Zcash co-founder proposes ending grants funding, citing $125 million treasury

Zcash co-founder Sean Bowe has proposed ending automatic funding for the privacy network’s community grants program, saying its treasury is now big enough to cover years of spending without any new money coming in.

His draft proposal, published late Monday, would halt auto allocation and redirect its remaining 8% share of the newly created ZEC into a reserve for future mining rewards.

The committee would keep its existing assets and continue awarding grants from them. Bowe’s calculation puts those assets, after outstanding grant commitments, at about $125 million, using an illustrative ZEC price of $1,300.

ZCG’s five-member committee, elected by a community advisory panel, selects grants without a separate coinholder vote.

A second funding program receives 12% of newly created ZEC. Holders vote quarterly on its grants, subject to participation and approval requirements.

Bowe wants to preserve that larger allocation. His proposal argues that continuing to pile funds into ZCG’s separate custody and governance arrangements adds risk when the program already has substantial reserves.

The redirected allocation would enter the Network Sustainability Mechanism, which is designed to support future mining rewards, and would remain there for the rest of the grants stream’s existing term.

The committee’s dashboard showed about 91,453 ZEC and $8.8 million, with $2.4 million committed to grantees. Bowe values the remaining balance at $125.3 million using a ZEC price of $1,300.

The automatic allocation continues regardless of how much the committee already holds. At the network’s target pace, it receives about 144 ZEC a day, worth about $68 million a year.

For comparison, the Financial Privacy Foundation, which administers ZCG’s funds, reported just over $1.5 million in program expenses for the first quarter. Annualized, that’s about $6 million, less than a tenth of the yearly inflow.

The dollar figures move with ZEC. Even at $500 per coin, Bowe estimates the existing treasury would cover about five years of spending at an assumed $10 million a year.

Outreach spending draws scrutiny

The proposal arrived amid criticism of a ZCG-funded outreach program that demonstrated private payments at an adult-industry convention over the weekend.

ZECsy, the team behind the program, requested $550,000 for work spanning adult-industry events, crypto conferences and workshops. The pitch included helping workers facing banking restrictions accept payments without exposing personal financial information.

The committee approved startup funding and the first nine milestones, totaling about $461,500. Photos from its Exxxotica booth in Edison, New Jersey, circulated on X on Sunday.

As such, the August approval was split. Committee member Hanh opposed the grant, questioning its cost and evidence of lasting adoption. Other members backed the team’s ability to reach new users, while the nine-month limit allowed an assessment before further funding.

Bowe’s draft does not cite the ZECsy grant, and rests on the program’s reserves and continuing inflows.

The proposal has no activation date and would require a change to Zcash’s network rules. But until one takes effect, ZCG’s allocation continues at about 144 ZEC a day.