Zcash Faces Grants Funding Shake-Up as Treasury Reaches $125 Million

Zcash co-founder Sean Bowe has proposed stopping automatic funding for the network’s community grants program, arguing that its existing treasury is sufficient to cover several years of expenses without further allocations.

In a draft proposal released late Monday, Bowe suggested ending Zcash Community Grants’ (ZCG) automatic funding stream and redirecting its remaining 8% share of newly issued ZEC into a reserve for future mining rewards.

The proposal would leave the committee’s existing assets untouched, allowing it to continue supporting projects from its current treasury. After accounting for outstanding grant commitments, Bowe estimates the remaining funds are worth approximately $125 million, using an illustrative ZEC price of $1,300.

He said the program has accumulated more money than its original funding model was designed to accommodate, making continued automatic allocations increasingly difficult to justify.

Bowe Proposes Ending ZCG’s Automatic Funding

ZCG is run by a five-member committee elected by a community advisory panel. Its members approve grants independently, without requiring a separate vote from ZEC holders.

Another funding program receives 12% of newly issued ZEC and distributes grants through quarterly token-holder votes, subject to participation and approval requirements. Bowe’s proposal would preserve this allocation while ending the separate funding stream for ZCG.

He argues that continuing to channel funds into ZCG’s distinct custody and governance structure adds unnecessary risk when the committee already holds substantial reserves.

Under the plan, the redirected allocation would go to the Network Sustainability Mechanism, which is designed to support mining rewards in the future. The funds would remain there for the remainder of the grants program’s existing funding term.

Treasury Holdings Exceed Annual Grant Expenses

ZCG’s dashboard listed approximately 91,453 ZEC and $8.8 million, with around $2.4 million committed to grant recipients. Based on a ZEC price of $1,300, Bowe estimates the remaining treasury at roughly $125.3 million.

Despite its substantial reserves, ZCG continues to receive approximately 144 ZEC each day under Zcash’s target issuance schedule. At the assumed price, that represents about $68 million in annual funding.

The program’s reported expenses are far lower. The Financial Privacy Foundation, which manages ZCG’s funds, reported slightly more than $1.5 million in program expenses during the first quarter. At the same rate, annual costs would total roughly $6 million, well below the projected yearly inflow.

Bowe estimates that even if ZEC dropped to $500, the existing treasury could cover around five years of expenses, assuming annual spending of $10 million.

ZECsy Grant Draws Attention to Funding Decisions

The proposal follows criticism of a ZCG-funded outreach initiative that showcased privacy-focused payments at an adult-industry convention over the weekend.

ZECsy, the team behind the initiative, requested $550,000 to fund activities at adult-industry events, cryptocurrency conferences, and workshops. The project aims to help workers facing banking restrictions accept payments without revealing personal financial information.

The committee approved startup funding and the first nine milestones, totaling approximately $461,500. Images of ZECsy’s booth at the Exxxotica convention in Edison, New Jersey, circulated on X on Sunday.

The grant, approved in August, divided committee members. Hanh opposed the proposal, questioning its cost and the evidence of lasting adoption. Other members supported the initiative’s potential to introduce Zcash to new users. The nine-month funding period was intended to give the committee time to assess its results before considering further support.

Bowe’s draft does not specifically reference the ZECsy grant. Instead, it focuses on ZCG’s accumulated reserves and the continued flow of automatic funding.

The proposal has no set implementation date and would require a change to Zcash’s network rules. Until the change is approved and activated, ZCG will continue receiving approximately 144 ZEC daily.