Zcash co-founder Sean Bowe argued that the community grants program’s roughly $125 million in resources would last for years and proposed ending automatic ZEC transfers to the program.
According to a draft reported by CoinDesk, Zcash Community Grants (ZCG) would preserve its existing assets and continue funding grants from those resources. The 8% share of newly issued ZEC currently allocated to the program would instead go to the Network Sustainability Mechanism reserve, which was established to support future miner rewards.
Annual Inflows Exceed Spending by More Than 10 Times
ZCG’s dashboard shows approximately 91,453 ZEC and $8.8 million. After subtracting $2.4 million committed to grant recipients, Bowe estimates that the remaining resources are worth $125.3 million, assuming a price of $1,300 per ZEC.
Regardless of how much it holds in its treasury, the program continues to receive approximately 144 ZEC per day at the network’s targeted issuance rate. At the same assumed price, that flow is worth approximately $68 million annually.
The program expenses reported by the Financial Privacy Foundation, which manages the funds, for the first quarter were slightly over $1.5 million. Annualized, that spending comes to approximately $6 million, less than one-tenth of the estimated annual inflow.
According to Bowe, even if the price of ZEC fell to $500, the existing treasury could last about five years, assuming annual spending of $10 million. The size of the resources in dollar terms and the flow of funds both change with the price of ZEC.
The Other Grant Program’s Share Would Be Preserved
At ZCG, grants are determined by a five-member committee selected by the community advisory panel; token holders do not vote on each grant. In the other program, which receives a 12% share of newly issued ZEC, token holders vote quarterly, subject to certain participation and approval requirements.
Bowe wants to preserve the other program’s share. The draft argues that accumulating more funds in a separate custody and governance structure poses risks when ZCG already has substantial resources. The proposed transfers would go to the miner rewards reserve for the remainder of the current grant funding period.
Proposal Comes Amid Ongoing Spending Debate
The proposal comes as criticism mounts over work by the ZCG-backed ZECsy team promoting private payments at an event in the adult entertainment industry. The team requested $550,000 for events, crypto conferences, and workshops, and approximately $462,000 was approved for initial funding and the first nine phases.
As committee members raised objections over costs and the prospect of lasting adoption, supporters highlighted the team’s potential to reach new users. Bowe’s draft does not refer to this grant; it bases the proposal on the size of existing reserves and continued inflows.
Implementing the draft would require changes to Zcash network rules, and no effective date has been set yet. Automatic ZEC transfers to ZCG will continue until the change takes effect.
Not investment advice.