Zcash Co-Founder Calls for End to Grants Funding as Treasury Hits $125M

Zcash co-founder Sean Bowe has proposed ending automatic funding for the network’s community grants program, arguing that its existing treasury can cover several years of expenses without receiving additional funds.

The draft proposal, published late Monday, would stop the automatic allocation and redirect the program’s remaining 8% share of newly issued ZEC into a reserve intended to support future mining rewards.

The committee would retain the assets it has already accumulated and continue distributing grants from its existing funds. After accounting for outstanding grant commitments, Bowe estimates the remaining treasury is worth approximately $125 million, based on an illustrative ZEC price of $1,300.

Bowe said the Zcash Community Grants (ZCG) program has accumulated more funding than it was originally designed to manage. He argued that the automatic funding stream should end, particularly given the millions of dollars the program is expected to receive before the allocation stops.

ZCG is governed by a five-member committee elected by a community advisory panel. The committee selects grant recipients without requiring a separate vote from ZEC holders.

Another funding mechanism receives 12% of newly issued ZEC. Unlike ZCG, its grant decisions are subject to quarterly votes by token holders, along with participation and approval requirements.

Bowe wants to preserve this larger allocation. His proposal argues that continuing to direct funds into ZCG’s separate custody and governance structure creates unnecessary risks when the program already has substantial reserves.

Under the plan, the redirected funds would flow into the Network Sustainability Mechanism, which is designed to help finance future mining rewards. The allocation would remain there for the rest of the grants program’s existing funding term.

Zcash Grants Treasury Estimated at $125 Million

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

The automatic funding mechanism continues to distribute funds regardless of the committee’s existing balance. At Zcash’s target issuance rate, ZCG receives approximately 144 ZEC per day, equivalent to roughly $68 million annually at the price assumption used in the proposal.

That inflow substantially exceeds the program’s reported expenses. The Financial Privacy Foundation, which administers ZCG’s funds, reported slightly more than $1.5 million in program expenses during the first quarter. Annualized, that amounts to approximately $6 million, less than 10% of the estimated annual funding.

The treasury’s purchasing power depends on ZEC’s market price. Even if the token falls to $500, Bowe estimates the existing funds could cover about five years of spending, assuming annual expenses of $10 million.

Outreach Grant Draws Community Scrutiny

The proposal comes amid criticism of a ZCG-funded outreach initiative that showcased private cryptocurrency payments at an adult-industry convention over the weekend.

The team behind the initiative, ZECsy, requested $550,000 to support activities at adult-industry events, cryptocurrency conferences, and workshops. Its proposal included helping workers who face banking restrictions accept payments while protecting their personal financial information.

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

The grant approval in August was not unanimous. Committee member Hanh opposed the funding, raising concerns about its cost and the evidence that the initiative would generate lasting adoption. Other committee members supported the project’s potential to reach new users. The nine-month funding period was intended to provide time to assess its results before considering additional support.

Bowe’s proposal does not specifically mention the ZECsy initiative. Instead, it focuses on ZCG’s existing reserves, ongoing funding inflows, and the risks associated with maintaining a separate funding structure.

The draft does not specify when the change would take effect. Implementation would require an amendment to Zcash’s network rules. Until such a change is approved and activated, the grants program will continue receiving approximately 144 ZEC each day.

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