Zcash Grants Group Offers $124M Compromise Amid Governance Backlash

(MENAFN- Crypto Breaking) Zcash Community Grants (ZCG) has put forward a proposal to reroute roughly $124 million worth of ZEC from its treasury toward future block rewards, but prominent industry figures are pushing back-arguing the plan doesn't sufficiently address accountability and transparency concerns around how the fund is managed.

The proposal, submitted to the Zcash community forum on Thursday, would shift 36,200 ZEC (out of a treasury holding about 91,500 ZEC) into the Network Sustainability Mechanism (NSM), which is designed to reserve coins for later mining reward issuance. If the proposal passes, ZCG would keep about 55,200 ZEC-valued around $70 million at the time of writing.

Key takeaways

ZCG's proposal would move 36,200 ZEC from its treasury into the NSM for future block rewards if approved. The committee would also reduce by about 62,000 ZEC the ZEC it expects to allocate in the future, tapering remaining funding until the 2032 halving. Altogether, the plan aims to redirect about 98,000 ZEC (around $124 million) toward future block rewards. Critics argue the treasury is already too large and say funding decisions must be accountable to ZEC holders. The proposal is described as preliminary, with a full proposal expected later for community consideration.

What ZCG is proposing

In its forum posting, ZCG outlined a two-part approach: first, reallocating coins into the NSM, and second, adjusting how future grant-related allocations would be handled.

Specifically, the group proposed transferring 36,200 ZEC from its treasury to the NSM. The NSM functions as a reserve mechanism intended to support future mining rewards, meaning coins placed there are effectively earmarked for later issuance rather than distributed through grant programs.

ZCG also proposed foregoing approximately 62,000 ZEC in future allocations and gradually tapering its remaining funding until the 2032 halving event. Combining these elements, the plan would redirect about 98,000 ZEC-reported at roughly $124 million-toward future block rewards.

Under the current structure, ZCG's automatic allocation is scheduled to end in 2028. ZCG's alternative would reduce funding for an additional four years, extending the tapering period beyond the existing timeline.

Preliminary proposal, but accountability questions land quickly

ZCG characterized the plan as preliminary, stating that a full proposal would follow for community review. Still, the initial details were enough to trigger criticism from notable figures in the space.

Helius co-founder and CEO Mert Mumtaz described the proposal as“nowhere near good enough.” His argument centers on the idea that the treasury is already oversized, and he also emphasized that funding decisions should be accountable to ZEC holders rather than handled primarily through committee processes.

Mumtaz's criticism also referenced a perceived governance problem involving committee behavior. He pointed to an account action on X-saying a committee member unfollowed him-calling attention to the lack of accountability he believes should come with overseeing a pool of public value.

Gemini co-founder Tyler Winklevoss added to the governance concerns. Winklevoss questioned whether the committee is properly accountable after Mumtaz's remarks about the unfollowing incident. He said such conduct makes someone unqualified to oversee funds on the scale involved, tying the issue back to the magnitude of the treasury and related allocations discussed in the proposal.

Why this dispute matters to ZEC holders

At the center of the pushback is a familiar tension in crypto governance: when funds are managed via committees and automated allocation rules, token holders often expect clear, verifiable accountability-especially when large treasuries are involved.

In this case, the proposal would materially change the flow of ZEC. Moving coins from a grant-focused treasury into the NSM would effectively shift part of the system's longer-term economics away from grants and toward block reward dynamics. For investors and ecosystem participants, that can influence expectations around how resources will be distributed over time, and whether grant funding remains consistent enough to support development priorities.

The criticism also reflects a broader question: whether the“end” of an allocation program should come with a clean, well-justified restructuring, or whether partial adjustments-while reducing future allocations-still leave key governance concerns unresolved.

How this follows earlier Zcash funding proposals

The latest backlash comes after Zcash co-founder Sean Bowe advanced an earlier proposal aimed at changing ZCG's ongoing allocation. According to earlier coverage from Cointelegraph, Bowe proposed ending ZCG's automatic 8% share of newly issued ZEC and redirecting that flow to the NSM, while leaving the existing treasury unchanged. That earlier approach focused on the mechanics of automatic allocation from ongoing issuance rather than immediately reallocating the existing pool.

Compared with Bowe's framing, ZCG's current proposal does more than adjust new allocations: it would also move a substantial portion of its existing treasury into the NSM and reduce future funding totals, extending a reduced funding period beyond 2028 rather than ending automatically allocated commitments at that point.

Even so, the debate remains closely tied to governance legitimacy. Critics are not only weighing whether the treasury should be smaller, but also scrutinizing who has authority to make these decisions and what accountability mechanisms exist for token holders.

What to watch next

Because ZCG says the submission is only preliminary and a full proposal will come later, the next phase for ZEC holders will be clarity: whether the complete plan strengthens transparency, defines measurable governance and accountability steps, and explains how the community can verify that decision-making aligns with holder interests as funding expectations shift through the 2028 and 2032 milestones.

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