Zcash Community Grants (ZCG) has withdrawn its proposal to redirect approximately 98,000 ZEC toward future mining rewards following criticism from the Zcash community over its funding structure and spending decisions. The committee announced on Tuesday that it would no longer pursue the proposal, which was introduced on October 29. It said future funding decisions should be handled through Zcash’s established governance process.
Under the proposed plan, ZCG would have transferred 36,200 ZEC from its approximately 91,500 ZEC treasury to the Network Sustainability Mechanism, a reserve designed to support miners’ block rewards. The plan would also have reduced the committee’s expected funding through the 2028 halving from about 109,000 ZEC to 47,000 ZEC.
ZCG currently receives 8% of newly issued ZEC, equivalent to roughly 144 coins daily. Its growing treasury has raised questions among developers and token holders about how grants are allocated and whether the committee should continue receiving automatic funding.
The controversy intensified following criticism of a ZCG-funded outreach project, ZECsy, which promoted private payments at an adult-industry convention in New Jersey.
Meanwhile, alternative funding proposals remain under discussion. Zcash co-founder Sean Bowe has suggested ending the committee’s automatic funding, while another proposal involving Bowe and Zcash founder Zooko Wilcox would redirect funds toward mining rewards and a development and legal-defence fund. Developer Daira-Emma Hopwood has proposed retaining the current allocation while shifting grants toward increasing ZEC adoption.
With the proposal withdrawn and no alternative approved, ZCG will continue receiving its 8% allocation until changes are made through Zcash governance or a network upgrade. The debate over how the network distributes funds remains unresolved.
