Zcash grants group offers $124M compromise as governance backlash grows

Zcash Community Grants (ZCG) has proposed redirecting about $46 million in Zcash tokens from its treasury to future block rewards, but industry figures criticized the move, demanding greater accountability for the fund. 

On Thursday, ZCG proposed transferring 36,200 ZEC from its roughly 91,500-ZEC treasury to the Network Sustainability Mechanism (NSM), which reserves coins for future mining rewards. If approved, the committee would retain about 55,200 ZEC, worth about $70 million at the time of writing. 

The group also proposed forgoing about 62,000 ZEC ($78.5 million) in future allocations and tapering its remaining funding until the 2032 halving. Together, the changes would redirect about 98,000 ZEC (about $124 million) toward future block rewards. 

Under the current arrangement, ZCG’s automatic allocation is scheduled to end in 2028. Its alternative would extend reduced funding for another four years.

ZCG said the plan was preliminary, with a full proposal to follow for community consideration. 

Helius co-founder and CEO Mert Mumtaz called the proposal “nowhere near good enough,” saying the treasury was already too large and arguing that funding decisions should be accountable to ZEC holders

Gemini co-founder Tyler Winklevoss also questioned the committee’s accountability after Mumtaz said a committee member had unfollowed him on X. Winklevoss said such behavior made someone unqualified to oversee $110 million.

The criticism follows Zcash co-founder Sean Bowe’s earlier proposal to end ZCG’s automatic 8% share of newly issued ZEC and redirect it to the NSM while leaving the existing treasury untouched.

Related: Winklevoss-backed Zcash ETF files with SEC for Nasdaq listing