Zcash co-founder Sean Bowe has written a draft proposal that would stop paying Zcash Community Grants (ZCG) its 8% share of every new block, the part of the Zcash dev fund that pays for grants picked by a small committee. The text, committed to GitHub at 17:44 UTC on 26 October 2026 and opened as pull request #1414 in the zcash/zips repository at 02:39 UTC on 27 October, would send that slice to the Network Sustainability Mechanism (NSM) instead. Bowe argues the program already holds enough money: about $125 million net of grant commitments, by his own calculation at an illustrative price of $1,300 per ZEC.
That price is a scenario, not the market. ZEC traded near $1,215 at 06:19 UTC on 27 October. And the proposal is a draft in the plainest sense: it has no ZIP number yet, no activation height, no reference implementation and no vote attached to it. The pull request was still open and unmerged when we checked the GitHub API on Tuesday morning.
Bowe put it bluntly in a post on X quoted by CoinDesk: “It’s time to turn off the ZCG funding stream.” According to the same report, he wrote that ZCG “will receive millions more before the spigot is turned off” and that the program “was never designed to handle this amount of funding.”
What the draft changes for Zcash Community Grants: the 8% goes to the NSM
Since the NU6 upgrade of November 2024, each Zcash block subsidy is split three ways: 80% to miners, 8% to Zcash Community Grants and 12% to a pot that became the Coinholder-Controlled Fund under ZIP 1016. The ZCG share is received and administered by the Financial Privacy Foundation. Electric Coin Company and the Zcash Foundation no longer get a direct cut of block rewards.
Bowe’s draft touches only the 8%. From a future activation height, called A in the text, the ZCG funding stream ends. A new stream sends the same 8% to a symbolic recipient, NSM_FUND, until the date the ZCG stream was already due to stop. That recipient has no address and no spending key. The value is withheld from the coinbase reward that miners can claim and is booked to the NSM’s balance, not to the circulating supply.
Miners gain nothing from the change. Their 80% is computed exactly as before, and the draft says the 8% and 12% shares are still rounded down separately. The 12% Coinholder-Controlled Fund keeps its size and its end date. So do the 21 million ZEC cap and every block mined so far.
ZCG also keeps what it has. The draft does not claw back a single coin from the existing treasury, and the committee can keep paying approved milestones and approving new grants from it. The only thing that stops is the automatic inflow, about 144 ZEC a day.
Why the NSM and not simply the miners or a burn? The NSM, defined in ZIP 237, is the mechanism that collects ZEC taken out of circulation, such as burned fees, and pays it back out later as extra block subsidy. Routing the former grants money there, the draft says, keeps the existing expiry, avoids creating a new funding period and preserves the rule that issued supply plus the NSM balance grows by exactly the scheduled subsidy in each block. Our article on the NU7 upgrade and its fee reserve covers how the NSM starts life in November.
The $125 million ZCG treasury is Bowe’s estimate, with three prices
The headline figure rests on the ZCG dashboard, a public spreadsheet linked from the grants website. In the version Bowe recorded on 26 October, it lists 91,452.98 ZEC, $8,796,224 in dollars and $2,417,165 of outstanding grant liabilities. The draft itself warns that these are reported inputs that “have not been independently reconciled”, and that the worksheet is marked as needing updates. Its block reference dates from 21 October.
Bowe values the ZEC at three prices rather than one. At $1,300, holdings minus liabilities come to $125.3 million. At $1,000, $97.8 million. At $500, $52.1 million. He then sets those balances against an illustrative spending level of $10 million a year, which is well above what the program actually spent at the start of 2026: the Financial Privacy Foundation reported $1,530,844 of ZCG expenses for the first quarter, about $6.12 million a year.
On the inflow side, 8% of a 1.5625 ZEC subsidy at one block every 75 seconds gives 144 ZEC a day, or 52,560 ZEC a year. At $1,300 that is about $68.3 million a year, which the draft calls “more than eleven times” the annualised first-quarter spending. NU7’s switch to 25-second blocks leaves the daily amount almost unchanged, because the subsidy per block is cut by the same factor.
