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Zcash co-founder Sean Bowe wants to turn off the grants program's 8% cut of new ZEC, saying it already holds about $125 million
Summary
Zcash co-founder Sean Bowe has proposed ending the automatic allocation of 8% of newly created ZEC to Zcash Community Grants (ZCG), CoinDesk, Cointelegraph and The Block reported.
Under his draft, that share would instead go to the Network Sustainability Mechanism, a reserve meant to support future mining rewards, for the rest of the current funding period, which Cointelegraph said ends in 2028.
ZCG would keep the funds it already holds and keep awarding grants from them; Bowe puts those assets at about $125 million after existing commitments, a figure CoinDesk said assumes an illustrative ZEC price of $1,300.
CoinDesk said the proposal has no activation date and would require a change to Zcash's network rules, and that it comes amid criticism of a ZCG-funded outreach grant, though Bowe's draft does not cite that grant.
Updates
- Update, : Update (Oct. 30): Zcash Community Grants offered its own compromise, redirecting about $124 million in existing and future funding toward mining rewards; critics say it doesn't address governance concerns (Cointelegraph).
- Update, : Update (Nov. 4): Zcash Community Grants withdrew its Oct. 29 compromise to redirect about 98,000 ZEC toward future mining rewards, saying funding changes should go through Zcash's usual governance process, CoinDesk reported. Competing plans remain, including Bowe's and a separate draft by Bowe and Zooko Wilcox that would send 50,000 ZEC to the reserve and redirect ZCG's future funding to a new development and legal-defense fund; none has been adopted, so ZCG keeps receiving about 144 ZEC a day for now.
Key facts
- "ZCG has over $125M in funding, and will receive millions more before the spigot is turned off. The program was never designed to handle this amount of funding," Bowe said on X.
- ZCG's dashboard showed about 91,453 ZEC and $8.8 million in cash, with $2.4 million committed to grantees, according to CoinDesk and Cointelegraph.
- At the network's target pace, ZCG receives about 144 ZEC a day, worth about $68 million a year, while the Financial Privacy Foundation, which administers its funds, reported just over $1.5 million in program expenses for the first quarter, CoinDesk said.
- Bowe estimates that even at $500 per ZEC the existing treasury would cover about five years of spending at an assumed $10 million a year, per CoinDesk.
- A separate funding program receives 12% of newly created ZEC, with holders voting quarterly on its grants; Bowe wants to keep that allocation, CoinDesk reported.
- Cointelegraph noted that in September Dragonfly managing partner Haseeb Qureshi proposed ending the Zcash developer fund when its current period expires, saying it risked being "politicized."
- The Block also reported the proposal, citing the treasury valuation of more than $125 million.
- Zcash Community Grants has proposed redirecting about $124 million in existing and future funding toward mining rewards, but critics say the plan fails to address governance and accountability concerns, Cointelegraph reported.