Zcash is facing a growing dispute over how to finance development after co-founder Sean Bowe proposed ending automatic payments to the Zcash Community Grants program, which holds more than $125 million in assets and obligations.
The debate comes as the privacy-focused cryptocurrency approaches its 10th anniversary on Oct. 28. Zcash has seen stronger market interest, higher transaction activity and wider use of shielded transactions, increasing attention on how newly issued ZEC should be allocated. According to CryptoSlate, several competing proposals now range from ending only future payments to dismantling the entire development-funding system.
Proposals target Zcash’s development funding
In a draft proposal dated Oct. 26, Bowe called for ZCG’s 8% share of block rewards to be redirected to the Network Sustainability Mechanism, or NSM. The NSM is a protocol reserve intended eventually to support future block rewards.
Bowe argued that ZCG already has sufficient resources to fund development for years and wrote that its funding stream should be turned off. His proposal would leave ZCG’s existing assets in place while stopping new automatic allocations. It would also leave a separate 12% funding stream controlled by ZEC coinholders unchanged.
The size of ZCG’s resources depends partly on the valuation assigned to ZEC. The proposal estimated more than $125 million based on approximately 91,453 ZEC, $8.8 million in dollar-denominated assets and $2.4 million in outstanding obligations, using a ZEC price of $1,300. At that valuation, ZCG’s annual allocation would be about $68.3 million, compared with annualized expenses of $6.12 million based on its first-quarter spending.
Another proposal from Maxime Desalle would go further by dissolving ZCG, halting new grant approvals and moving its remaining treasury to the NSM after existing commitments were met. Desalle argued that a small community advisory panel can influence spending while the broader economic cost is borne by ZEC holders. He also disclosed a connection to Cypherpunk, a major Zcash mining company, while saying the proposal was independent of his employment.
Bowe later said he would personally support considering a transfer of ZCG’s existing treasury, although he preferred to treat that issue separately from the question of ending future payments.
Winklevoss and Swihart call for wider changes
The dispute has also drawn support for eliminating both of Zcash’s development-funding channels. Gemini co-founder Tyler Winklevoss endorsed ending the grants arrangement, while ZODL founder Josh Swihart argued that removing only ZCG’s allocation would not settle the underlying issue.
Swihart said the coinholder-controlled program receives approximately 216 ZEC each day, meaning that it can continue accumulating resources as the token’s value rises. His proposal would eliminate both streams, redirect their allocations to the NSM and honor existing grant obligations before transferring eligible remaining funds.
He also suggested a one-time legal-defense endowment approved by coinholders for Zcash developers. Swihart acknowledged that ZODL recently received a retroactive coinholder grant for core protocol development and could seek further financing if the program continued. His proposal would remove that potential source of funding, including for his own company.
A competing plan from community contributor Dismad would take a slower approach. Under the draft dated Oct. 27, combined developer funding would decline from 20% to 10% around the 2028 halving, then fall to 5% in 2032 before ending in 2036. That plan would preserve the existing governance arrangements while providing a reduced funding stream for roughly another decade.
The proposals therefore present four different outcomes: Bowe would stop new ZCG payments; Desalle would dissolve ZCG; Swihart would end both development-funding streams; and Dismad would phase them out over time.
Growth in Zcash usage raises the stakes
The calls for cuts contrast with Grayscale’s assessment that protocol-funded research has helped Zcash remain technologically competitive. The asset manager pointed to privacy upgrades including Sapling, Orchard and the recently introduced Ironwood pool. It said further investment may be needed to expand transaction capacity, prepare for quantum-computing threats and respond to cybersecurity risks.
ZecStats data cited in the source showed ZEC up about 260% over the previous year, trading above $1,200 and taking its market capitalization beyond $20 billion. The token had also risen roughly twentyfold since the beginning of 2025, when it traded near $60.
Network activity increased alongside the price gains. Zcash processed an average of about 11,300 transactions per day in late October, approximately 70% more than a year earlier. Shielded transactions represented around 62% of activity, up from roughly 24% during the same period in 2025. About 4.96 million ZEC, or 29% of issued supply, were held in shielded pools.
Institutional exposure has expanded as well. Grayscale’s Zcash exchange-traded product, ZCSH, reported approximately $708 million in net assets as of Oct. 26. The combination of higher usage, a larger market and increased investment exposure makes the decision over future development funding more consequential for Zcash’s governance and upgrade pipeline.
Moneyiar market picture
Moneyiar market data recorded Zcash at $1,217.5366787048 as of Oct. 25, 2026, at 22:38 +03:30. ZEC was up 1.24% over 24 hours and 9.57% over seven days. The figures are Moneyiar data at that time and are separate from the valuations and market statistics cited in the source.
