Zcash Holders to Vote on Moving 50,000 ZEC From Grants Treasury

Zcash holders are preparing to vote on a proposal that would remove 50,000 ZEC from the network’s community grants treasury and redirect the value into its Network Sustainability Mechanism. The plan, backed by co-founders Sean Bowe and Zooko Wilcox alongside Jason McGee, would also end the grants program’s automatic share of newly issued ZEC and reserve that funding for future development and legal defence.

The proposed changes would reshape how Zcash finances developers and community projects, while leaving the grants committee with a smaller treasury and its existing grantmaking responsibilities.

Zcash proposal targets 50,000 ZEC

The draft Zcash Improvement Proposal was added to the project’s specifications repository, setting out two major changes to the network’s funding structure. Coinholder and community-panel polls are scheduled to run from November 16 through November 30.

The proposed 50,000-ZEC removal represents approximately 55% of the 91,453 ZEC held by Zcash Community Grants (ZCG) in the October treasury snapshot cited by the draft. ZCG finances independent developers, wallet providers and other projects supporting the privacy-focused cryptocurrency.

If the proposal is approved and activated through a future network upgrade, ZCG would have 30 days to remove the specified coins from circulation. Their value would be credited to the Network Sustainability Mechanism, a protocol-level reserve designed to return removed ZEC to circulation gradually through future block rewards.

The proposal therefore does not simply transfer the coins to another grants organisation. It changes how the network accounts for and releases that value over time.

New fund replaces ZCG’s 8% allocation

The second major change concerns ZCG’s existing 8% share of newly created ZEC. Under the draft, that funding stream would end when the proposal activates. The same allocation would instead flow into a new Future Dev and Legal Defense Fund Lockbox.

The fund would accumulate resources for future development and legal expenses, but it would initially have no spending mechanism. A separate Zcash Improvement Proposal would be required to establish how withdrawals could be authorised.

The arrangement would create a distinction between the existing grants treasury and the new reserve:

• ZCG treasury: The committee would retain its remaining assets and continue awarding grants.
• Future fund: The 8% block-reward allocation would accumulate in a restricted lockbox.
• Coinholder-Controlled Fund: Its separate 12% allocation would remain unchanged.

This structure would preserve a source of funding for future development without allowing immediate spending from the new reserve.

Zcash funding debate enters next phase

The proposal follows growing debate over the size of ZCG’s treasury and whether the programme should continue receiving automatic block-reward funding. The recent increase in ZEC’s market value has intensified scrutiny of how much capital the grants organisation holds relative to its spending needs.

The Network Sustainability Mechanism provides an existing framework for managing coins removed from circulation. Its activation under the NU7 upgrade gives the new proposal a mechanism for directing the 50,000 ZEC into a protocol-level reserve.

However, the November vote does not itself implement the changes. Network-level approval and a subsequent upgrade remain necessary.

Conclusion

The proposed restructuring would reduce ZCG’s existing holdings while redirecting its future 8% allocation into a restricted development and legal-defence reserve. The November 16–30 polling period will provide an important measure of community support, but the final outcome depends on the network’s governance and upgrade process.