Zcash Community Grants Offers $124M Treasury Compromise Amid Backlash

Zcash Community Grants (ZCG) has proposed redirecting roughly $124 million in existing and future funding toward future mining rewards, in an attempt to defuse a governance revolt over the size and oversight of its treasury. Industry figures rejected the offer as inadequate within hours.

On Thursday, ZCG put forward a plan to transfer 36,200 ZEC from its treasury of roughly 91,500 ZEC to the Network Sustainability Mechanism (NSM), the reserve that sets aside coins for future block rewards. At current prices, the transferred tranche is worth about $46 million. The committee would retain approximately 55,200 ZEC, worth about $70 million at the time of writing.

The proposal goes further than a one-off transfer. ZCG also proposed forgoing about 62,000 ZEC — approximately $78.5 million — in future allocations, and tapering its remaining funding until the 2032 halving. Taken together, the two measures would push about 98,000 ZEC, or roughly $124 million, back toward future block rewards rather than grant spending.

What does the compromise change for holders?

The plan alters ZCG's structural position in two ways. First, it shrinks the discretionary treasury the committee controls today. Second, it trades duration for size: under the current arrangement, ZCG's automatic allocation is scheduled to end in 2028. The alternative on the table would extend reduced funding for another four years, stretching the committee's mandate toward the 2032 halving while lowering its annual draw.

For practitioners, the practical question is whether a smaller but longer-lived allocation answers the actual complaint. The backlash has centered on governance and accountability — who answers for grant decisions and to whom — rather than purely on the number of coins held.

ZCG said the plan was preliminary, with a full proposal to follow for community consideration. That leaves the final mechanics, including the taper schedule and any accountability provisions, unresolved.

Critics say the numbers miss the point

Helius co-founder and CEO Mert Mumtaz called the proposal "nowhere near good enough." He argued the treasury was already too large and that funding decisions should be accountable to ZEC holders rather than to a self-perpetuating committee.

Gemini co-founder Tyler Winklevoss also questioned the committee's fitness to oversee the fund. After Mumtaz noted that a ZCG committee member had unfollowed him on X, Winklevoss said such behavior made someone unqualified to oversee $110 million in treasury assets.

The dispute has a precedent. Zcash co-founder Sean Bowe earlier proposed ending ZCG's automatic 8% share of newly issued ZEC and redirecting that stream to the NSM, while leaving the existing treasury untouched. The new ZCG proposal effectively concedes more than Bowe's framework on the treasury itself, but extends the committee's runway well beyond his implicit end date.

The context is broader than internal politics. A Winklevoss-backed Zcash exchange-traded fund has filed with the U.S. Securities and Exchange Commission for a Nasdaq listing, placing the protocol's governance structure in front of a regulatory and institutional audience that will scrutinize how treasury decisions are made and documented.

For now, the decision rests with the community. ZCG's full proposal, once published, will determine whether the 98,000-ZEC redirection survives community vote — and whether the 2032 taper comes with the accountability mechanisms critics have demanded.