Zcash Co-Founders Propose Moving 50,000 ZEC From Grants Treasury to Miners

Zcash holders will begin voting next week on a draft proposal that would pull 50,000 ZEC out of the network's grants treasury and redirect that value to miners through future block rewards. The draft, authored by co-founders Sean Bowe and Zooko Wilcox together with Jason McGee, was merged into the project's specifications repository on Wednesday. It has not yet been assigned a ZIP number, and it carries no activation schedule.

The proposal lands days after the Zcash Community Grants committee, known as ZCG, withdrew its own funding plan of roughly 98,000 ZEC on November 3, 2026, following sustained community pushback. The co-founders' draft is dated October 29, 2026, and amounts to a competing vision for how the privacy network should fund development. Neither side has published an activation path that survives contact with the full community yet.

What would the draft actually change?

The proposal does two things. First, it asks ZCG to transfer 50,000 ZEC from its existing treasury into the Network Sustainability Mechanism, or NSM, a reserve created under ZIP 237. Second, it would terminate ZCG's automatic 8% slice of block rewards once the NU7 network upgrade ships.

That 8% stream would not disappear. It would be redirected into a new locked pool named the "Future Dev and Legal Defense Fund," and any spending from that fund would require a separate proposal.

The NSM operates as a slow-release reserve rather than an immediate spend. ZEC deposited into it is paid out to miners gradually, as part of block rewards, over time. In plain terms, the 50,000 ZEC would not be burned or handed to a new committee; it would sit in a mechanism that drips value back into the mining economy block by block.

How large is the money at stake?

ZCG currently holds approximately 91,453 ZEC alongside roughly $8.8 million in cash. If the transfer goes through, the committee would retain an estimated 41,453 ZEC. Against that, it carries about $2.4 million in outstanding grant liabilities — commitments to grantees that already exist on the books.

The committee also receives roughly 144 ZEC per day from its block reward share. The draft would shut off that inflow after NU7. For scale, 50,000 ZEC equals just under one year of income at the current daily rate. The committee is being asked to surrender both a large portion of its stockpile and the tap that refills it.

The takeaway: current commitments appear coverable, but the structural arithmetic of grant funding changes entirely.

Why is this fight happening now?

The proposal did not appear in a vacuum. ZCG had floated a plan involving approximately 98,000 ZEC and pulled it on November 3 after criticism. The co-founders' draft, dated four days before that withdrawal, effectively offers an alternative answer to the same question of who controls the treasury and the 8% stream.

The fund's name carries its own signal. Labeling it a "Future Dev and Legal Defense Fund" indicates the authors want capital reserved for engineering work and potential legal exposure, rather than routed through a single grants process. What the authors have not specified is who governs disbursement from that fund, beyond the requirement for a dedicated proposal.

The draft also remains formally unfinished. It lacks a ZIP number, an activation schedule, and a defined path to implementation. Before any of it takes effect, the plan needs broad community support and the NU7 network upgrade to ship.

What does this mean for builders and holders?

For developers who depend on grants, ZCG would keep an estimated 41,453 ZEC and approximately $8.8 million in cash against $2.4 million in liabilities. That leaves room to honor existing commitments. But without the 144 ZEC daily inflow, every future grant would draw down a pool that no longer refills.

For holders, the immediate question is narrower: whether to approve a transfer that moves half the grants treasury into a miner-facing mechanism, and whether to end a funding stream that has run automatically since the block reward split was set. The vote opens next week; the outcome of the NU7 activation, and any final ZIP assignment, remains the binding constraint on everything that follows.