Zcash grants committee drops plan to redirect 98,000 ZEC to future mining rewards

The committee that hands out grants on privacy network Zcash has dropped a plan to redirect about 98,000 ZEC toward future mining rewards, less than a week after proposing it.

Zcash Community Grants, or ZCG, said Tuesday it would no longer pursue the proposal it floated on Oct. 29 in response to criticism over how much money flows into the program. “We’ve decided not to take this proposal forward,” the committee wrote, adding that future funding should be decided through Zcash’s usual governance process.

ZCG’s five-member committee approves grants for developers and community projects without a coinholder vote on each award. It gets 8% of all newly created ZEC, about 144 coins a day, and its treasury has grown large enough to fund years of work. That has led developers and ZEC holders to ask why the money keeps coming in.

The debate heated up after a ZCG-funded outreach project called ZECsy promoted private payments at an adult-industry convention in New Jersey in late October. Critics questioned the committee’s spending and accountability. Supporters said sex workers, who often face banking restrictions, are among the groups that financial privacy should be focused on.

What ZCG had offered

The plan would have moved 36,200 ZEC from the committee’s roughly 91,500-ZEC treasury into the Network Sustainability Mechanism, a reserve that tops up miners’ block rewards over time. It would also have cut ZCG’s expected income through the 2028 halving from about 109,000 ZEC to 47,000, tapering further toward 2032.

Every coin routed to that reserve is a coin that can’t be spent on development, so the fight is over who controls Zcash’s money and what it goes toward.

Zcash co-founder Sean Bowe first proposed ending ZCG’s automatic funding altogether.

He then joined Zcash founder Zooko Wilcox on a separate draft that would make ZCG send 50,000 ZEC to the reserve and redirect its future funding into a new development and legal-defense fund. Zcash developer Daira-Emma Hopwood has proposed keeping the 8% but refocusing grants on getting more people to use ZEC.

None of the proposals has been adopted. ZCG keeps collecting about 144 ZEC a day until a network upgrade changes the rules.