Zcash co-founder seeks to end grants’ 8% block share

Zcash users and builders should know that the grants committee would stop receiving an automatic share of new ZEC if co-founder Sean Bowe’s draft proposal takes effect. It would redirect that 8% block subsidy allocation to the Network Sustainability Mechanism, a reserve for future mining rewards, according to Bowe’s draft ZIP. The committee would keep its existing funds and continue making grants from them.

The proposal changes where future funding goes; it does not withdraw money already allocated to grants. For ZEC holders, the immediate practical point is that nothing changes yet: the draft is not part of the currently specified NU7 upgrade and has no assigned activation date, according to CoinDesk’s report.

How much would the grants committee keep?

Zcash Community Grants (ZCG) would retain its treasury and outstanding obligations under the draft. Bowe’s calculation puts the balance after grant liabilities at about $125.3 million, using an illustrative ZEC price of $1,300; the figure is not a fixed dollar value because most of the reported holdings are in ZEC.

The draft cites a dashboard snapshot of 91,452.98 ZEC, $8,796,224 in cash and $2,417,165 in outstanding grant liabilities. At an assumed ZEC price of $500, it estimates the net balance at about $52.1 million. Those estimates use the dashboard figures recorded for the proposal and assume $10 million in annual spending; they do not guarantee how long funds will last.

Where would the 8% allocation go?

If adopted, the former ZCG share would be credited to the Network Sustainability Mechanism through the funding stream’s existing term. The draft estimates that the current 8% stream amounts to about 144 ZEC a day, or roughly $68.3 million a year at $1,300 per ZEC and the target block pace. The dollar estimate would move with ZEC’s price.

A separate 12% allocation to the Coinholder-Controlled Fund would remain unchanged. That fund’s grant decisions are subject to quarterly holder votes, while ZCG’s five-member committee is elected by a community advisory panel and selects grants without a separate coinholder vote.

What must happen before the change takes effect?

Zcash would need to adopt the proposal through a future network upgrade. Until the change activates, the existing 8% allocation continues; Bowe’s draft assigns no activation height and says it is not included in the currently specified NU7 upgrade.

The proposal redirects future subsidy allocations rather than increasing the supply of ZEC, and it leaves ZCG’s existing assets and the separate 12% fund stream in place. For grant applicants, that means the committee could continue awarding grants from its treasury, but future funding would depend on how it manages those reserves and on the proposal’s eventual adoption.

Source material

• Bowe’s draft ZIP — github.com
• CoinDesk’s report — coindesk.com