Sean Bowe, co-founder of Zcash, put forward a suggestion on Monday aimed at halting automatic financial backing for the Zcash Community Grants initiative while channeling its ongoing 8% portion of block rewards into the platform’s Network Sustainability Mechanism.
“It’s time to turn off the ZCG funding stream,” Bowe stated on X. “ZCG has over $125M in funding, and will receive millions more before the spigot is turned off. The program was never designed to handle this amount of funding.”
This initiative arrives nearly six years following the launch of the program back in 2020 as Zcash Open Major Grants. Developers looking for financial backing can obtain it via open grants or invite-only grants, with clearances authorized by a panel of five individuals chosen by the Zcash (ZEC) user base.
Based on the draft proposal, ZCG currently possesses 91,452.98 ZEC alongside roughly $8.8 million in dollar-pegged holdings, against $2.4 million in pending grant obligations. Bowe noted that the present 8% distribution structure can generate in excess of $68 million worth of ZEC each year, significantly surpassing the $1.53 million in ZCG expenditures disclosed by the Financial Privacy Foundation for the opening quarter of 2026.
Should it pass, the recommendation would shift the distribution toward the NSM for the remainder of the current funding period’s lifecycle without expanding the total circulating volume of Zcash, according to the document.
At the same time, a distinct 12% distribution directed to the Coinholder-Controlled Fund would stay the same, Bowe explained. ZCG would still maintain governance over its current reserves and could carry on sanctioning awards and fulfilling active obligations, he mentioned.
The submission lacks a designated activation block height and is absent from the presently outlined NU7 blockchain upgrade. It would necessitate a forthcoming network upgrade to become operational.
Zcash traded around $1,248 on Tuesday, registering a 2% increase over the preceding 24 hours, based on data from The Block’s ZEC price tracker.
Originally published at https://www.theblock.co/news/ecosystems/2026-10-27-zcash-co-founder-proposes-ending-grants-subsidy-citing-125-million-treasury-431847.
