BTC $80,003 
ETH $2,322 
MGLOEURO $111,813 
USDT $0.9986 
BNB $740.31 
XRP $1.31 
USDC $0.9993 
SOL $100.28 
TRX $0.3278 
FIGR_HELOC $1.04 Business · Explained
Zcash co-founder seeks to end automatic funding for grants program
Sean Bowe wants ZCG's 8% block-subsidy share sent to a sustainability reserve, while Josh Swihart argues for retiring the entire development fund.
Key takeaways
- Draft proposal. Bowe's ZIP would redirect ZCG's 8% block subsidy to the Network Sustainability Mechanism until 2028, while ZCG keeps its existing funds and continues grantmaking.
- Pushback. Swihart calls ending only the ZCG stream a half measure and wants both the ZCG and coinholder streams dissolved, with approved grants honored.
- Status. The proposal is a draft, has not been approved or scheduled, is not in Network Upgrade 7, and has no reference implementation or activation date.
What happened
Sean Bowe, a co-founder of Zcash, has proposed shutting off the automatic block-subsidy stream that funds Zcash Community Grants, arguing the program already holds more than $125 million and will collect millions more before the allocation ends. Cointelegraph reported that Bowe announced the idea on X and published a draft GitHub proposal. In his view, ZCG was not designed to manage funding on that scale.
The draft would redirect ZCG's 8% share of the ZEC block subsidy to the Network Sustainability Mechanism until the current funding period expires in 2028. ZCG's existing treasury would remain under its control, and the program would keep making grants. The mechanism is intended to keep ZEC out of circulation and release it gradually through future block rewards, according to the report.
Bitcoin.com News reported that Josh Swihart, founder of Zcash Open Development Lab, opposed treating ZCG as a standalone case. He described ending only that stream as a half measure and said the ecosystem should dissolve the full development fund, including the coinholder stream, if it decides to make a change. Swihart said the coinholder allocation accrues about 216 ZEC per day until the halving and presents the same problem. He also said previously approved ZCG grants should be honored.
First $1.6KLatest $1.2K-21.5% over the period
Points are daily observations, not closing prices.
Why it matters
The dispute goes beyond one budget line: it tests how Zcash governs a large pool of community-controlled assets and how much funding should flow automatically to grant committees versus a reserve. Bowe's proposal is meant to avoid concentrating more resources in ZCG when its balance is already large. Swihart's counterargument is that a partial shutdown could create uncertainty without resolving the underlying design question. Both positions focus on predictability for builders and governance, not on changing Zcash's supply limit or miner rewards; the draft says those would be preserved.
What the data shows
ZCG's dashboard listed 91,453 ZEC and $8.8 million in cash as of Wednesday, against $2.4 million in outstanding grant commitments, according to Cointelegraph. The ZEC holdings were worth about $111 million at press time. Bowe's draft estimates that at a hypothetical ZEC price of $1,300, ZCG's net resources would be about $125.3 million, enough for more than 12 years of grants at $10 million a year. It also says the current allocation is roughly 52,560 ZEC annually. Separately, ZecStats showed the development lockbox held 72,351 ZEC, worth roughly $89 million.
Background
Zcash's development funding has been under review for months. Cointelegraph reported that in September Haseeb Qureshi, managing partner at Dragonfly, proposed ending the developer fund when the current period expires, warning it could become politicized as its value approached $100 million. Swihart said ZCG was originally meant to balance governance and support speculative ideas, while coinholder grants served as a temporary bridge when money was scarce. He argued that markets prefer certainty and urged redirecting both streams to the sustainability mechanism through the upcoming halving. He also proposed a one-time, coinholder-voted endowment for a legal defense fund for Zcash developers.
What to watch
The proposal is a draft. It has not been approved or scheduled for activation, is not part of the currently specified Network Upgrade 7, and would need a later upgrade before ZCG's stream expires. No reference implementation or activation date has been established, according to Bitcoin.com News. The next signal will be whether the community pursues Bowe's narrower change or Swihart's full retirement, and how approved grants and the coinholder stream are treated in either case.
Questions readers ask
What would Bowe's proposal change?
It would end ZCG's automatic 8% block-subsidy allocation and send that share to the Network Sustainability Mechanism until the current funding period ends in 2028. ZCG would keep its existing treasury and continue awarding grants, while the separate 12% coinholder allocation would remain unchanged.
Why does Swihart object?
Swihart argues that ending only the ZCG stream is a partial step that could create market uncertainty. He wants the entire development fund retired, including both the ZCG and coinholder streams, while honoring previously approved ZCG grants.
Is the change live?
No. The proposal remains a draft and has not been approved or scheduled. It is not included in Network Upgrade 7 and has no reference implementation or activation date.
