Zcash grants committee floats $124 million shift to mining rewards amid governance criticism

What the committee proposed

According to the proposal released Thursday, Zcash Community Grants would transfer 36,200 ZEC from its treasury, which stood at roughly 91,500 ZEC, into the Network Sustainability Mechanism, a reserve intended for future mining rewards.

If the change were approved, the committee said it would keep about 55,200 ZEC. The source report said that remaining balance was worth around $70 million at the time of writing.

ZCG also said it would forgo about 62,000 ZEC in future allocations and reduce its own funding on a tapering basis until the 2032 halving. Under the current arrangement, the group’s automatic allocation is set to end in 2028, so the alternative would continue reduced funding for four additional years.

Why the proposal is being framed as a compromise

The plan appears to respond to a growing dispute over how much of Zcash’s newly issued supply should continue to flow automatically to the grants body. By redirecting both part of the treasury and future allocations to the Network Sustainability Mechanism, the committee is proposing that more ZEC be reserved for future miners rather than grants.

At the same time, the structure does not fully eliminate ZCG’s funding. Instead, it would leave the committee with a smaller treasury and a longer, reduced runway through the next halving cycle. ZCG described the idea as preliminary and said a fuller proposal would be presented for community consideration.

Critics say governance concerns remain unresolved

The financial concession has not settled criticism from some outside observers, who argue that the central issue is accountability rather than only the size of the treasury. Helius co-founder and CEO Mert Mumtaz said the proposal was "nowhere near good enough," arguing that the treasury was already too large and that decisions over those funds should be accountable to ZEC holders.

Gemini co-founder Tyler Winklevoss also questioned the committee’s suitability to control such a large pool of funds. His comments followed Mumtaz’s claim that a committee member had unfollowed him on X, which Winklevoss cited as evidence of poor judgment in overseeing what he described as about $110 million.

How it fits into the broader debate

The latest proposal follows an earlier intervention from Zcash co-founder Sean Bowe, who had proposed ending ZCG’s automatic 8% share of newly issued ZEC and redirecting that stream to the Network Sustainability Mechanism.

Bowe’s idea differed in one major respect: it would leave the existing ZCG treasury untouched while stopping the automatic allocation going forward. The committee’s new approach instead combines a partial treasury transfer with a surrender of future allocations, suggesting an effort to answer pressure from critics without fully abandoning the grants structure.

For now, the next confirmed step is a more detailed proposal from ZCG for wider community review. Until that is published and considered, the plan remains a preliminary attempt to resolve a governance dispute that now extends beyond funding levels to questions about oversight and representation.