Zcash Community Grants has dropped a plan to commit part of its treasury and future income to mining rewards. Other proposals to change the committee’s funding still require community approval.
Zcash Community Grants (ZCG), which funds independent projects in the Zcash ecosystem, withdrew its plan to set aside roughly 98,000 ZEC for future mining rewards on November 3. In its official forum announcement, the committee said the discussion had moved quickly and it would not advance the proposal it introduced on October 29. It left decisions on future committee funding and use of its treasury to the community under existing governance rules.
The announcement did not change ZCG’s 8% share of newly issued ZEC or announce a funds transfer. The five-member elected committee funds independent teams working on wallets, developer tools, security audits, infrastructure and education; ZEC holders do not have to vote separately on every grant.
Where would the 98,000 ZEC have come from?
In its October 29 proposal, the committee said it was receiving more funding than it could spend well. It proposed setting aside part of its accumulated treasury and gradually reducing future ZEC income. The roughly 98,000 ZEC total combined existing holdings with income the committee had yet to receive.
| Component | Amount | Proposed source |
|---|---|---|
| Treasury contribution | 36,200 ZEC | The committee’s existing ZEC holdings |
| Forgone future income | About 62,000 ZEC | The difference between projected receipts of 109,000 ZEC and a reduced 47,000 ZEC |
| Total | About 98,000 ZEC | Two sources combined, not a completed payment |
The 109,000 ZEC and 47,000 ZEC figures covered different periods. Under existing rules, the committee expected to receive about 109,000 ZEC by the 2028 halving. Its taper would instead deliver about 47,000 ZEC in total, with shrinking payments spread through 2032. The roughly 62,000 ZEC difference was income the committee would forgo in the future.
The committee reported treasury holdings of about 91,500 ZEC as of October 21. It would have set aside about 36,200 ZEC with community approval. The rounded figures came from the committee; KriptoMeta did not independently count its reserves on November 4. The announcement did not list all its cash assets and liabilities either.
ZCG’s plan announced on October 29 and withdrawn on November 3
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When would miners receive more ZEC?
The proposed Network Sustainability Mechanism (NSM) would add the committed ZEC to later block rewards rather than pay miners immediately. In the ZIP 237 design, the network would track the reserve amount in a separate record; no one could spend it like an ordinary wallet balance. ZEC removed from circulation would later be reissued and paid to miners through block rewards. Setting ZEC aside for the reserve would therefore differ from permanent token burning.
The withdrawn plan would preserve miners’ current 80% share. Within the remaining 20%, allocations to ZCG and the separate grant fund voted on by ZEC holders would decline by about 3% each month, with the difference entering the NSM reserve. By 2032, that entire 20% would flow to the reserve.
The committee’s model projected that miners would earn about 20% less ZEC in 2029–2030 than under existing rules. It forecast slightly lower rewards in 2031–2032 too. As the accumulated reserve reached miners in later years, the model projected about 10% more ZEC in 2033, 30% more in 2037 and 50% more in 2041. Those were ZEC-denominated projections for a withdrawn proposal, not realized mining income or dollar returns.
The NSM design seeks to preserve the 21 million ZEC supply cap and four-year halvings. The rules for accumulating and later distributing the reserve would need to be implemented in a network upgrade. ZIP 237 still carried “Proposed” status when checked on November 4. ZCG did not announce the NSM’s activation in its withdrawal notice.
What does the separate 50,000 ZEC draft propose?
Sean Bowe, Zooko Wilcox and Jason McGee are the authors of the separate Future Dev and Legal Defense Fund draft. The three authors propose ending ZCG’s 8% income share when the network upgrade activates. For the rest of the current funding term, the same share would accumulate in a locked fund for future development and legal defense. Withdrawal of the committee’s 98,000 ZEC plan did not approve that alternative.
The authors also ask ZCG to donate 50,000 ZEC from its treasury to the NSM. If the community accepts the proposal, ZCG would instruct the Financial Privacy Foundation, which holds the assets, to make the transfer within 30 days. The ZEC would first go to an address no one can spend from, then be credited to the NSM reserve when the relevant network upgrade activates. Transaction identifiers would be made public once the transfer is mined. The donation remains conditional on acceptance; the 50,000 ZEC would not be added to the withdrawn plan’s 36,200 ZEC.
The community would need to accept a separate Zcash Improvement Proposal (ZIP) before anyone could spend ZEC from the new development and legal fund. Until then, no one could withdraw from the lockbox. ZCG could continue awarding grants from the treasury left after the donation. The authors do not call for taking its entire treasury or closing the program immediately.
The new fund would start in a network upgrade after NU7 and before the third halving in 2028, when the current grant term ends. The authors do not specify an activation block height, and no implementation has been provided. The proposed 30-day donation window would start when the community accepts the proposal, rather than when the network upgrade activates.
ZCG did not endorse a particular alternative in its withdrawal notice. The committee also did not say when the community would make a new funding decision or provide a new payment timetable.
