Cryptoupdated 1h ago2 min read
Zcash Co-Founder Sean Bowe Proposes Redirecting 8% Block Subsidies From Zcash Community Grants
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Sean Bowe proposes redirecting 8% of block subsidies from ZCG to a network sustainability reserve. The plan would wind down Zcash Community Grants and halt automatic grant funding.
Bowe targets ZCG stream
Zcash co-founder Sean Bowe called to stop the automatic funding stream to Zcash Community Grants (ZCG), saying ZCG has “over $125M in funding” and will receive “millions more before the spigot is turned off.” Bowe proposed a draft GitHub proposal to redirect ZCG’s 8% share of the Zcash (ZEC) block subsidy to the Network Sustainability Mechanism reserve, while leaving ZCG’s existing funds untouched. Bowe’s plan would credit the redirected value to the NSM Value Balance so it produces “no immediate issuance and no spendable output,” and it would keep paying out existing milestones from ZCG’s treasury.
“The research describes this as producing no immediate issuance and no spendable output.”
The proposal would keep the 8% grants slice running until the current funding period ends in 2028, while Zcash block rewards continue splitting 80% to miners and 12% to the Coinholder-Controlled Fund. Crypto reporting tied the proposal to a governance friction around how ZCG allocations are controlled, while the network’s NU7 upgrade is set to activate on approximately November 5, 2026.
Draft status and mixed reaction
Bowe published the idea as a draft ZIP, the Zcash equivalent of a formal improvement proposal, and posted it to the community forum on October 26, 2026. The proposal remained in draft status as of October 27, 2026, and reactions were mixed, with some community members voicing support and others arguing the change needed a broader debate about governance implications. ZCG’s dashboard listed 91,453 ZEC and $8.8 million in cash as of Wednesday, with $2.4 million in outstanding grant commitments.
Haseeb Qureshi, managing partner at crypto venture capital firm Dragonfly, proposed ending the Zcash developer fund when its current funding period expires, saying it risks being “politicized” as it approaches $100 million in value. The proposal would close the door to new grants while honoring existing milestones, which would shift more of the funding conversation toward the Coinholder-Controlled Fund that keeps its 12% share.
NU8 timing, NSM reserve
The proposal calls for terminating ZCG at the network’s future NU8 upgrade, with ZCG stopping new grant approvals after the proposal receives approval while previously approved milestones continue receiving their payments. The redirected ZEC would remain in the reserve until February 2031, when the Network Sustainability Mechanism is expected to begin releasing funds through future mining rewards. The Network Sustainability Mechanism is designed to hold ZEC out of circulation and gradually reissue it through future block rewards, with the allocation flowing to the NSM reserve until the current funding period ends in 2028.
“The mechanism is designed to hold ZEC out of circulation and gradually reissue it through future block rewards.”
The proposal would not affect the separate 12% allocation for Coinholder Grants and the existing mining reward share, and it framed the change as a potential shift in economic priorities rather than an immediate change to token issuance. The Network Sustainability Mechanism is designed to hold ZEC out of circulation and gradually reissue it through future block rewards, while ZCG’s treasury figures included 91,453 ZEC and $8.8 million in cash.