Zcash grants group offers $124M compromise as governance backlash grows

Zcash grants group proposes redirecting $124M to mining rewards

Zcash Community Grants (ZCG), the committee that hands out Zcash (ZEC) development funding, has proposed giving up most of its funds. It wants to redirect about 98,000 ZEC — roughly $124 million — toward future mining rewards. Critics say the plan still does not answer their concerns about who controls the money and how it is accounted for.

ZCG published the preliminary plan on Thursday, Oct. 30, on the Zcash community forum. The group said a full proposal will follow for community consideration.

Key numbers in the proposal

• ZCG would transfer 36,200 ZEC from its treasury — a fund holding about 91,500 ZEC — to the Network Sustainability Mechanism (NSM), which reserves coins for future mining rewards.
• After the transfer, the committee would keep about 55,200 ZEC, worth about $70 million at the time of writing.
• It would also forgo about 62,000 ZEC (about $78.5 million) in future allocations and taper its remaining funding until the 2032 halving — the scheduled event when mining rewards are cut.
• Combined, the changes would redirect about 98,000 ZEC (about $124 million) toward future block rewards.

ZCG's automatic allocation is currently scheduled to end in 2028. Its alternative would extend reduced funding for another four years.

What the critics say

Helius co-founder and CEO Mert Mumtaz called the proposal “nowhere near good enough.” He said the treasury was already too large and argued that funding decisions should be accountable to ZEC holders.

Gemini co-founder Tyler Winklevoss also questioned the committee's accountability. His comment came after Mumtaz said a committee member had unfollowed him on X. Winklevoss said such behavior made someone unqualified to oversee $110 million.

The backlash follows an earlier proposal from Zcash co-founder Sean Bowe to end ZCG's automatic 8% share of newly issued ZEC and redirect it to the NSM, while leaving the existing treasury untouched.

What is confirmed and what is still open

Confirmed: ZCG published the preliminary proposal and the figures above, and said a full proposal will follow. The criticism from Mumtaz and Winklevoss is also confirmed as public statements.

Still open: the plan has not been approved, and the exact final size and terms may change in the full proposal. The article's own figures vary slightly between the $46 million treasury transfer and the $124 million combined total — the larger number reflects the treasury transfer plus forgone future allocations together.

Why it matters

ZCG controls a large share of Zcash's development funding. How that money is spent, and who answers for it, affects the project's future direction. The dispute shows a wider tension in crypto projects funded by automatic issuance: communities are pushing grant committees toward direct accountability to token holders.

What happens next

ZCG said it will publish a full proposal for the community to consider. Approval has not happened yet.

Sources

• Cointelegraph