Zcash Founder’s Plan: Lock Grant Money, Give $62M to Miners
Zcash could redirect future grants funding into a locked reserve while keeping its grants program running, leaving a crucial question unresolved: who could eventually authorize spending that money?
Key Takeaways
- Grants’ 8% subsidy share would be locked.
- No one could spend it without another ZIP.
- Treasury runway swings from 3.5 to 9 years.
- 50,000 ZEC would flow back via future rewards.
The October 30 proposal, from Sean Bowe of Tachyon Group and Shielded Labs’ Zooko Wilcox and Jason McGee, remained an open, unimplemented draft as of October 31.
Two pots of money
Zcash Community Grants, or ZCG, currently receives 8% of every block subsidy. The draft would stop that stream from reaching the grants committee and send it into a new Future Dev and Legal Defense Fund Lockbox instead. ZCG would keep its existing treasury, minus a 50,000 ZEC contribution toward future network rewards.
🔓
Existing ZCG treasury
Spendable now. A five-seat committee approves grants, and the Financial Privacy Foundation pays them out.
🔒
New lockbox
Fills with the future 8% stream. No custodian, no spending key, no withdrawal process yet.
The existing pot follows Zcash’s current grants rules: committee decisions don’t need ordinary sign-off from FPF’s board, though the foundation keeps a veto for specific legal and reporting duties. The lockbox has no rules for spending at all. Opening it would take a separate Zcash Improvement Proposal, so despite its name, it offers no route today to hire lawyers or pay developers.
The stream it would capture is not small. Since the 2024 halving, the block subsidy has been 1.5625 ZEC. At 75-second blocks, ZCG’s 8% works out to about 144 ZEC a day, or roughly 52,600 ZEC a year, about $65 million at ZEC’s price of around $1,240 on October 30. Under the draft, that would accumulate untouched until the third halving, expected in 2028.
In his forum announcement, Wilcox argues that the treasury has grown too large as ZEC appreciated, and that future funding should end while the program keeps the means to operate. For grant applicants, that means the committee can still fund work from what it holds, but renewal of any particular project is not guaranteed.
How long the remaining treasury lasts depends on ZEC
The full draft lists about 91,453 ZEC, $8.8 million in dollar holdings and $2.4 million in outstanding grant liabilities. After the 50,000 ZEC contribution, roughly 41,453 ZEC would remain alongside the dollars.
On spending, FPF’s second-quarter report shows about $1.5 million of ZCG expenses in the first quarter and $3.2 million in the second, including grants, discretionary spending and compensation. Doubling that first half gives an annual rate of about $9.4 million. Applied to the remaining holdings:
ZEC at $650
3.5 yrs
■■■▪
$33.3M after liabilities
ZEC at $1,300 · close to today
6.4 yrs
■■■■■■▪
$60.3M after liabilities
ZEC at $1,950
9.2 yrs
■■■■■■■■■
$87.2M after liabilities
Each block is one year at the annualized first-half spending rate. Assumes no new income, returns, obligations or conversion costs. Not a price forecast.
Two caveats sit under those numbers. The authors say the treasury dashboard they used, accessed October 26 and referencing an October 21 block, was marked “Updates required,” and they describe the figures as unreconciled. And second-quarter spending ran well above the first quarter’s, mostly on discretionary items, so the annualized rate is a reference point rather than a set budget. Price matters most: a halving or a 50% rise in ZEC moves the runway by roughly three years either way.
Where the 50,000 ZEC goes
→
Unspendable outputs
→
NSM balance
→
Future block rewards
The two parts of the draft affect supply differently. The lockbox stream stays as issued ZEC; it simply can’t be spent. The 50,000 ZEC contribution leaves issued supply and is credited to the Network Sustainability Mechanism’s balance, which under ZIP 237 feeds back into future block subsidies. The donated coins themselves become unspendable, but their value returns to circulation over time through mining rewards, so calling it a permanent 50,000 ZEC burn would be wrong.
Coindoo has covered how the NSM fits into the NU7 upgrade set for November 5 and why coinholders chose to keep the halving schedule. This draft would be one of the first large contributions into that mechanism.
The steps would not happen at once:
◆ Community acceptance of the proposal
◆ Within 30 days: the 50,000 ZEC is sent; no upgrade needed, and the transfer can’t be reversed
◇ A later upgrade after NU7: the 8% stream is redirected, and the donation is credited to the NSM
◇ A future ZIP: rules for ever spending from the lockbox
The grants committee’s own plan
ZCG has proposed something gentler. Its October 29 outline would taper funding instead of locking it:
The contributions differ by about 13,800 ZEC, roughly $17 million at current prices. The bigger difference is control: ZCG’s plan keeps a shrinking stream flowing to the people who spend it today, while the joint draft parks the stream until Zcash agrees on who can open the lockbox. A reconciled treasury statement would show exactly how much each side is arguing over.
This article is provided for informational purposes only and does not constitute financial or investment advice.
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 5,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
