Zcash coinholders will be asked from Nov. 16 whether to take 50,000 ZEC out of the Zcash Community Grants treasury and end the program’s 8% cut of new coins, under a compromise proposal from co-founder Zooko Wilcox, Sean Bowe and Jason McGee. The draft was merged into the Zcash Improvement Proposal repository on Wednesday, putting it on the ballot alongside a plan to wind the program down entirely and two options that would keep its funding. The 50,000 ZEC is worth about $49 million at Thursday’s price, and the outcome will decide what the planned NU7.1 network upgrade does.
What the proposal would change
The draft makes two changes. First, Zcash Community Grants (ZCG) would stop receiving its 8% share of the block subsidy when the proposal activates. That same 8% would instead flow into a new “Future Dev and Legal Defense Fund Lockbox” until the end of the current funding period. Nobody could spend from it at first. The draft says the community “will need to decide upon and specify a suitable decentralized mechanism” for withdrawals in a later proposal.
Second, the ZCG committee would have to remove 50,000 ZEC from circulation within 30 days of activation, crediting it to the Network Sustainability Mechanism, which returns removed coins to miners gradually through future block rewards. The draft calls that about 55% of ZCG’s ZEC. The program would keep the rest of its treasury and keep issuing grants. The separate 12% Coinholder-Controlled Fund is untouched.
The intended route for the removal is ZIP 233, which lets a transaction carry an amount that is destroyed when it is mined. ZIP 233 was not part of NU7, so the draft also specifies a fallback: an unspendable address that would be used only if ZIP 233 is not live when the change activates.
Why ZCG’s money became a fight
The argument is about scale. ZEC’s rally turned a grants budget into a large treasury while new coins kept arriving. The draft cites ZCG dashboard figures of 91,452.98 ZEC plus $8.8 million in U.S. dollars, against $2.4 million of outstanding grant commitments, and spending of about $9.4 million a year based on the first half of 2026. The 8% stream adds about 144 ZEC a day, or 52,560 ZEC a year.
At an assumed $1,300 per ZEC, the authors estimate ZCG could fund about 13 years of spending today and roughly six years after the removal. ZEC has since fallen. It traded near $980 on Thursday, according to CoinGecko. Using the draft’s own inputs at that price, our calculation puts the runway at about 10 years before the removal and about five years after it. The incoming stream alone would still be worth around $51 million a year at today’s price, more than five times what ZCG spent.
Wilcox did not soften the backdrop. “The Zcash community is going through a governance crisis,” he wrote when introducing the proposal on the Zcash forum on Oct. 30, adding that the program had been “necessary to sustain and develop Zcash for many years.” ZCG had floated its own plan to scale back its funding before abandoning it on Nov. 3 after criticism, CoinDesk reported.
What is on the ballot
The draft poll questions, posted on Tuesday by the groups coordinating the vote, ask participants to back or oppose each option separately, and allow support for more than one. The first four questions cover winding ZCG down and ending new grants, the 50,000 ZEC compromise, a “Zcash Adoption Pool” that would keep the treasury and the 8% stream through November 2028 with grants focused on adoption, and keeping ZCG’s current funding unchanged until the 2028 halving. A fifth question asks whether NU7.1 should also cut Zcash’s target block time to 20 seconds, a change we covered on Monday.
The wording is still being argued over. One forum participant objected that describing the compromise as one “that led several authors to withdraw their competing proposals” amounted to advocacy, and the organizers said a revised draft would follow. Proposals submitted a few hours after the Nov. 8 deadline were excluded.
Polls for coinholders and community panels run from Nov. 16 to Nov. 30. They are advisory. The organizers, Project Tachyon, Shielded Labs, Valar Group, the Zcash Foundation and ZODL, said they will judge whether results show “rough consensus” before engineers and miners agree on a date for NU7.1.
What to watch
Three things matter between now and December. The final poll wording, which shapes how a split vote is read. Turnout across coinholders and the community panels, since a result that only one group backs will be hard to call consensus. And whether ZIP 233 is ready to ship with NU7.1, because that decides how the 50,000 ZEC would actually be removed. The proposal has no activation height and no reference implementation yet.
FAQ
Would the 50,000 ZEC be burned for good?
Not in the usual sense. The coins would leave circulation and be credited to the Network Sustainability Mechanism, which pays them back out to miners over time through block rewards.
Does Zcash Community Grants shut down under this plan?
No. ZCG would keep its remaining treasury and continue awarding grants, but it would no longer receive new ZEC from the block subsidy. A separate ballot option would wind the program down.
When could the change take effect?
Only after polls close on Nov. 30, and only if organizers find rough consensus. It would then need the NU7.1 network upgrade, which has no date yet.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
