Zcash Community Grants, the five-member committee that helps fund development work for Zcash, has abandoned a proposal that would have redirected roughly 98,000 ZEC from its treasury and expected future funding toward mining rewards. The group said it had decided not to move ahead with the idea less than a week after first putting it forward.

The reversal keeps alive several competing ideas for what should happen to ZCG’s share of newly issued ZEC as debate intensifies ahead of the current development fund’s expiry in 2028.

A short-lived proposal

The withdrawn plan would have shifted about 36,200 ZEC from ZCG’s treasury, which was described at roughly 91,500 ZEC, into the Network Sustainability Mechanism. That mechanism functions as a reserve that releases funds to miners gradually over a period of decades.

ZCG had also proposed taking less than half of the newly minted ZEC it is otherwise due through the 2028 halving. Combined, the treasury transfer and reduced future allocation amounted to about 98,000 ZEC being steered away from the grants committee and toward miners over time.

Why the issue became contentious

ZCG currently receives 8% of all newly minted ZEC, or about 144 coins per day. With ZEC rising in price, that stream of funding has become much more politically sensitive inside the Zcash ecosystem.

Zcash founder Zooko described the situation as a “governance crisis.” Opposition to the grants committee sharpened around spending decisions, including criticism of a ZCG-funded campaign at an adult-industry convention. Zcash Labs’ Josh Swihart also argued that the Zcash development fund should come to an end.

Competing plans remain in play

With ZCG’s own proposal now off the table, attention turns to other options for the committee’s 8% share of issuance. The leading compromise, put forward by Sean Bowe and Zooko, would end ZCG’s direct 8% allocation rather than continue it in its current form.

Under that proposal, the 8% share would be placed into a locked fund intended for future development and legal defense. It would also have ZCG contribute 50,000 ZEC to the miners’ reserve, aiming to balance support for long-term network needs with pressure to reduce the committee’s immediate control over funds.

What comes next before 2028

The immediate result of the withdrawal is that no transfer of the roughly 98,000 ZEC will proceed under ZCG’s abandoned plan. Instead, the broader argument over funding, miner incentives, and governance remains unresolved.

The next confirmed milestone is the 2028 expiry of the current dev fund, which has made the allocation debate more urgent. Market moves continue in the background, with ZEC reported up about 11% over the past 24 hours, but the central question remains how the network will structure support for development and related needs after the existing arrangement ends.

Source: www.bankless.com