window that closes with the 2028 funding period expiry, and the outcome will shape whether one of crypto's oldest privacy networks funds development through treasury disbursement or through locked, slowly released reserves.

In short: Bowe wants the grants machine switched off, not emptied, and the network must now decide if a $125 million treasury can govern itself.