Zcash Grants Committee Abandons Plan to Redirect 98,000 ZEC to Mining Rewards

Zcash Community Grants has withdrawn its proposal to allocate approximately 98,000 ZEC toward future mining rewards following criticism from the community. The decision leaves several competing proposals under discussion, including eliminating the committee’s funding entirely or maintaining the current grants structure.

The grants committee overseeing development and community initiatives for privacy-focused cryptocurrency Zcash has abandoned its plan to redirect roughly 98,000 ZEC toward mining incentives, just days after introducing the idea.

On Tuesday, Zcash Community Grants (ZCG) announced that it would not proceed with the proposal initially presented on October 29. The committee said the decision followed criticism surrounding the program’s funding and emphasized that future allocations should be determined through Zcash’s established governance framework.

ZCG operates through a five-member committee responsible for approving grants for developers and community projects without requiring a separate vote from coinholders for every award. The organization receives 8% of newly issued ZEC, equivalent to approximately 144 coins per day. Its accumulated treasury has become substantial enough to support development activities for several years, prompting questions from developers and tokenholders about the continued flow of new funds.

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

However, supporters defended the initiative, arguing that financial privacy is particularly important for sex workers, who frequently encounter restrictions when accessing traditional banking services.

What ZCG’s Proposal Would Have Changed

Under the withdrawn proposal, approximately 36,200 ZEC from the committee’s treasury of roughly 91,500 ZEC would have been transferred to the Network Sustainability Mechanism. This reserve is designed to gradually supplement miners’ block rewards.

The proposal would also have significantly reduced ZCG’s projected funding through the 2028 halving, lowering its expected allocation from approximately 109,000 ZEC to 47,000 ZEC. Funding would have continued declining toward 2032.

The central disagreement revolves around how Zcash’s financial resources should be distributed. Every ZEC transferred into the mining reserve would become unavailable for developer grants and ecosystem development, raising broader questions about funding priorities and control over the network’s resources.

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

Bowe later collaborated with Zcash founder Zooko Wilcox on a separate proposal that would require the committee to transfer 50,000 ZEC into the Network Sustainability Mechanism. Under that plan, its future allocations would instead be directed toward a newly established development and legal-defense fund.

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

None of the competing proposals has received approval so far. As a result, ZCG continues receiving approximately 144 ZEC daily until a future network upgrade introduces changes to the existing funding rules.

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