The draft gives the three net balances, the 12.5 and 5.2 years of cover and the inflow values at $1,300. The rest of the table is our arithmetic on the same dashboard inputs, including a fourth line at the market price: 91,452.98 ZEC times $1,215, plus the dollar holdings, minus the liabilities.
| ZEC price (assumed) | Holdings less grant liabilities | Years at $10M a year | Value of 144 ZEC a day | Value per year (52,560 ZEC) |
|---|---|---|---|---|
| $1,300 (draft) | $125.3 million | about 12.5 | $187,200 | $68.3 million |
| $1,215 (market price, 06:19 UTC, 27 Oct) | about $117.5 million | about 11.7 | about $175,000 | about $63.9 million |
| $1,000 (draft) | $97.8 million | about 9.8 | $144,000 | about $52.6 million |
| $500 (draft) | $52.1 million | about 5.2 | $72,000 | about $26.3 million |
Two caveats sit under every number in that table. The balances assume the ZEC could be turned into dollars at the stated price with no conversion cost. They also assume constant spending, no further receipts and no obligations beyond the grant liabilities on the dashboard, as the draft’s own notes say. The $10 million spending line is a round number chosen by Bowe, not a budget.
Why ending the stream, and not trimming it
The draft spends some time on the alternatives. Reducing the 8%, it says, would keep sending new subsidy to a program it already considers funded. A cap tied to the ZEC price, or an automatic restart, would bring in a different funding policy with its own dependencies. Bowe prefers what the text calls “a single prospective allocation change”.
The governance argument is quieter but runs through the whole document. ZIP 1016 created two channels: ZCG, whose committee chooses grants itself, and the Coinholder-Controlled Fund, where holders of ZEC vote. The draft says it “favors coinholder decisions” on any extra grant money paid out of the block subsidy, over automatic accumulation by a separate committee. It also notes that a bigger discretionary treasury means more value depending on one set of custody and governance arrangements.
According to CoinDesk, ZCG is run by a five-member committee elected by a community advisory panel, and it picks grants without a coinholder vote. The 12% fund, by contrast, is spent through coinholder votes held every three months under ZIP 1016, where a grant needs at least 420,000 ZEC voted and a simple majority.
ZECsy grant: the context CoinDesk points to
CoinDesk links the proposal to a recent grant dispute, and that link is the outlet’s framing, not Bowe’s stated reason. The draft does not mention it, as CoinDesk itself notes. The case concerns ZECsy, a team that asked ZCG for $550,000 to promote Zcash at adult-industry events and that had shown private payments at an Exxxotica booth in Edison, New Jersey.
In August, according to CoinDesk, the committee approved start-up funding and nine milestones worth about $461,500 in a split vote, with committee member Hanh voting against. The application, filed in its revised form on 26 August, is public as issue #402 in the ZCG GitHub repository, where it is tagged as approved with its startup payment completed.
A forum thread opened the same night, with a different plan
Bowe was not the only one writing about ZCG on Monday. At 23:02 UTC on 26 October, Maxime Desalle, who posts as maxdesalle, opened a governance thread titled “End ZCG and send its funds to the NSM”. His proposal goes further than Bowe’s. It would end ZCG at the NU8 upgrade, send the 8% to the NSM, let ZCG pay milestones it has already approved, stop new grants and move the remaining treasury to the NSM as well. He writes that he works with Cypherpunk, which he describes as a large Zcash miner, and that he previously cancelled a ZCG grant of his own.
The order of events is easy to misread. Bowe’s commit on the end-zcg-stream branch is timestamped 17:44 UTC on 26 October, more than five hours before the thread appeared. The pull request that made the draft visible came at 02:39 UTC on 27 October, after it. We found nothing showing that one prompted the other.
Bowe joined the thread at 03:34 UTC on 27 October. He wrote that his draft only shuts off the stream, that stripping ZCG’s existing treasury is a separate question he would also personally support, and that the two should be considered as separate proposals. At 05:23 UTC he added that not paying miners was not really his goal: the NSM already exists, and since the issuance happens anyway, it has to go somewhere.
What the 18 replies say
By 06:04 UTC on 27 October the thread had 18 replies, one of them since deleted by its author. That is a self-selected sample of forum regulars, not a poll.
Several posters backed ending ZCG. thowar2 argued that the committee is not accountable to coinholders. Umbredak wrote that ZCG’s priorities do not always match those of coinholders, and later asked to keep the 12% coinholder fund, whose last round he put at $8.39 million. thailand85 compared the setup to taxation without representation and suggested splitting the ZCG question from retroactive grants. seernet supported the idea but warned of backlash from early contributors and asked for a negotiated path that avoids a fork.
Others want more. joshs, whose forum profile reads Josh Swihart of ZODL, said he had drafted a ZIP to end the whole dev fund, both ZCG and the coinholder stream (about 216 ZEC a day by his count), keeping only a one-time endowment for a legal defence fund for Zcash developers. Half-measures, he argued, leave the door open to more debate. He disclosed that ZODL recently received a retroactive coinholder grant. Monsignoree also wants the fund ended entirely and said the opening post misstates who can join ZCAP, the community advisory panel.
