Zcash co-founder Sean Bowe has put forward a draft proposal to stop the automatic funding stream that currently supports Zcash Community Grants, arguing the program already holds enough assets to continue making awards for years without receiving additional newly issued ZEC.

Under the proposal, the grants program would keep its existing treasury and continue operating from those funds, while its current 8% share of newly created ZEC would be redirected into a reserve intended to support future mining rewards. The draft has no activation date and would require a change to Zcash’s network rules.

A proposal to end new inflows

Bowe’s draft would end the auto-allocation that now sends 8% of newly created ZEC to Zcash Community Grants, or ZCG. Instead, that portion would flow into the Network Sustainability Mechanism, a reserve designed to support mining rewards in the future.

He does not propose shutting down the grants program itself. ZCG would retain the assets already under its control and would continue awarding grants from that pool. According to Bowe’s calculation, those assets amount to roughly $125 million after outstanding commitments, using an illustrative ZEC price of $1,300.

How Zcash’s grant programs are structured

ZCG is overseen by a five-member committee elected by a community advisory panel. That committee selects grant recipients without a separate vote by coinholders.

A separate funding stream in the Zcash ecosystem receives 12% of newly created ZEC. Grants from that program are voted on by holders each quarter, subject to participation and approval thresholds. Bowe’s proposal would leave that larger allocation in place while changing only the automatic funding for ZCG.

Reasoning behind the draft

Bowe’s argument centers on the size of ZCG’s reserves and the fact that new funds continue to accumulate automatically. In the proposal, he says that continuing to add money to a structure with its own custody and governance setup increases risk when the program already has substantial resources available.

Under the draft, the redirected 8% allocation would remain in the Network Sustainability Mechanism for the rest of the existing term attached to the grants stream. The proposal therefore focuses on reallocating future issuance rather than reclaiming funds that ZCG already controls.

Scrutiny over outreach spending

The proposal arrived as ZCG faces criticism over an outreach grant tied to an adult-industry convention. Over the weekend, a ZCG-funded outreach program demonstrated private payments at Exxxotica, and photos from its booth circulated on X.

The committee had approved startup funding along with the project’s first nine milestones, for a total of about $461,500. While the timing overlaps with that criticism, the draft proposal frames its case around the grants program’s large treasury and ongoing inflows rather than around that single award alone.

What happens next

No activation date has been attached to the proposal, and it cannot take effect without a change to Zcash’s network rules. For now, it remains a draft outlining a possible shift in how part of Zcash’s newly issued coins would be distributed.

The clearest next step is whether the idea gathers enough support to advance into a formal network change. Until then, Zcash Community Grants continues to hold its current assets and to operate under the existing funding arrangement.

Source: www.coindesk.com