Zcash Committee Rejects Redistribution of 98,000 ZEC

The Zcash Community Grants (ZCG) Committee, responsible for funding developers and community projects within the Zcash ecosystem, rejected a proposal to allocate approximately 98,000 ZEC for future miner rewards. The decision was announced on November 3, 2026, following discussions of the initiative with community members.

The initial plan was presented on October 29 and involved reducing funds allocated to the grant program. The committee intended to use part of the accumulated reserves and decrease future allocations, directing the freed-up tokens into a special network support mechanism.

However, the proposal sparked disagreements regarding funding management, grant distribution, and the committee's authority. As a result, ZCG abandoned further development of the initiative and stated that changes should be determined through the existing Zcash governance system.Zcash.

How the 98,000 ZEC was planned to be redistributed

Currently, ZCG receives 8% of newly issued ZEC tokens, or about 144 ZEC daily. The funds are used to provide grants to developers and projects related to ecosystem development.

As of the end of October, the committee's reserves amounted to approximately 91,500 ZEC. Under the initial proposal, ZCG was to allocate 36,200 ZEC from this amount to the Network Sustainability Mechanism (NSM) – a reserve mechanism intended to fund future miner rewards.

Simultaneously, the committee proposed reducing expected allocations until the 2028 halving from approximately 109,000 to 47,000 ZEC. The difference of about 62,000 ZEC was also planned to support future block rewards.

Thus, the total amount of redistributed funds would have been around 98,000 ZEC. However, this was not about a one-time transfer of the entire amount but a combination of transferring part of the existing reserves and reducing future funding.

What options the Zcash community is discussing

ZCG's rejection of the initial proposal did not end the discussion on ecosystem funding.

One of the co-founders of Zcash, Sean Bowe, previously suggested completely stopping the automatic allocation of 8% of newly issued ZEC to the committee. According to his initiative, future allocations should be directed to the NSM reserve, while already accumulated funds remain at ZCG's disposal to fulfill existing obligations.

Later, Bowe, along with Zcash founder Zooko Wilcox, presented an alternative project. It involves transferring 50,000 ZEC from the committee's reserves to the NSM and creating a separate fund for financing development and legal protection of the ecosystem.

Another approach was proposed by Zcash developer Daira-Hopwood. Her initiative suggests maintaining the current 8% funding share but changing grant priorities in favor of projects that promote broader use of ZEC.

None of the considered options have been adopted yet. Changing the current token distribution mechanism will require agreement on the relevant proposal and updating the network rules.

Until a new decision is made, the Zcash Community Grants will continue to receive about 144 ZEC daily. The main question for further discussion is what portion of newly issued tokens should be directed towards ecosystem development and what portion should ensure future miner rewards.