Zcash Holders to Vote on Pulling 50,000 ZEC From Its Grants Treasury

Zcash coinholders start voting Nov. 16 on a plan to take 50,000 ZEC, about $49.5 million at Thursday's price, out of the treasury of Zcash Community Grants (ZCG), the network's grants program. The coins would come out of circulation and return to miners over time.

The draft proposal, written by Zcash co-founders Sean Bowe and Zooko Wilcox with Jason McGee of Shielded Labs, was merged into the Zcash specifications repository late Tuesday ET. Polls for coinholders and community panels run through Nov. 30, BlockchainReporter reported.

Two changes, one vote

The proposal does two things. First, ZCG would stop receiving its 8% slice of newly mined coins. Until the third halving, that 8% would flow into a new lockbox called the Future Dev and Legal Defense Fund, and nobody could spend from it until a later proposal sets the rules.

Second, ZCG would have 30 days after activation to remove 50,000 ZEC from circulation. That is about 55% of the 91,452.98 ZEC on its dashboard in late October, the draft says.

How the mining reserve works

Zcash pays miners a subsidy per block that halves on a set schedule. The Network Sustainability Mechanism, switched on in the recent NU7 upgrade, collects removed coins and pays them back out as future block rewards, so miners have income as the subsidy shrinks.

The 8% stream works out to about 144 ZEC a day, or 52,560 a year, by the draft's math. At an assumed $1,300 per ZEC and 2026 spending levels, ZCG's treasury covers about 13 years of grants now and about six after the removal. The draft notes its dashboard figures "have not been independently reconciled."

A poll doesn't move coins. The change needs rough consensus and a follow-up network upgrade, NU7.1, with no activation height set yet. The separate 12% Coinholder-Controlled Fund is untouched.

ZEC was near $991 at 6:05 a.m. ET, up 0.8% over 24 hours, per CoinGecko.

In our opinion: the number to watch is the Nov. 30 poll result, then whether miners and engineers can agree on an NU7.1 date. The proposal shrinks ZCG's runway from about 13 years to about six on its own assumptions, at a lower price today than the $1,300 it uses. Who spends from the new lockbox, and how, is still unwritten.