The most detailed objections were about the NSM, not about ZCG. str4d, whose forum profile carries a ZODL tag, wrote 27 minutes after the opening post that ending ZCG without another development stream is a decision to give miners more, and that with NSM payouts starting in 2031, after every current stream has ended, the NSM route still does that for now. Ian Miers, posting as secparam, backed capping what any one organisation can receive and even floated scrapping the dev fund, but warned that an NSM reserve could turn into a dev fund in waiting and that it mostly pays miners with extra steps.
A second, unrelated draft also appeared overnight. Posted by dismad at 01:25 UTC on 27 October and still without replies at the time of our check, the “Dev Fund Soft Landing” would not end the streams in 2028 at all. It would step them down: 4% for ZCG and 6% for coinholders from about November 2028, then 2% and 3% from about November 2032, and nothing after the fifth halving around November 2036.
We found no public statement from ZCG, the Financial Privacy Foundation, the Zcash Foundation, Electric Coin Company or Shielded Labs by 06:40 UTC on 27 October.
How the Zcash dev fund got here
Zcash has paid part of its block reward to development since launch in 2016, starting with a founders’ reward that ran until the first halving. The next phase was set out in ZIP 1014, shaped in part by community sentiment polling: from the first halving in 2020 to the second in 2024, 20% of each block subsidy went to a dev fund split 35% to the Bootstrap Project (the parent of Electric Coin Company), 25% to the Zcash Foundation and 40% to a Major Grants program run by the Foundation.
NU6 in November 2024 replaced that model with the 8% and 12% streams. NU6.1, activated at block 3,146,400 on 24 November 2025, turned the 12% lockbox into the Coinholder-Controlled Fund. Both streams were already due to stop at the third halving, estimated at around November 2028. The NU7 pull request merged on 21 October moved the stream end height to block 6,132,390 to fit the new 25-second spacing, which by our arithmetic from the 6 November NU7 estimate still lands in late 2028.
That expiry matters for reading Bowe’s draft. It does not extend or shorten anything; it changes who receives the 8% between its activation and late 2028. The later it activates, the less money it redirects.
Who decides on ZCG funding, and when
No vote is scheduled. The draft does not say whether the change would go to coinholders, and neither does CoinDesk. ZCG itself is not subject to a coinholder vote today; only the 12% fund is.
The usual path for a consensus change is long. A ZIP is discussed, given a number by the ZIP editors, moved from Draft to Proposed, written into node software such as Zebra and Zakura, and then switched on in a network upgrade. Bowe’s text says plainly that it is not part of NU7, which is set for block 3,543,405. By our estimate from the chain tip of 3,532,124 at 06:24 UTC on Tuesday, NU7 should arrive around 6 November. The draft is aimed at a later upgrade that activates before the ZCG stream expires; the forum calls that upgrade NU8, the draft does not name it.
For holders of ZEC, the change would not touch balances, addresses or transaction privacy; the draft introduces no new address formats or fields. What would change is where roughly 144 ZEC of daily new issuance goes, and who decides how it is eventually spent. Under Bowe’s draft, that value sits in the NSM and comes back as block subsidy over time. Under the current rules, it lands in a treasury that a committee spends. Readers new to how halvings set these amounts can start with our explainer on the halving, which works the same way in principle on Zcash.
No price reaction to the draft can be measured yet. In our market data snapshot of 06:19 UTC, ZEC was up about 1% over 24 hours, a move that says little. The coin had climbed 11% on 21 October on the NU7 news, as our market report that morning recorded. Our Zcash (ZEC) page has the live price and the coin’s background.
Open questions and the next dates
- Whether the ZIP editors give the draft a number, and whether pull request #1414 is merged as a draft.
- Any reply from ZCG, the Financial Privacy Foundation or the Zcash Foundation, none of which had spoken by 06:40 UTC on 27 October.
- Whether a coinholder vote or another sentiment poll is proposed, and in what format.
- How Bowe’s narrow draft sits next to maxdesalle’s treasury transfer, the soft landing and joshs’s plan to end the whole fund.
- NU7 activation at block 3,543,405, expected around 6 November, after which the NSM starts collecting burned fees.
The next concrete step is the ZIP review itself. Until a number, a height and an upgrade are attached, the 8% keeps flowing to ZCG at about 144 ZEC a day.