Zcash Community Grants has abandoned its proposal to redirect nearly 98,000 ZEC toward future mining rewards following strong objections from the community. The decision keeps the network’s funding structure unchanged for now, while alternative proposals to eliminate automatic grants or maintain the current system remain under discussion.
The five-member committee overseeing grants for the privacy-focused Zcash network has withdrawn its plan to shift a substantial portion of its funding toward miner incentives, less than a week after announcing the initiative.
Zcash Community Grants (ZCG) confirmed on Tuesday that it would no longer pursue the proposal first introduced on October 29. The committee said future funding arrangements should instead be determined through the network’s established governance process.
ZCG distributes funding to developers and community initiatives without requiring coinholders to approve each individual grant. The committee receives 8% of newly issued ZEC, equivalent to roughly 144 coins daily. Its treasury has accumulated enough funds to finance several years of development, prompting growing concerns about the need for continued automatic allocations.
The funding dispute intensified after ZECsy, an outreach project supported by ZCG, promoted privacy-focused payments at an adult-industry convention in New Jersey in late October. The initiative attracted criticism over the committee’s expenditure decisions and accountability.
Supporters, however, defended the campaign, arguing that financial privacy is especially important for sex workers who frequently encounter barriers to accessing traditional banking services.
Zcash Funding Debate Continues After Proposal Withdrawal
The withdrawn initiative proposed transferring 36,200 ZEC from ZCG’s treasury, which held approximately 91,500 ZEC, into the Network Sustainability Mechanism. The reserve is designed to provide additional support for mining rewards over time.
The plan also sought to reduce ZCG’s projected funding through the 2028 halving from approximately 109,000 ZEC to 47,000 ZEC, with further reductions anticipated through 2032.
At the heart of the disagreement is how Zcash should distribute its resources between mining incentives and ecosystem development. Redirecting funds toward the mining reserve would leave fewer coins available for developer grants and community projects.
Zcash co-founder Sean Bowe initially proposed completely ending ZCG’s automatic funding.
He later partnered with Zcash founder Zooko Wilcox on a separate proposal that would transfer 50,000 ZEC into the Network Sustainability Mechanism and redirect future committee allocations into a dedicated development and legal-defense fund.
Meanwhile, Zcash developer Daira-Emma Hopwood suggested preserving the existing 8% allocation while shifting the grants program’s focus toward increasing ZEC adoption and real-world usage.
None of the competing proposals has been approved. Consequently, ZCG continues receiving approximately 144 ZEC every day under the current funding arrangement until a future network upgrade changes the rules.
