Zcash Community Grants has scrapped its plan to transfer approximately 98,000 ZEC into future mining rewards after facing resistance from the community. The withdrawal leaves the network facing an unresolved funding debate, with proposals ranging from ending the committee’s automatic allocations to retaining the existing grants structure.
The committee responsible for distributing development funding across the privacy-focused Zcash ecosystem has reversed its proposal to redirect nearly 98,000 ZEC toward miner incentives, only days after putting the plan forward.
In a statement published Tuesday, Zcash Community Grants (ZCG) confirmed it would abandon the initiative introduced on October 29. The committee said it had decided against moving forward with the proposal and maintained that future funding decisions should follow the network’s established governance procedures.
ZCG consists of five members who oversee grants for developers and ecosystem projects without requiring individual coinholder approval for every distribution. The committee currently receives 8% of newly issued ZEC, amounting to approximately 144 coins daily. Its growing treasury can already support several years of development, raising concerns among developers and tokenholders about whether continued automatic funding is necessary.
Tensions escalated following an outreach campaign funded by ZCG. The initiative, known as ZECsy, promoted privacy-focused payments at an adult-industry event in New Jersey in late October. The campaign prompted questions about the committee’s spending priorities and oversight.
Defenders of the initiative argued that privacy-focused financial services can benefit sex workers, who frequently experience difficulties accessing conventional banking facilities.
Competing Proposals Put Zcash Funding Under Scrutiny
ZCG’s abandoned plan involved transferring 36,200 ZEC from its approximately 91,500-ZEC treasury into the Network Sustainability Mechanism, a reserve designed to supplement mining rewards over time.
It also proposed reducing the committee’s anticipated funding through the 2028 halving from approximately 109,000 ZEC to 47,000 ZEC, with allocations declining further toward 2032.
The disagreement highlights a broader question about how Zcash should distribute its available resources between mining incentives, network development and community initiatives. Funds directed toward mining rewards would no longer be available for developer grants, making the allocation decision particularly contentious.
Zcash co-founder Sean Bowe previously called for an end to ZCG’s automatic funding arrangement.
Bowe subsequently worked with Zcash founder Zooko Wilcox on another proposal that would transfer 50,000 ZEC into the Network Sustainability Mechanism while directing the committee’s future allocations into a separate development and legal-defense fund.
Another proposal from Zcash developer Daira-Emma Hopwood suggested keeping the existing 8% allocation but changing the grants program’s priorities to encourage broader adoption and usage of ZEC.
For now, none of these alternatives has been approved. ZCG therefore continues to receive approximately 144 ZEC per day under the existing rules, with any changes dependent on a future network upgrade.
