Zcash Community to Vote on Plan to Redirect 50,000 ZEC to Mining Rewards
Zcash holders are preparing to vote on a proposal that would remove 50,000 ZEC from the network's community grants treasury and redirect its value toward future mining rewards.
The draft Zcash Improvement Proposal (ZIP) was added to the project's specifications repository on Wednesday. Community polls will open on November 16 and remain available until November 30, allowing coinholders and community panels to share their views.
The proposed removal accounts for approximately 55% of the 91,453 ZEC held by Zcash Community Grants (ZCG), based on an October treasury snapshot. ZCG currently uses these funds to support developers, wallet providers and other projects across the ecosystem.
If the proposal receives approval and becomes part of a future network upgrade, ZCG would have 30 days to remove the 50,000 ZEC from circulation. The value would then be transferred to the Network Sustainability Mechanism, a reserve introduced through the recent NU7 upgrade. The mechanism is designed to distribute ZEC gradually through future block rewards.
Zcash Proposal Would End Automatic Grants Funding
The plan also includes a major change to how ZCG receives funding. Under the current system, the grants committee receives 8% of newly issued ZEC. The proposal would end this allocation and direct the same share into a new Future Dev and Legal Defense Fund.
The new fund would collect resources until Zcash reaches its next halving. However, withdrawals would initially be restricted, with a separate proposal required to establish rules for accessing the money.
ZCG would retain its remaining treasury and continue supporting projects through grants. The separate 12% Coinholder-Controlled Fund would not be affected by the proposed changes.
Zcash currently finances part of its development through newly created tokens. The 8% allocation allows ZCG's five-member committee to distribute grants to independent developers, wallet builders and community initiatives.
Removing this automatic funding would make the committee more dependent on its existing reserves. At the same time, redirecting 50,000 ZEC would increase the resources available for future mining rewards. Miners play an important role in confirming transactions and maintaining the network's security.
Treasury Size Becomes a Point of Debate
The proposal comes as ZEC's price rally has significantly increased the value of the grants treasury. The growing reserves, combined with continued funding from new token issuance, have raised questions about whether ZCG needs to keep receiving its current allocation.
According to the proposal's estimates, the committee could cover approximately 13 years of operating expenses using its October treasury balance, assuming a ZEC price of $1,300 and spending levels based on the first half of 2026.
Removing 50,000 ZEC would reduce that estimated runway to around six years.
An earlier plan from ZCG proposed gradually cutting its funding and redirecting approximately 98,000 ZEC from existing holdings and future income toward mining rewards. However, the committee dropped that proposal on November 3 after receiving criticism from the community.
The latest version takes a different approach but still requires community approval before implementation.
Organizers will review the November voting results to determine whether the proposal has achieved sufficient community support, described as "rough consensus." If approved, developers and miners would then work toward a follow-up network upgrade called NU7.1.
No activation block height has been announced, and the draft does not yet include a reference implementation.