Zcash Co-Founder Proposes Redirecting 8% Block Rewards

Zcash co-founder Sean Bowe has proposed redirecting the 8% share of block subsidies currently allocated to Zcash Community Grants (ZCG) to the Network Sustainability Mechanism (NSM). According to CryptoNews, the proposal calls for ending new ZCG grant approvals while allowing previously approved milestones to be paid before transferring remaining treasury funds to the reserve.

Proposed Changes and Timeline

The proposed changes would take effect with the upcoming NU8 network upgrade. A separate 12% allocation for Coinholder Grants and the existing mining reward share would remain unchanged under the proposal. The redirected ZEC would remain in the reserve until February 2031, when the Network Sustainability Mechanism is expected to begin releasing funds through future mining rewards.

Governance and Advisory Panel Concerns

The proposal raises concerns over ZCG’s governance structure, arguing that funding decisions made by its committee do not always reflect the preferences of ZEC holders. Currently, the grant program is overseen by representatives elected through the Zcash Community Advisory Panel (ZCAP), whose membership is determined by the Zcash Foundation. The text notes that ZCAP has roughly 200 members, with 72 individuals having previously received ZCG grants.

Disagreements over governance were highlighted by a February 2026 coinholder vote that saw 98.6% opposition to funding Zcash Shielded Assets (ZSAs), contrasted with 70.4% support among ZCAP participants. ZCG subsequently approved another $455,000 for ZSA development in June.

Key facts

• Sean Bowe proposed redirecting an 8% block subsidy allocation from Zcash Community Grants to the Network Sustainability Mechanism.
• Changes would take effect with the NU8 upgrade, ending new ZCG grant approvals while honoring previously approved milestones.
• Redirected funds would stay in reserve until February 2031 for future mining rewards.
• A February 2026 coinholder vote returned 98.6% opposition to Zcash Shielded Assets, while 70.4% of ZCAP participants supported it.