Zcash Community Grants Proposes Redirecting $124 Million to Mining Rewards

Zcash Community Grants (ZCG) proposed redirecting approximately $124 million of existing and future funding to mining rewards, according to a source. Critics argue that the plan does not address governance and accountability issues. The proposal includes transferring about $46 million in Zcash tokens from the treasury to future block rewards.

On Thursday, ZCG proposed transferring 36,200 ZEC from its treasury, which holds approximately 91,500 ZEC, to the Network Sustainability Mechanism (NSM), which reserves coins for future mining rewards. If the plan is approved, the committee will retain about 55,200 ZEC worth approximately $70 million at the time of publication.

The committee also proposed relinquishing about 62,000 ZEC ($78.5 million) in future allocations and reducing the remaining funding until the 2032 halving. Together, the changes would redirect about 98,000 ZEC (approximately $124 million) to future block rewards. Currently, the automatic distribution of ZCG is set to end in 2028, and the alternative extends the reduced funding for another four years. ZCG called the plan preliminary: a full proposal will be presented to the community.

Criticism

Mert Mumtaz, co-founder of Helius, called the proposal "far from sufficient": in his view, the treasury is already too large, and funding decisions should be accountable to ZEC holders. Tyler Winklevoss, co-founder of Gemini, also questioned the committee's accountability after Mumtaz reported that a committee member unfollowed him on X: Winklevoss stated that such behavior makes a person incompetent to oversee $110 million.

The criticism followed an earlier proposal by Zcash co-founder Sean Bowne to stop the automatic 8% share of ZCG from newly issued ZEC and direct it to the NSM, without touching the existing treasury.