Mentioned in This Article
1. Zcash Community Grants proposal heads to a November vote
Zcash coinholders and community panels will vote from November 16 to November 30, 2026, on a draft Zcash Improvement Proposal that would remove 50,000 ZEC, worth roughly $50 million and equal to about 55% of the Zcash Community Grants treasury, from circulation and return its value to the network through future mining rewards.
The same plan would end the automatic 8% slice of newly issued ZEC that Zcash Community Grants (ZCG) currently receives. That stream would instead pile up in a new Future Dev and Legal Defense Fund, which nobody could tap until a later proposal sets the rules for withdrawals.
The draft was written by Zcash co-founders Sean Bowe and Zooko Wilcox together with Jason McGee, and it was merged on Wednesday into zcash/zips, the GitHub repository that holds the project's formal specifications. The polling schedule for coinholders and the community panels was set out in a post on the Zcash community forum.
Merging a draft into the specifications repository does not adopt it. It means the text is now part of the formal record that the community will weigh, and the November polls are the first step in testing whether the idea has enough backing to move toward a network upgrade.
2. What would happen to the 50,000 ZEC?
If the proposal is adopted and switched on in a network upgrade, ZCG would have 30 days to take the 50,000 ZEC out of circulation. The coins would not be handed to another group or spent. Their value would instead be credited to the Network Sustainability Mechanism, a reserve that was activated as part of the recent NU7 network upgrade.
The Network Sustainability Mechanism releases ZEC gradually through future block rewards. In practical terms, the coins taken from the grants treasury would trickle back out over time to the miners who produce blocks, confirm transactions and secure the network, rather than funding grant recipients.
The 50,000 ZEC figure is measured against a treasury of 91,453 ZEC, the balance recorded in an October snapshot that the draft cites. Removing that amount would take away a little more than half of the coins ZCG holds, while leaving the remainder under the committee's control.
The structure matters because it changes who ultimately benefits from the coins. Today they sit in a treasury earmarked for developers and community projects. Under the proposal, they would become part of the long-term security budget that pays block producers, without creating new supply beyond what the protocol already schedules.
3. A new fund that starts out locked
The second half of the proposal concerns the flow of new coins rather than the existing stockpile. ZCG currently receives 8% of new ZEC issuance. Under the draft, that share would stop going to ZCG and would accumulate in the Future Dev and Legal Defense Fund until Zcash's next halving.
The new fund is designed to be inert at first. No person or organization would be able to spend from it when it is created. A separate proposal would be required to define how, when and by whom money could be withdrawn, which means the community would face a second round of debate before any of those coins are used.
ZCG would not disappear under the plan. It would keep the ZEC left in its treasury after the removal and could continue awarding grants from that balance. The proposal also leaves untouched the separate 12% Coinholder-Controlled Fund, another slice of issuance that exists alongside the ZCG allocation.
The name of the new fund signals its intended purposes, ongoing protocol development and legal defense, but the draft deliberately stops short of specifying spending rules. That leaves open the question of who would eventually govern the money, a point likely to shape the follow-up proposal.
4. How Zcash pays for development
Zcash, a privacy-focused cryptocurrency that uses zero-knowledge cryptography to let users shield transaction details, funds part of its development directly from newly minted coins. Instead of sending every newly created ZEC to miners, the protocol diverts portions of issuance to development funds. ZCG's 8% share is one of those portions.
ZCG is overseen by a five-member committee that awards grants to independent developers, wallet builders and community projects. Those grants pay for much of the software that ordinary users depend on to store, send and receive ZEC, including wallets and supporting tools.
This model, often described as a development fund or dev fund, is a defining feature of how Zcash governs itself. It gives the ecosystem a predictable source of money for public-good software, but it also means every adjustment to the split between miners and funds becomes a governance question that holders and community bodies must settle.
Ending ZCG's automatic funding would therefore be a significant shift. The committee would have to finance its grants from whatever remains in its treasury, without the steady inflow of new coins it has been able to count on.
For grant recipients, the practical effect would depend on how the committee chooses to pace its remaining spending. A treasury that no longer refills on its own tends to encourage more careful budgeting, longer review of grant requests and closer attention to how each award supports the wallets and tools that users rely on every day.
5. Why is the vote taking place now?
The vote is happening because a rally in the ZEC price sharply raised the value of ZCG's existing holdings while new coins kept arriving every block. That combination prompted calls to stop adding to a treasury that many in the community considered large enough to fund grants for years.
The draft puts numbers on that argument. Using the October treasury snapshot, an assumed ZEC price of $1,300 and ZCG's spending rate from the first half of 2026, it estimates that the committee could cover roughly 13 years of expenses with what it already holds.
Taking out 50,000 ZEC would cut that runway to about six years under the same assumptions. Supporters of the proposal can point to that figure as evidence that ZCG would remain well funded, while the removed coins would be redirected toward network security.
Those estimates depend heavily on the price assumption. Because the treasury is held in ZEC, its purchasing power rises and falls with the market, and a lower price would shorten the runway in dollar terms. The draft's projection is a planning scenario, not a guarantee of how long the money will last.
6. An earlier plan that was abandoned
The current draft follows an earlier attempt to change ZCG's funding that did not survive community scrutiny. ZCG itself had proposed phasing out its funding and steering about 98,000 ZEC, drawn from both its existing assets and its future income, toward mining rewards.
That plan was dropped on November 3 after it drew criticism. The new draft is smaller in scale, removing 50,000 ZEC from the existing treasury rather than the larger combined amount, and it keeps a destination for future issuance in the form of the locked development and legal-defense fund instead of sending everything to miners.
The shift from the earlier approach to the current one shows how contested the question of development funding remains within the Zcash community. Even participants who agree that the treasury is large disagree about where surplus coins should go and who should control future issuance.
7. What has to happen before the change takes effect
Passing the November polls would not by itself change anything on the network. The replacement plan still needs broad community support and a network upgrade to take effect, and organizers will judge whether the poll results amount to what they describe as rough consensus.
If they conclude that it does, engineering teams and miners would then work toward a follow-up upgrade called NU7.1 that would carry the change. Network upgrades on Zcash require coordinated software releases, and node operators and miners must adopt the new rules for the change to activate cleanly.
For now, the timeline is open. No activation height, the specific block at which a network upgrade switches on, has been set. The draft also does not include a reference implementation, the working code that developers typically produce to show exactly how a specification would behave in practice.
That means even a favorable vote would be followed by a period of engineering work, review and testing before any coins leave the ZCG treasury or any issuance is redirected.
8. What's next for Zcash Community Grants
The immediate milestone is the polling window. Votes from coinholders and community panels open on November 16 and close on November 30, 2026, after which organizers will assess whether the results show rough consensus for the proposal.
If the polls succeed, attention would turn to the NU7.1 upgrade, the setting of an activation height and the writing of code to implement the change. Once activated, ZCG would have 30 days to remove the 50,000 ZEC, and its 8% issuance share would begin flowing into the Future Dev and Legal Defense Fund.
A further proposal would still be needed to decide how that new fund can be spent. Until then, ZCG would continue funding developers, wallets and community projects from its remaining treasury, and the 12% Coinholder-Controlled Fund would carry on unchanged.
For ZEC holders, the outcome will determine how a meaningful pool of coins is used: kept in a grants treasury, returned to miners over time or set aside for future development and legal needs. The November vote is the first concrete test of which direction the community prefers.