Zcash (@Zcash) $ZEC co-founder Sean Bowe (@ebfull) has proposed redirecting 8% of block subsidies from community grants to network sustainability. The draft would withhold the funds from imme
Zcash (@Zcash) $ZEC co-founder Sean Bowe (@ebfull) has proposed redirecting 8% of block subsidies from community grants to network sustainability. The draft would withhold the funds from immediate circulation.
In a draft ZIP published on GitHub on Oct. 26, 2026, Bowe proposes ending Zcash Community Grants' (ZCG) 8% share of new coin issuance and routing it into the Network Sustainability Mechanism (NSM), a reserve built to support the network once block subsidies taper off.The mechanism is designed to hold ZEC out of circulation and gradually reissue it through future block rewards.
Bowe argues that existing ZCG reserves can sustain current grant-making. Instead of issuing the 8% allocation to grant recipients, the protocol would credit that value to the NSM Value Balance, which produces no immediate issuance and no spendable output.
ZCG would not close overnight. It would stop approving new grants and keep paying out existing milestones from its treasury, with any remaining balance eventually transferred to the NSM.The allocation would flow to the NSM until the current funding period ends in 2028.
On ZCG's holdings, its dashboard listed 91,453 ZEC and $8.8 million in cash, with $2.4 million in outstanding grant commitments, according to Cointelegraph.
The proposal leaves the miners' share, the separate 12% Coinholder-Controlled Fund allocation and ZEC's maximum supply unchanged. For context, since NU6.1 activated, the model allocates 8% to Zcash Community Grants and 12% to a coinholder-controlled fund, leaving 80% for miners.Zcash consensus caps the eventual monetary base at 21 million ZEC.
The draft has drawn debate. Supporters of ending ZCG point to accountability, arguing that coinholders are diluted to fund grants approved by a panel whose membership the Zcash Foundation controls.For developers who rely on ZCG, the immediate question is pipeline: existing milestones would be honored, but the door to new grants would close.
The proposal remains a draft. As of publication, it had not been formally adopted. Any change would need to go through the Zcash improvement process and a network upgrade before taking effect.
Cointelegraph: Zcash Co-Founder Proposes Ending ZCG's Funding Stream
Crypto Briefing: Sean Bowe proposes redirecting 8% of block subsidies
Zcash Improvement Proposals: ZIP 1016, Community and Coinholder Funding Model
