Zcash co-founder Sean Bowe has proposed shutting down the automatic funding stream for the network’s community grants program, arguing that its existing reserves are sufficient to finance several years of operations.
In a draft proposal published late Monday, Bowe called for ending the program’s automatic allocation and redirecting its remaining 8% share of newly issued ZEC into a reserve designed to support future mining rewards.
The change would not require the committee to return funds it has already received. Zcash Community Grants (ZCG) would retain its current assets and continue funding projects from its existing treasury. After deducting outstanding grant commitments, Bowe estimates the remaining funds are worth roughly $125 million, assuming a ZEC price of $1,300.
Bowe argued that the grants program has accumulated more money than it was originally intended to handle, making continued automatic funding unnecessary.
Bowe Seeks to Redirect Zcash Grants Allocation
ZCG is overseen by a five-member committee selected through a community advisory panel. The committee decides which projects receive grants without requiring a separate vote from ZEC holders.
A separate funding program receives 12% of newly issued ZEC. Its grant decisions are put to quarterly votes by token holders, subject to participation thresholds and approval requirements.
Bowe’s proposal would leave that larger allocation unchanged. He contends that continuing to send funds to ZCG’s separate custody and governance structure introduces additional risk when the program already has substantial financial reserves.
Under the proposed arrangement, the redirected 8% allocation would move into the Network Sustainability Mechanism, which is intended to help fund future mining rewards. The funds would remain there for the remainder of the grants program’s existing funding term.
Treasury Reserves Outpace Grant Spending
ZCG’s dashboard showed holdings of approximately 91,453 ZEC and $8.8 million, while outstanding grant commitments totaled around $2.4 million. Based on a ZEC price of $1,300, Bowe calculated the remaining treasury value at approximately $125.3 million.
Despite those reserves, the automatic funding mechanism continues to distribute around 144 ZEC per day. At the assumed token price, that rate translates to roughly $68 million in annual funding.
The program’s spending is considerably lower. The Financial Privacy Foundation, which manages ZCG’s funds, reported slightly more than $1.5 million in program expenses for the first quarter. At that pace, annual expenses would reach about $6 million, representing less than 10% of the estimated yearly inflow.
The treasury’s dollar value will fluctuate with ZEC’s market price. Even at $500 per token, Bowe estimates that the existing funds could cover roughly five years of expenses, assuming annual spending of $10 million.
ZECsy Grant Fuels Debate Over Spending
The proposal emerged as a separate ZCG-funded outreach initiative faced criticism after demonstrating privacy-focused payments at an adult-industry convention over the weekend.
ZECsy, the team behind the initiative, sought $550,000 to organize activities at adult-industry events, cryptocurrency conferences, and workshops. The project aims to help workers facing banking restrictions accept payments without revealing sensitive personal financial information.
ZCG approved startup funding and the first nine milestones, totaling approximately $461,500. Photos of the project’s booth at the Exxxotica event in Edison, New Jersey, circulated on X on Sunday.
The grant, approved in August, divided committee members. Hanh opposed the proposal, questioning its cost and whether it would produce sustained adoption. Other members supported the team’s potential to introduce Zcash to new users. The nine-month funding period was designed to allow the committee to assess the project before considering further support.
Bowe’s draft does not refer directly to the ZECsy grant. Instead, it centers on the size of ZCG’s treasury and the continued flow of automatic funding.
No activation date has been established. The proposal would require changes to Zcash’s network rules, meaning the current allocation will continue until an amendment takes effect. In the meantime, ZCG is set to keep receiving approximately 144 ZEC daily.
