Zcash Co-Founder Proposes Ending Automatic Grants Stream
Sean Bowe's draft would redirect Zcash's 8% grants share to the NSM while ZCG keeps its treasury. It needs a future network upgrade.
Sean Bowe's draft proposal would end the automatic 8% block-subsidy payment to Zcash Community Grants and redirect it to the Network Sustainability Mechanism, withheld from issuance. Zcash Community Grants would keep its existing treasury, so this is a funding-model change rather than a shutdown, and it needs a future network upgrade.
The Ledger Desk · 3 min read- Sean Bowe, a Zcash co-founder, submitted a draft on October 26, 2026 that would end the automatic block-subsidy stream to Zcash Community Grants, per The Block.
- The draft redirects ZCG's remaining 8% share to the Network Sustainability Mechanism and leaves the 12% Coinholder-Controlled Fund stream unchanged.
- The draft lists ZCG holdings of 91,452.98 ZEC and USD 8,796,224, against USD 2,417,165 in outstanding grant liabilities, and says these inputs are not independently reconciled.
- The $125 million figure is the draft's own arithmetic at an assumed ZEC price of $1,300; at $500 the same formula gives $52.1 million.
- No activation height is set and the draft is not in the currently specified NU7 upgrade, so a future deployment ZIP would be needed.
Zcash co-founder Sean Bowe has proposed ending the automatic block-subsidy stream that feeds Zcash Community Grants, according to The Block, which reports that he submitted the draft on October 26, 2026. The draft would send ZCG's remaining 8% share to the Network Sustainability Mechanism instead. It has no activation height and would need a future network upgrade. The question for the segment is whether a protocol should keep funding its ecosystem through issuance when the recipient already holds a large reserve.
What the draft changes
The draft ends the block-subsidy payment to Zcash Community Grants at a future activation height and redirects the 8% share to the Network Sustainability Mechanism through a new stream running to the existing ZCG end height. The redirected amount is credited to the mechanism's value balance rather than to issued supply, so it is withheld from issuance. The 12% Coinholder-Controlled Fund stream is unchanged, and ZCG keeps its existing treasury and rules, according to the draft text on GitHub.
Where the $125 million and $68 million figures come from
Both headline figures are the draft author's arithmetic, not audited numbers. The draft computes the treasury as 91,452.98 ZEC times an assumed price, plus USD 8,796,224, minus USD 2,417,165 in grant liabilities. That gives about $125 million at $1,300 per ZEC, $97.8 million at $1,000 and $52.1 million at $500. The draft says the dashboard inputs are not independently reconciled. The $68 million annual yield assumes 52,560 ZEC per year at $1,300.
Why the funding model matters
The draft's core argument is that a fixed share of issuance rises in dollar value as ZEC appreciates, regardless of what recipients hold or spend. It cites Financial Privacy Foundation figures of $1,530,844 in ZCG expenses for the first quarter of 2026, which it annualizes to about $6.12 million, and says the 8% allocation is more than eleven times that. The draft also rejected reducing the stream rather than ending it, and rejected price-triggered caps or automatic restarts.
What to watch next
The next signals are whether the draft receives a ZIP number and a deployment ZIP that assigns an activation height, since The Block reports it is not in the currently specified NU7 upgrade, and how the ZCG committee and wider community respond. Readers tracking Zcash as financial infrastructure should separate what is verifiable from the draft text and on-chain balances from claims about treasury value, which depend on the ZEC price. The Block put ZEC at around $1,248 on October 27, 2026.
- What does the Zcash proposal change?
- It ends the automatic block-subsidy payment to Zcash Community Grants at a future activation height. The remaining 8% share is redirected to the Network Sustainability Mechanism and withheld from issuance. The 12% Coinholder-Controlled Fund stream is unchanged.
- Would Zcash Community Grants stop funding projects?
- Not under the draft. ZCG keeps its existing treasury and the rules governing it, and can still meet existing commitments and approve grants. The draft lists USD 2,417,165 in outstanding grant liabilities among its inputs.
- Where does the $125 million figure come from?
- The draft computes it as ZCG holdings in USD minus grant liabilities at an assumed ZEC price of $1,300. It excludes future receipts and conversion costs, and the draft says its inputs are not independently reconciled.
- When would the change take effect?
- No date is set. The activation height is unassigned, the draft is not part of the currently specified NU7 upgrade, and a future deployment ZIP would set the height.
- Zcash co-founder proposes ending grants subsidy, citing $125 million treasury — The Block
- Ending the ZCG Funding Stream in Favor of the NSM (draft ZIP) — Zcash Improvement Proposals (GitHub)