Zcash Holders to Vote on Removing 50,000 ZEC From Grants Treasury

A draft Zcash Improvement Proposal would strip 50,000 ZEC from the Zcash Community Grants (ZCG) treasury and end the program's automatic 8% share of block rewards, with coinholder polling set to open Nov. 16. Co-founders Sean Bowe and Zooko Wilcox wrote the draft with Jason McGee, and it was merged into the specifications repository on Nov. 11. The authors cite ZEC's price rise as the reason to shrink ZCG's treasury while keeping its grants program alive.

Merging is not approval. The text, published in the zcash/zips repository, remains a draft with no ZIP number and no activation date. It would need broad community support and a network upgrade, and organizers would assess whether rough consensus exists.

What the draft does

The 50,000 ZEC would be removed from circulation and credited to the Network Sustainability Mechanism (NSM), which returns value to miners gradually through future block rewards. It would not be burned, handed to a new committee, or placed in the legal-defense fund. ZCG's committee would have 30 days after activation to remove the coins through the Financial Privacy Foundation, which holds its funds.

ZCG's 8% stream would instead flow into a locked Future Dev and Legal Defense Fund Lockbox, accumulating until a later halving. Reports differ on whether that means the next halving or the third. The lockbox would start with no custodians, keys or withdrawal mechanism, so a separate ZIP would have to write the withdrawal rules. The 12% Coinholder-Controlled Fund stream stays unchanged.

Size of the cut

The treasury's size depends on which snapshot you read. ZCG's own dashboard showed 93,657.47 ZEC on Nov. 7, so the removal equals roughly 53.4% and leaves 43,657.47 ZEC. The draft itself cites an October snapshot of 91,453 ZEC, which puts the cut at about 55% and leaves roughly 41,453.

At about $979 per ZEC on CoinGecko at 12:56 a.m. ET on Nov. 12, the 50,000 ZEC is worth about $49 million.

The dashboard also listed about $8.76 million in dollar holdings and $2.26 million in future grant liabilities; another count puts those figures at roughly $8.8 million and $2.4 million. ZCG would keep that cash, along with its remaining ZEC, and could still honor existing commitments.

The vote

Polling for coinholders and community panels runs Nov. 16 through Nov. 30, per the forum timeline. Under the draft ballot, participants can support, oppose or abstain on each option independently, including leaving ZCG unchanged.

ZCG has been taking in about 144 ZEC per day from block rewards, an inflow the plan would stop. The co-founders' draft, dated Oct. 29, also lands days after ZCG withdrew its own plan involving roughly 98,000 ZEC on Nov. 3 following community criticism. The critique is straightforward: without the daily inflow, every future grant draws on a pool that no longer refills, and the lockbox's governance stays unresolved until another ZIP passes.

Timing is murky too. One report says the 8% stream ends once NU7 arrives, another describes NU7 as already live, and a third says a further upgrade, NU7.1, would still be needed.

Why it matters

Think of the NSM as a slow-release reservoir: coins sent there are not destroyed but dripped back to miners over time, so the proposal takes ZEC out of circulation now and pays it out to the network's miners later. The fight is over who controls development money for the independent teams building Zcash software, and it arrives during a busy stretch for the asset. Zcash climbed 9.4% to $1,310 ahead of NU7 on Nov. 4, and Grayscale launched Zcash Invest with a $1 million pledge on Nov. 10. The poll will show how coinholders weigh a leaner grants program against a protected legal and development reserve.