Zcash holders to vote on pulling 50,000 ZEC from the grants treasury

Zcash holders are set to start voting next week on a plan that would take 50,000 ZEC out of the network's grants treasury. Instead of being spent on grants, that value would flow back to miners through future block rewards.

The proposal comes from co-founders Sean Bowe and Zooko Wilcox, writing with Jason McGee. It would reshape how Zcash pays for development, and it arrives days after the grants committee pulled a funding plan of its own following community pushback.

The draft Zcash Improvement Proposal, or ZIP, was merged into the project's specifications repository on Wednesday. It does two main things.

First, it asks Zcash Community Grants (ZCG) to transfer 50,000 ZEC from its existing treasury into the Network Sustainability Mechanism, known as the NSM. Second, it would end ZCG's automatic 8% slice of block rewards once the NU7 network upgrade arrives.

That 8% stream would not vanish. It would be redirected into a new locked pool called the "Future Dev and Legal Defense Fund."

Any spending from the new fund would require its own proposal.

The NSM, created under ZIP 237, works like a slow-release reserve. ZEC that goes into it is not spent all at once. It gets paid out to miners gradually over time as part of their rewards.

So the 50,000 ZEC would not be burned or handed to a new committee. It would be parked in a mechanism that drips it back into the mining economy, block by block.

ZCG currently holds approximately 91,453 ZEC, along with roughly $8.8 million in cash. If the 50,000 ZEC transfer goes through, the committee would be left with an estimated 41,453 ZEC.

The committee also carries about $2.4 million in outstanding grant liabilities. Those are commitments to grantees that already exist on the books.

Then there is the ongoing income. ZCG currently takes in about 144 ZEC per day from its share of block rewards. Under the draft, that inflow would stop after NU7.

For scale, 50,000 ZEC works out to just under a year of that daily income at the current rate. The committee is being asked to give up both a large chunk of its stockpile and the tap that refills it.

This proposal did not appear in a vacuum. ZCG had floated its own plan involving approximately 98,000 ZEC, and it withdrew that proposal on November 3, 2026, after criticism from the community.

The co-founders' draft is dated October 29, 2026. It effectively offers a competing vision for what should happen to the grants treasury and the 8% funding stream.

The draft also remains unfinished in formal terms. It has not been assigned a ZIP number, and there is no activation schedule.

Beyond the vote, the plan needs broad community support and a network upgrade before any of it takes effect.

For builders who depend on grants, ZCG would keep an estimated 41,453 ZEC and approximately $8.8 million in cash against $2.4 million in existing liabilities. That leaves room to honor current commitments, but without the 144 ZEC per day inflow, every future grant would draw down a pool that no longer refills.

The name of the new fund is also worth noting. Labeling it a "Future Dev and Legal Defense Fund" signals that the authors want money set aside for both engineering and potential legal needs, rather than routing everything through one grants process.

There is no activation date, no ZIP number, and the change depends on NU7 shipping.