Zcash co-founder Sean Bowe is calling for an end to automatic funding for the network’s community grants program, saying its existing treasury is large enough to support years of spending without further allocations.
Bowe outlined the proposal in a draft published late Monday. The plan would stop the automatic distribution of funds to Zcash Community Grants (ZCG) and redirect its remaining 8% share of newly issued ZEC into a reserve for future mining rewards.
The committee would retain the funds it has already accumulated and continue awarding grants from its current treasury. After subtracting outstanding commitments, Bowe estimates the remaining balance at approximately $125 million, based on an assumed ZEC price of $1,300.
He argues that ZCG has grown beyond the scale its original funding model was designed to support, making further automatic payments difficult to justify.
Proposal Would Redirect ZCG’s 8% Allocation
ZCG operates through a five-member committee elected by a community advisory panel. The group selects projects for funding without requiring a separate vote from ZEC holders.
Zcash also has another funding program that receives 12% of newly issued ZEC. That program uses quarterly token-holder votes to determine grant allocations, subject to participation and approval conditions.
Bowe’s proposal would leave the 12% allocation intact while ending ZCG’s separate funding stream. He argues that directing additional funds into ZCG’s independent custody and governance arrangements creates unnecessary exposure when the committee already holds substantial reserves.
Instead, the program’s 8% allocation would be transferred to the Network Sustainability Mechanism, which is intended to help finance mining rewards in the future. The funds would remain there for the rest of the grants stream’s current term.
Existing Treasury Far Exceeds Spending
ZCG’s dashboard listed approximately 91,453 ZEC alongside $8.8 million, with about $2.4 million already committed to grant recipients. Using a token price of $1,300, Bowe values the remaining treasury at roughly $125.3 million.
The automatic allocation continues regardless of the amount held by the committee. At Zcash’s target issuance rate, ZCG receives around 144 ZEC each day, equivalent to approximately $68 million annually under the proposal’s price assumption.
By comparison, the Financial Privacy Foundation, which administers the grants program’s funds, reported slightly more than $1.5 million in program expenses during the first quarter. That would amount to roughly $6 million over a year, substantially below the projected annual inflow.
The treasury’s value remains dependent on ZEC’s market price. Even if the token trades at $500, Bowe estimates that current reserves could fund about five years of spending, assuming annual costs of $10 million.
Adult-Industry Outreach Grant Faces Questions
The funding proposal comes amid criticism of a ZCG-backed outreach initiative that demonstrated private payments at an adult-industry convention over the weekend.
ZECsy, the team responsible for the initiative, requested $550,000 for outreach at adult-industry events, crypto conferences, and workshops. The project aims to help workers who encounter banking restrictions receive payments while keeping personal financial details private.
The committee approved initial funding and the first nine milestones, totaling approximately $461,500. Images of ZECsy’s booth at the Exxxotica convention in Edison, New Jersey, were shared on X on Sunday.
The grant received mixed reactions when it was approved in August. Committee member Hanh opposed the spending, questioning both its cost and the evidence that it would lead to lasting adoption. Other members supported the project’s potential to introduce Zcash to new audiences. The nine-month funding period was intended to provide time to evaluate its results before considering additional money.
Bowe’s draft does not specifically reference the ZECsy project. Its central argument concerns ZCG’s substantial reserves and the continued flow of automatic funding.
The proposal has no confirmed implementation date and would require a change to Zcash’s network rules. Until the change is approved and activated, ZCG will continue receiving roughly 144 ZEC per day.
