Nov 4, 2026, 3:04 a.m. EST
2 min read
Summary
- Zcash Community Grants canceled a plan to send approximately 98,000 ZEC to future mining rewards, stating that funding adjustments should rely on the network’s standard governance procedures.
- The panel obtains 8 percent of newly minted ZEC, translating to roughly 144 coins daily, which has sparked questions regarding its expanding treasury, expenditure choices, and oversight.
- Alternative proposals aim to terminate, redirect, or alter the committee’s financial backing, though none have been approved, leaving automatic disbursements untouched.
The allocation panel responsible for distributing grants within the privacy-focused Zcash network has abandoned a scheme to transfer roughly 98,000 ZEC toward upcoming mining payouts, less than seven days after introducing it.
Zcash Community Grants, also known as ZCG, stated on Tuesday that it would abandon the initiative announced on October 29 amid backlash concerning the volume of capital entering the initiative. “We’ve decided not to take this proposal forward,” the committee shared, noting that subsequent financial allocations ought to be determined by the regular governance framework of Zcash.
The five-member ZCG board reviews and sanctions grants for builders and community initiatives without requiring token holder votes for individual awards. It captures 8% of all newly minted ZEC, equaling about 144 coins each day, and its reserve has expanded sufficiently to sustain years of operations. This accumulation has prompted developers and ZEC owners to question why the continuous inflow persists.
The controversy intensified after a ZCG-financed outreach initiative named ZECsy showcased privacy transactions at an adult entertainment convention in New Jersey during late October. Detractors challenged the oversight and expenditures of the group. Proponents countered that sex workers, who frequently encounter banking limitations, represent a core demographic that financial privacy initiatives should target.
What ZCG had offered
The strategy would have shifted 36,200 ZEC out of the board’s approximate 91,500-ZEC reserve into the Network Sustainability Mechanism, a pool designed to supplement block rewards for miners over time. Additionally, it would have reduced ZCG’s projected revenue leading up to the 2028 halving from roughly 109,000 ZEC down to 47,000, with further reductions approaching 2032.
Every single coin directed into that reserve represents capital unavailable for development, meaning the conflict centers on who oversees Zcash capital and its ultimate destination.
Zcash co-founder Sean Bowe initially suggested terminating the automated funding of ZCG entirely.
He subsequently collaborated with Zcash creator Zooko Wilcox on a separate draft document that would compel ZCG to transfer 50,000 ZEC into the reserve while channeling its subsequent income into a novel development and legal defense fund. Zcash developer Daira-Emma Hopwood suggested maintaining the 8% allocation but redirecting grants toward driving broader ZEC adoption.
None of these strategies have been enacted. ZCG continues to gather around 144 ZEC daily until a protocol upgrade modifies the parameters.
Read More: Zcash co-founder proposes ending grants funding, citing $125 million treasury
Originally published at https://www.coindesk.com/markets/2026/11/04/zcash-grants-committee-drops-plan-to-redirect-98-000-zec-to-future-mining-rewards.
