Zcash is set to mark its 10th anniversary on Oct. 28, reaching the milestone after a decade of protocol upgrades and recurring funding for development. Grayscale says one of the network’s distinguishing features has been its choice to route part of block rewards directly to developer and ecosystem programs rather than relying entirely on outside capital or donations.
That funding structure is now under renewed debate. A draft proposal from Zcash co-founder and protocol developer Sean Bowe would change how part of the current 20% development allocation is handled, while leaving miners’ share of rewards and the cryptocurrency’s maximum supply unchanged.
A funding model unlike Bitcoin’s
Under Zcash’s current structure, miners receive 80% of ZEC block rewards and 20% is reserved for development-related uses. Grayscale argues that arrangement has given the privacy-focused network a built-in source of support for ongoing technical work and ecosystem programs.
The firm contrasts that approach with Bitcoin, where development is not funded through the same kind of protocol-level reward split. In Zcash’s case, the allocation has been part of what Grayscale presents as a system designed to keep the network evolving over time.
Draft proposal would redirect the 8% ZCG subsidy
The current Dev Fund directs 8% of block rewards to Zcash Community Grants, or ZCG, with another 12% going to the Coinholder-Controlled funding mechanism. Bowe’s draft Zcash Improvement Proposal would end the 8% block subsidy now flowing to ZCG and instead redirect it to the Network Sustainability Mechanism, or NSM.
Under the proposal, those ZEC would not immediately enter circulation but would be withheld through the new mechanism. Bowe argues that ZCG already holds sufficient reserves to continue making grants, and the proposal would not touch that existing treasury.
The draft would also preserve the separate 12% allocation, keep miners’ 80% share intact, and leave ZEC’s maximum supply unchanged. The discussion points to an unresolved question for the network as it enters its second decade: not whether development should be funded, but how that funding should be distributed.
A decade of repeated privacy upgrades
Zcash’s technical changes have been especially visible in its shielded pools. The network launched with Sprout, later moved to Sapling in 2018, and then to Orchard in 2022, with each stage reshaping parts of its privacy design rather than simply leaving the original system in place.
Most recently, the Ironwood upgrade in 2026 addressed a code vulnerability and introduced quantum-recoverable addresses as well as formal verification. Formal verification uses mathematical methods to test whether software satisfies specified security properties, a feature that has growing relevance for privacy-oriented infrastructure.
Security and sustainability remain the next focus
Grayscale says future work is likely to center increasingly on transaction capacity, post-quantum preparedness, and cybersecurity threats that may be amplified by artificial intelligence. For a privacy-focused network, those issues carry a double burden because the system is expected to protect both user funds and the confidentiality of transactions.
That gives the anniversary added significance. After 10 years of protocol-funded development, the next confirmed step is continued debate over Bowe’s draft proposal and, more broadly, over how Zcash should allocate development resources as priorities shift toward long-term sustainability and next-generation privacy security.
Source: news.bitcoin.com