Zcash Could End Flow of Block Rewards to Community Grants as Polls Open Nov. 16

A proposal to end Zcash Community Grants (ZCG), the grants program that receives part of Zcash’s Dev Fund, as a recipient of 8% of every block reward is now an official draft.
The draft Zcash Improvement Proposal (ZIP), the format for changing the Zcash protocol and its rules, was merged into the project’s GitHub repository early on Nov. 11 UTC by ZIP editor Jack “str4d” Grigg.
Draft status does not change anything onchain: the plan would need a later network upgrade to take effect. Its backers threw their support behind it on Oct. 30 amid debate over the size of ZCG’s treasury.

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What the Draft Would Do
Written by Sean Bowe of Project Tachyon and Zooko Wilcox and Jason McGee of Shielded Labs, the draft ZIP ends ZCG’s 8% funding stream. The coins would still be issued, but from activation up to Zcash’s third halving they would be paid into a new pool, the Future Dev and Legal Defense Fund Lockbox. The authors note that “no disbursement mechanism is currently defined for this lockbox,” so a future ZIP would have to decide how that money gets spent.
The draft also requires the ZCG Committee to take 50,000 ZEC out of circulation within 30 days of activation and credit it to the Network Sustainability Mechanism (NSM), which pays removed ZEC back out gradually as part of future block rewards. The authors put that at about 55% of ZCG’s ZEC. Using the draft’s own figure of 144 ZEC a day for the 8% stream, Unchained calculates the removal equals about 347 days of that stream. The draft leaves alone a separate 12% slice of the block subsidy, which goes to the Coinholder-Controlled Fund.
The authors wrote that “the rapid rise in the price of ZEC has enlarged the monetary value of ZCG’s treasury to a much greater amount than ever before.” The draft leans on figures from ZCG’s own dashboard, accessed Oct. 26: about 91,453 ZEC and roughly $8.8 million held in dollars, while the program still owes about $2.4 million on grants it has committed to.
An Exception for This Round
The merge followed a dispute over whether governance changes belong in the ZIP process at all. On Nov. 3, str4d held the draft back, writing that the editors had agreed “new ZIPs that affect governance should be directed into some new body rather than through the ZIP process.” On Nov. 10, str4d lifted that hold, writing that the editors “decided to accept this specific set of governance ZIPs being polled, but will leave a general block on future governance ZIPs until we have a chance to discuss the process going forward.”
ZCG itself had dropped a plan of its own on Nov. 2 to taper its share and move part of its ZEC to the NSM, saying the community should settle the Dev Fund’s future through governance. Two competing drafts are still open: one to wind down ZCG and redirect its funding, and a Zcash Adoption Pool (ZAP) proposal that would keep ZCG’s share under a new name.
Polls Run Nov. 16 to 30
The five groups that run Zcash’s coinholder voting (Project Tachyon, Shielded Labs, Valar Group, the Zcash Foundation and ZODL) laid out the schedule on Nov. 5, in a forum post published by Jason McGee, one of the draft’s co-authors. Coinholders and community panels can vote from Nov. 16 until 11:59 p.m. UTC on Nov. 30. “We’ve set an expedited timeline because tensions were high,” the five organizations wrote in the post.
If the results show rough consensus, the five said they would back Network Upgrade 7.1 to implement the winning proposal, with engineering teams and miners agreeing on a target date.
Related Listen: Bits + Bips: How Claude Found Zcash’s Counterfeiting Bug

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