Zcash holders to vote on pulling 50,000 ZEC from the grants treasury
Zcash holders will vote next week on a proposal to transfer 50,000 ZEC from the network's grants treasury to a miner reward reserve, ending the grants committee's automatic 8% block reward cut.
The draft Zcash Improvement Proposal (ZIP), merged into the project's specifications repository on Wednesday, asks the Zcash Community Grants (ZCG) to transfer 50,000 ZEC from its existing treasury into the Network Sustainability Mechanism (NSM). This would redirect funds that were previously allocated for grants back to miners through future block rewards.
The proposal also aims to end ZCG's automatic 8% slice of block rewards once the NU7 network upgrade arrives. Instead, that funding stream would be redirected into a new locked pool called the "Future Dev and Legal Defense Fund," which would require its own proposal for any spending.
Treasury reallocation details
ZCG currently holds approximately 91,453 ZEC and roughly $8.8 million in cash. If the 50,000 ZEC transfer is approved, the committee would be left with an estimated 41,453 ZEC. The committee also carries about $2.4 million in outstanding grant liabilities that represent existing commitments to grantees.
The NSM, created under ZIP 237, functions as a slow-release reserve where ZEC is gradually paid out to miners over time as part of their rewards. This means the 50,000 ZEC would not be burned or given to a new committee, but rather parked in a mechanism that drips it back into the mining economy block by block.
Governance context
This proposal emerges from recent governance tensions. ZCG had previously floated its own plan involving approximately 98,000 ZEC but withdrew that proposal on November 3, 2026, following community criticism. The co-founders' draft, dated October 29, 2026, offers a competing vision for the grants treasury and funding stream.
The name of the new fund is also worth noting. Labeling it a "Future Dev and Legal Defense Fund" signals that the authors want money set aside for both engineering and potential legal needs, rather than routing everything through one grants process.
Implications for the ecosystem
For builders who depend on grants, ZCG would keep an estimated 41,453 ZEC and approximately $8.8 million in cash against $2.4 million in existing liabilities. This provides room to honor current commitments, but without the 144 ZEC per day inflow that would stop after NU7, future grants would draw down a pool that no longer refills.
The draft proposal remains unfinished in formal terms, lacking a ZIP number and activation schedule. Beyond the upcoming vote, the plan requires broad community support and the successful implementation of the NU7 network upgrade before any changes take effect.
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