Zcash Rejects Proposal to Divert 98,000 ZEC Toward Future Mining Rewards

Zcash Community Grants has scrapped its controversial plan to redirect nearly 98,000 ZEC toward future mining rewards following backlash from developers and community members. The withdrawal leaves the network’s funding debate unresolved, with several alternative proposals still competing for support.

The committee responsible for distributing development grants across the privacy-focused Zcash ecosystem has reversed its proposed funding changes just days after announcing the initiative.

Zcash Community Grants (ZCG) announced Tuesday that it would discontinue the proposal originally introduced on October 29. The committee said it would leave future funding decisions to Zcash’s established governance process rather than pursue the proposed reallocation.

ZCG operates through a five-member committee that approves financial support for developers and community projects without requiring coinholders to vote on every individual grant. The organization receives 8% of newly issued ZEC, equivalent to approximately 144 coins per day. Its treasury has expanded to a level that could sustain several years of development, raising concerns about the need for continued automatic funding.

The controversy intensified after ZECsy, a ZCG-funded outreach initiative, promoted private payments at an adult-industry convention in New Jersey in late October. The campaign prompted criticism over the committee’s spending priorities and accountability.

Supporters defended the initiative, arguing that financial privacy is particularly valuable to sex workers, many of whom encounter difficulties accessing conventional banking services.

Zcash Faces Competing Proposals Over Its Funding Structure

The abandoned plan would have transferred 36,200 ZEC from ZCG’s approximately 91,500-ZEC treasury into the Network Sustainability Mechanism, a reserve intended to supplement miners’ block rewards over time.

It also proposed cutting the committee’s expected funding through the 2028 halving from roughly 109,000 ZEC to 47,000 ZEC, with allocations declining further toward 2032.

The disagreement centers on how Zcash should distribute its resources between mining incentives and ecosystem development. Every coin moved into the mining reserve would reduce the amount available for developer funding and community initiatives.

Zcash co-founder Sean Bowe initially advocated eliminating ZCG’s automatic funding altogether.

He later collaborated with Zcash founder Zooko Wilcox on a separate proposal that would move 50,000 ZEC into the Network Sustainability Mechanism and redirect future allocations toward a new development and legal-defense fund.

Meanwhile, Zcash developer Daira-Emma Hopwood proposed retaining the existing 8% funding structure while shifting the grants program’s focus toward expanding ZEC adoption and encouraging greater real-world usage.

None of the proposed changes has been approved. For now, ZCG continues receiving approximately 144 ZEC daily under the existing rules until a future network upgrade modifies the funding mechanism.