Zcash Grants Proposes $124M Compromise Amid Backlash

Zcash Community Grants (ZCG) has proposed redirecting approximately $124 million in existing and future Zcash funding toward mining rewards following mounting industry criticism regarding governance and accountability.

According to Cointelegraph, ZCG proposed transferring 36,200 ZEC from its roughly 91,500-ZEC treasury to the Network Sustainability Mechanism (NSM), which reserves coins for future mining rewards. If approved, the committee would retain about 55,200 ZEC, valued at roughly $70 million. The group also proposed forgoing about 62,000 ZEC, equal to $78.5 million, in future allocations and tapering its remaining funding until the 2032 halving. Under the current arrangement, ZCG’s automatic allocation is scheduled to end in 2028, but the alternative would extend reduced funding for another four years.

Governance and Accountability Concerns

The preliminary proposal aims to address industry dissatisfaction, though critics argue the changes do not go far enough. Helius co-founder and CEO Mert Mumtaz called the proposal inadequate, arguing that the treasury remains too large and that funding decisions should be accountable to ZEC holders. Gemini co-founder Tyler Winklevoss also questioned the committee's accountability following interactions on social media platform X.

The debate follows an earlier proposal by Zcash co-founder Sean Bowe to end ZCG's automatic 8% share of newly issued ZEC and redirect those funds to the NSM while leaving the existing treasury untouched. ZCG stated that the latest plan is preliminary, with a full proposal to follow for community consideration.

Key facts

• ZCG proposed redirecting about $124 million in ZEC toward mining rewards.
• The plan involves transferring 36,200 ZEC from its current treasury to the Network Sustainability Mechanism.
• The committee would forgo about 62,000 ZEC in future allocations and taper funding until 2032.
• Critics including Mert Mumtaz and Tyler Winklevoss raised accountability concerns regarding the treasury.