Zcash co-founder Sean Bowe proposes cutting grants subsidy to fund network sustainability
Zcash co-founder Sean Bowe has proposed redirecting Zcash Community Grants' 8% block subsidy to the Network Sustainability Mechanism, citing the grants committee's existing treasury valuation of up to $125 million.
Zcash co-founder and protocol developer Sean Bowe has submitted a draft Zcash Improvement Proposal (ZIP) to terminate the 8% block subsidy allocation dedicated to Zcash Community Grants (ZCG). The proposal directs the remaining share of the funding stream toward the Network Sustainability Mechanism (NSM), a protocol reserve that withholds tokens from immediate circulation to fund future mining rewards.[1][2][4]
Under the draft, existing funds held by ZCG would remain untouched, and the separate 12% Coinholder-Controlled Fund allocation, miner block shares, and the total ZEC supply cap would stay unchanged. Bowe argued that ZCG's current reserves are already adequate for continued grant-making, stating that the organization was never designed to manage such vast sums. Drawing from ZCG's public dashboard, he cited holdings of 91,452.98 ZEC and roughly $8.8 million in cash, offset by about $2.4 million in liabilities—yielding a valuation of roughly $125.3 million assuming a $1,300 ZEC price, or $52.1 million at $500 per token. Currently, the 8% stream issues 144 ZEC daily, representing roughly $68.3 million annually at a $1,300 price, whereas ZCG spent only $1.53 million in the first quarter of 2026.[1][2][3]
The proposal has sparked debate across the Zcash community. Josh Swihart, founder of Zcash developer ZODL, contended that shutting down only part of the development funding is a half measure that risks prolonged political infighting, calling instead for redirecting both the ZCG and coinholder streams to the NSM until the halving. Meanwhile, cryptographer Ian Miers cautioned that sending the funds to the NSM could turn into a dev-fund-in-waiting that effectively pays miners with extra steps. Bowe responded that the NSM already exists and represents the path of least resistance because the protocol issuance must occur regardless.[1]
Key facts
- Zcash co-founder Sean Bowe submitted a draft ZIP to end Zcash Community Grants' (ZCG) 8% block subsidy allocation for the rest of its term.
- The draft proposal redirects the 8% subsidy value to the Network Sustainability Mechanism (NSM), withholding the coins from circulation.
- ZCG's existing treasury, the 12% Coinholder-Controlled Fund, miner reward shares, and the ZEC supply cap remain untouched under the proposal.
- According to ZCG's dashboard cited by Bowe, the entity holds 91,452.98 ZEC and about $8.8 million, against approximately $2.4 million in liabilities, valued between $52.1 million and $125.3 million across assumed ZEC prices of $500 to $1,300.
- ZCG spent $1.53 million in Q1 2026, while its 8% subsidy provides 144 ZEC daily, or about $68.3 million annually at a $1,300 ZEC price.
- ZODL founder Josh Swihart proposed retiring both ZCG and coinholder streams to the NSM until the halving, while cryptographer Ian Miers warned that the NSM could turn into a delayed developer fund.
Sources · 4 sources
- UN
UnchainedArticle ·
Zcash Developers Split Over Where Grants Program’s 8% Block Share Should Go Zcash co-founder Sean Bowe says Zcash Community Grants (ZCG) no longer needs an automatic slice of every block, and he has written the rule change to cut it off. Bowe published a draft Zcash Improvement Proposal (ZIP) late Monday that would end ZCG’s 8% share of the block subsidy and redirect it to the Network Sustainability Mechanism (NSM) , the protocol-level fund defined in ZIP 237, until the stream was already due to lapse. Nothing already in ZCG’s custody would be clawed back, so the committee could go on funding projects from its reserves. The 12% stream that coinholders vote on is untouched. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . Swihart and Miers Push Back Josh Swihart , founder of Zcash developer ZODL, responded on X that “it’d be a mistake to kill only one part of the dev fund.” He called for retiring the ZCG and coinholder streams together and pointing both at the NSM until the halving, saying “a half measure leaves the door open to ongoing debate and politics.” Swihart disclosed that ZODL recently got a retroactive coinholder grant, and that shutting the whole fund would cut off that potential source of money for his company. Cryptographer Ian Miers took issue with where the money would go. In a forum post , he said capping what any one organization draws from the dev fund was “a very good idea,” but warned the NSM route could become “a dev-fund-in-waiting, where the reserve gets redirected later,” and that it “just pays miners with more steps.” Bowe replied that the NSM “already exists and is the location of least resistance,” adding that “the issuance has to happen anyway, so it needs to go somewhere.” A Price-Dependent Treasury Bowe wrote on X that ZCG “was never designed to handle this amount of funding.” His proposal takes the inputs from ZCG’s public dashboard, 91,452.98 ZEC plus about $8.8 million in dollars, minus roughly $2.4 million in outstanding grant liabilities, and values them at assumed prices: $125.3 million at a ZEC price of $1,300, $97.8 million at $1,000 and $52.1 million at $500. Bowe noted that the dashboard numbers have not been independently reconciled, and the worksheet is marked “Updates required.” That works out to 144 ZEC daily at today’s subsidy, or roughly $68.3 million annually under Bowe’s $1,300 price assumption. ZCG’s own spending runs far below that: $1.53 million in Q1 2026, per a Financial Privacy Foundation report the draft cites. Related Listen: Bits + Bips: How Claude Found Zcash’s Counterfeiting Bug The post Zcash Developers Split Over Where Grants Program’s 8% Block Share Should Go appeared first on Unchained .
Open source - WB
Wu Blockchain@WuBlockchainPost on X ·
Zcash Co-Founder Proposes Redirecting 8% of Block Subsidies to Network Sustainability Mechanism Zcash co-founder and protocol developer Sean Bowe has submitted a draft Zcash Improvement Proposal (ZIP) to end the 8% block subsidy allocation to Zcash Community Grants (ZCG) and redirect it to the Network Sustainability Mechanism (NSM), withholding the funds from immediate circulation. The proposal argues that ZCG's existing reserves are sufficient to sustain its grant-making activities. It would leave ZCG's existing treasury, the separate 12% Coinholder-Controlled Fund allocation, miners' subsidy share, and ZEC's maximum supply unchanged.
Open source - CB
Crypto Banter@crypto_banterPost on X ·
🚨ZCASH CO-FOUNDER PROPOSES CUTTING OFF COMMUNITY GRANTS FUNDING! zcash:native co-founder @ebfull published a draft ZIP to end the automatic 8% block subsidy going to Zcash Community Grants and redirect it to the Network Sustainability Mechanism, where the coins stay out of circulation. He says ZCG already holds roughly $125 million after commitments and was never designed to manage that scale. The proposal comes one day after backlash over a ZECsy grant used for an adult-industry convention demo.
Open source - CO
CoindeskArticle ·
Zcash co-founder proposes ending grants funding, citing $125 million treasury Sean Bowe’s proposal would send the committee’s 8% share of newly created ZEC to a reserve for future miners. The committee would keep the money it has already received.
Open source