Zcash Founder Moves to Halt $125M Grant Flow, Says Community Treasury Is Overloaded

Zcash founder Sean Bowe has taken an unusual step by proposing to cut off the automatic flow of funds to the privacy network's community grants program. The reason is simple: the program's treasury is judged to be too fat for a grant scheme, capable of funding operations for years without fresh capital.

In a draft proposal released Monday night local time, Bowe asks that the 8% allocation of every newly minted ZEC no longer be routed to Zcash Community Grants (ZCG). The funds would instead be redirected to a reserve intended to support future miner rewards through the Network Sustainability Mechanism. The ZCG committee would still be allowed to manage existing assets and continue issuing grants from that balance.

By Bowe's calculation, after subtracting outstanding grant commitments, ZCG's assets are worth about USD125 million, or roughly Rp2 trillion assuming a ZEC price of USD1,300 per coin. That figure far exceeds the program's operating needs. Data from the committee's dashboard shows a balance of about 91,453 ZEC and USD8.8 million in cash, of which USD2.4 million has already been promised to grant recipients.

What makes the proposal more sensitive is its context. Bowe's move came just days after photos circulated of a private-payments literacy program funded by ZCG at an adult industry convention in Edison, New Jersey. The team behind the program, ZECsy, requested USD550,000 for activities at various adult industry events, crypto conferences, and workshops. The ZCG committee approved initial funding and the first nine milestones totaling about USD461,500.

The decision was not unanimous. One committee member, Hanh, opposed the proposal, questioning the cost and evidence of long-term adoption. Other members backed the team's ability to reach new users, with a nine-month deadline as room for evaluation before further funding. Still, Bowe's draft does not mention the ZECsy grant at all; his argument rests purely on the size of the reserve and the continuing inflow.

"It's time to turn off the ZCG money faucet. ZCG has over USD125 million in funding, and will receive millions more before the tap is closed. This program was never designed to handle funding of this size," Bowe wrote in his post.

The ZCG structure itself differs from the second grants program, which receives 12% of new ZEC. While the second program involves coin holders in quarterly voting, ZCG is run by a five-member committee selected by a community advisory panel, without a separate vote by coin holders. Bowe argues that piling up funds in such a separate governance and custody arrangement adds risk, especially when the treasury is already very thick.

To date, the proposal has no activation date and still requires a change to Zcash network rules. That means the 8% allocation will keep flowing at about 144 ZEC per day until the new rule is actually enacted. For the Zcash community, the debate is not merely about numbers but about the direction of public-fund governance in a privacy network that has long relied on grant mechanisms to drive adoption.

If Bowe's proposal is accepted, Zcash would become one of the first crypto projects to deliberately halt its grant funding because its treasury is deemed excessive—a precedent other projects might follow. But if it is rejected, questions about the accountability and effectiveness of ZCG spending will continue to hang over every subsequent grant decision, especially those touching controversial territory.