• Sean Bowe's draft ZIP, created October 26, 2026, would end ZCG's 8% block-subsidy stream and redirect it to the Network Sustainability Mechanism (NSM).
• The draft estimates ZCG's net holdings at about $125.3M at an assumed $1,300 per ZEC. It gives $97.8M at $1,000 and $52.1M at $500, and says the dashboard figures have not been independently reconciled.
• The $125M figure rests on an illustrative price. Held in ZEC, the treasury's dollar value moves with the market, and the draft's own scenarios show that range.
• The 12% Coinholder-Controlled Fund (CCF) stream, the ZEC supply cap and historical block validity are unchanged. The draft has no activation height and depends on a future network upgrade.

Sean Bowe, a Zcash co-founder, has drafted a protocol change that would stop paying new ZEC to Zcash Community Grants. The draft ZIP, created October 26, 2026, would send the 8% share to the Network Sustainability Mechanism instead. ZCG would keep what it already holds and keep awarding grants from it. The draft puts those holdings near $125 million, but that depends on an assumed ZEC price.

What the draft would actually change

The draft ends ZCG's block-subsidy stream at an activation height and creates a new stream, FS_NSM_H3, that sends 8% of the subsidy to the Network Sustainability Mechanism until the original ZCG end height. That money has no payment address or spending key. It is withheld from issuance and credited to the NSM Value Balance, so miners cannot claim it. The 12% Coinholder-Controlled Fund stream, the ZEC supply cap and historical block validity are unchanged.

The treasury figure rests on a price assumption

The headline $125 million is not a measured balance. The draft cites a committee dashboard showing about 91,453 ZEC and roughly $8.8 million, with about $2.4 million in grant liabilities, and values the ZEC at an assumed $1,300. It gives $97.8 million at $1,000 and $52.1 million at $500, and says the dashboard figures have not been independently reconciled. Treat the number as an illustration of scale, not an audited balance.

Inflows far exceed reported spending

The core of Bowe's argument is a mismatch between what comes in and what goes out. The 8% allocation is about 144 ZEC a day, or 52,560 ZEC a year, which the draft values at about $68.3 million a year at $1,300. The Financial Privacy Foundation reported about $1.53 million of ZCG expenses for Q1 2026, or about $6.12 million annualized. Inflows are therefore more than eleven times that run rate.

Runway under the draft's own scenarios

The draft argues the existing holdings would last years even if spending rose well above the reported level. At $10 million a year of spending, it estimates about 12.5 years of coverage at $1,300 per ZEC and about 5.2 years at $500. These are the draft's own calculations on unreconciled balances. They show the treasury does not depend on new issuance to keep funding grants for the foreseeable future.

The governance argument and the open questions

The draft frames the issue as governance rather than solvency: continuing to add to a discretionary treasury increases dependence on its custody and decision-making, and the 12% coinholder-controlled channel better fits holder-directed funding. CoinDesk reports that ZCG's five-member committee is elected by a community advisory panel and decides grants without a separate coinholder vote. Bowe is quoted saying the program was never designed to handle this amount of funding.

Several things are unresolved. The activation height is unassigned, and the draft depends on the NU7 upgrade and ZIP 218's 25-second block spacing. It would need community and node-operator support to take effect. CoinDesk also notes a recent grant dispute over ZECsy, a $550,000 outreach request whose first nine milestones, about $461,500, were approved in a split vote; the draft does not mention it. Any link between that grant and the proposal is not established by the sources.

What to watch next

Watch three things. First, whether the dashboard balances are independently reconciled, since every runway figure depends on them. Second, whether the ZIP is assigned an activation height and tied to a network upgrade. Third, whether ZCG's committee or the Financial Privacy Foundation responds. For anyone assessing Zcash as financial infrastructure, the point is that who controls a multi-million-dollar treasury is decided by protocol governance, not by a company's board.