Zcash co-founder Sean Bowe proposes ending automatic funding for community grants program

Zcash co-founder Sean Bowe has put forward a draft proposal to end the automatic funding stream for the network's community grants program, known as ZCG. He argues that the program's treasury is already large enough to finance years of activity without further inflows.

Under the draft, published late Monday, automatic allocation would stop and the program's remaining 8% share of newly created ZEC would be redirected into a reserve for future mining rewards. That reserve is the Network Sustainability Mechanism, and the funds would stay there for the remainder of the grants stream's existing term. The committee would keep the assets it already holds and could continue awarding grants from them.

Bowe's calculation puts the committee's holdings, after outstanding grant commitments, at about $125 million, based on an illustrative ZEC price of $1,300. The committee's dashboard showed about 91,453 ZEC and $8.8 million, of which $2.4 million is committed to grantees. At the network's target pace the allocation brings in roughly 144 ZEC a day, or about $68 million a year. By comparison, the Financial Privacy Foundation, which administers the funds, reported just over $1.5 million in program expenses for the first quarter, roughly $6 million annualized. Bowe estimates that even at $500 per ZEC the existing treasury would cover about five years of spending at an assumed $10 million a year.

ZCG's five-member committee is elected by a community advisory panel and selects grants without a separate coinholder vote. A second funding program receives 12% of newly created ZEC, and holders vote quarterly on its grants. Bowe wants to keep that larger allocation, and his proposal argues that adding more funds to ZCG's separate custody and governance arrangements increases risk when substantial reserves already exist.

The proposal came amid criticism of a ZCG-funded outreach program, ZECsy, which demonstrated private payments at an adult-industry convention over the weekend. The team requested $550,000, and the committee approved startup funding and the first nine milestones, totaling about $461,500. One committee member, Hanh, opposed the grant over its cost and evidence of lasting adoption. Bowe's draft does not cite the grant.

The proposal has no activation date and would require a change to Zcash's network rules. Until one takes effect, the ZCG allocation continues at about 144 ZEC a day.