Zcash Grants Group Proposes $124M Treasury Shift Amid Community Backlash

Zcash Community Grants (ZCG) has put forward a proposal to shift a significant portion of its Zcash treasury away from its existing grants framework and toward the Network Sustainability Mechanism (NSM), a reserve intended to fund future block rewards. The move—discussed on the Zcash community forum this week—would substantially change how ZCG’s holdings are used over the next several years, but it has already drawn sharp criticism from prominent industry figures who argue the plan lacks transparency and holder accountability.

In the proposal, ZCG would transfer 36,200 ZEC from a treasury of roughly 91,500 ZEC into the NSM. If enacted, the committee would still retain about 55,200 ZEC (valued at roughly $70 million at the time of writing), while reducing future allocations and extending a lower-funding schedule. ZCG described the document as preliminary and said a full proposal would follow for broader community consideration.

• ZCG’s preliminary plan would move 36,200 ZEC from its treasury into the NSM and redirect a total of about 98,000 ZEC toward future block rewards.
• Under the current setup, ZCG’s automatic allocation is scheduled to end in 2028; the alternative would keep reduced funding in place for four additional years.
• ZCG says the proposal is not final yet, but critics are already arguing the treasury is oversized and oversight should be tied more directly to ZEC holders.
• Earlier debate in the Zcash community centered on ending or changing ZCG’s automatic share of newly issued ZEC—now this new proposal targets existing treasury funds as well.

According to the forum post, ZCG’s committee would redirect 36,200 ZEC into the Network Sustainability Mechanism. The NSM is designed to preserve coins for future mining-related rewards, effectively treating part of today’s treasury as a forward funding source rather than a pool for community grants.

The proposal also includes additional budget adjustments. It calls for forgoing approximately 62,000 ZEC in future allocations and tapering the remaining funding until the network’s 2032 halving. When these changes are combined, the document indicates the committee would redirect roughly 98,000 ZEC—about $124 million, based on the figures cited in the article—toward future block rewards.

Time horizon matters in this plan. Under the existing arrangement, ZCG’s automatic allocation is scheduled to end in 2028. ZCG’s alternative would extend reduced funding for another four years, shifting the structure of how support is distributed rather than simply adding or subtracting a single tranche.

While ZCG frames the proposal as an efficiency or sustainability move, several high-profile voices questioned both the legitimacy of the committee’s decisions and the size of the treasury they oversee.

Helius co-founder and CEO Mert Mumtaz described the plan as “nowhere near good enough,” arguing that ZCG’s treasury is already too large and that decisions should be accountable to ZEC holders rather than handled solely by committee governance. In particular, Mumtaz tied his criticism to the broader question of who has authority over large allocations and how that authority is exercised.

Gemini co-founder Tyler Winklevoss also challenged the committee’s accountability after Mumtaz alleged that a committee member had unfollowed him on X. Winklevoss said the behavior raised doubts about whether the person overseeing funds amounting to roughly $110 million is qualified, using the incident to underscore his view that governance should reflect more responsible oversight.

Although social-media activity is not, on its own, a measurable governance metric, both commentators used the moment to highlight a larger governance tension: whether ZCG’s current structure provides adequate accountability when it controls sizable ZEC reserves.

The controversy is not new. The current proposal follows earlier public pressure on ZCG’s role within the Zcash issuance and grants system, including a previous effort attributed to Zcash co-founder Sean Bowe.

Earlier coverage from Cointelegraph noted a proposal by Bowe to end ZCG’s automatic 8% share of newly issued ZEC and redirect that value to the NSM—while leaving the existing treasury untouched. That framing differed from the latest forum submission, which instead targets treasury holdings directly by transferring coins from the existing grant fund to the sustainability mechanism.

Taken together, the sequence suggests a widening campaign around how Zcash should balance grants and network sustainability. One approach focuses on redirecting future issuance; the other proposes reorganizing existing reserves as well. For holders watching the governance debate, this distinction is important: it changes not only where money comes from, but also how quickly and how completely the treasury might be reshaped.

It also raises practical questions for the community’s decision-making. If ZCG is able to move large treasury amounts into NSM reserves, how that interacts with the timing of halving events and the ending of current automatic allocations becomes central. The proposal’s extension of reduced funding beyond 2028, alongside tapering until 2032, implies a deliberate long-term restructuring rather than a short-term adjustment.

ZCG’s committee emphasized that the post is preliminary and that a full proposal will be presented for community consideration. That next step is where the debate is likely to move from general objections to concrete terms: exact governance mechanics, duration details, and how the community will evaluate whether the treasury is being reduced appropriately or merely reallocated.

For now, the core dispute is clear. Supporters of redirecting funds toward the NSM see it as a way to strengthen future reward sustainability. Critics argue the treasury is already too large and that governance must be more accountable to ZEC holders. The coming full proposal—and the community’s response to it—will determine whether this shift becomes a practical reallocation plan or remains another chapter in Zcash’s ongoing struggle to align grant funding with long-term network economics.

This article was originally published as Zcash Grants Group Pledges $124M to Settle Compromise Amid Backlash on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.