Joint ZIP to halt ZCG funding stream

Zcash founder Zooko Wilcox and long‑time Zcash cryptographer Sean Bowe, who leads the Tachyon Group, announced a joint Zcash Improvement Proposal (ZIP) aimed at withdrawing roughly 50,000 ZEC—about $61 million at current prices—from the Zcash Community Grants (ZCG) treasury. The draft, prepared by Bowe’s group and Wilcox’s Shielded Labs, would end the program’s automatic 8% share of block rewards after the upcoming NU7 network upgrade and redirect that stream into a new Future Development and Legal Defense Fund, while the transferred ZEC would be sent to an unspendable address that feeds the Network Sustainability Mechanism (NSM).

Community reaction and criticism

According to Unchained, the ZIP would give the ZCG committee a 30‑day window to move 50,000 ZEC to the NSM, a reserve that releases coins to miners over time. At the time of reporting, ZEC was priced around $1,224, making the donation worth roughly $61 million, or just over half of the 91,450 ZEC currently held by the grants program. The proposal also leaves the 12% coin‑holder‑controlled fund untouched, while the remaining ZEC in the treasury would continue to fund grants under the existing balance. Cointelegraph noted that ZCG’s own preliminary plan earlier in the week called for moving 36,200 ZEC to the NSM and tapering the remaining 55,200 ZEC over time, a figure that would redirect about $124 million in total toward future block rewards.

Potential outcomes

Industry voices quickly challenged the proposal’s adequacy. Helius CEO Mert Mumtaz called the plan “nowhere near good enough,” arguing that the treasury was already too large and that any spending decisions should be directly accountable to ZEC holders. Gemini co‑founder Tyler Winklevoss echoed the criticism, labeling a ZCG committee member’s unfollowing of Mumtaz on X as “embarrassing, childlike behavior” and questioning the member’s qualification to manage roughly $110 million without clear oversight. On Zcash’s forum, users expressed concern over the speed of the changes, with some urging a three‑month deliberation period and others demanding that any pause to the grants stream be matched by a pause to the coin‑holder‑controlled fund.

What to watch next

The joint ZIP must be approved by the Zcash community before the NU7 upgrade, after which the 8% block‑reward allocation would be frozen. Observers will be watching for a formal community vote, any further revisions to the proposal, and whether the ZCG committee adopts the joint plan over its own preliminary draft. Additional scrutiny from prominent investors and developers could shape future governance reforms, potentially leading to more transparent mechanisms for managing the sizable grants treasury.