Tachyon Group and Shielded Labs have proposed cutting off Zcash Community Grants’ future funding and requiring a 50,000 ZEC treasury donation, while keeping the program open to support new grants.
Summary
- ZCG’s 8% block subsidy allocation would move into a separate development and legal defense lockbox.
- The committee would retain its remaining treasury and continue funding community projects.
- A 50,000 ZEC donation would be due within 30 days of community acceptance.
- Redirecting future funding would require a network upgrade after NU7.
Zcash co-founder Zooko Wilcox announced the joint proposal on Oct. 30, describing a compromise developed by Tachyon Group, led by cryptographer Sean Bowe, and Shielded Labs. Their plan would preserve ZCG’s grantmaking work while ending the automatic funding that has helped build its treasury.
The draft names Bowe, Wilcox, and Shielded Labs’ Jason McGee as its owners. Created on Oct. 29, it remains an unassigned Zcash Improvement Proposal, with no activation date set.
Zcash proposal separates future funding from existing grants
The draft ZIP would redirect ZCG’s 8% share of the block subsidy into a new Future Dev and Legal Defense Fund Lockbox for the remainder of the funding stream’s term.
That money would accumulate at the protocol level without a custodian or spending key. Nobody could withdraw it until a future ZIP established how disbursements would work.
Bowe said the replacement followed conversations with ZCG and other stakeholders. His earlier proposal would have sent the ongoing funding stream to the Network Sustainability Mechanism. The new version reserves that stream for possible future spending, subject to a separate community decision.
The existing Coinholder-Controlled Fund’s 12% stream and the Deferred Dev Fund Lockbox would remain unchanged.
ZCG would continue operating with the assets left after its required donation. The proposal therefore differs from another draft seeking to wind down the grants program altogether.
The 50,000 ZEC donation carries a separate deadline
The treasury reduction would require ZCG to direct the Financial Privacy Foundation, which holds the program’s funds, to send 50,000 ZEC to a published, unspendable address.
That payment would have to happen as soon as possible and no later than 30 days after community acceptance. ZCG would publish the transaction identifiers after the payments were mined, allowing the community to check the transfers onchain.
The draft separates this obligation from the software changes. Sending the donation would not require a network upgrade. Redirecting the funding stream and incorporating donated coins into the Network Sustainability Mechanism would require consensus changes in an upgrade after NU7.
Under the proposed mechanism, donated ZEC would leave circulation and enter the NSM balance, returning through future block subsidies. The donation would therefore support future issuance rather than permanently remove those coins from Zcash’s monetary schedule.
The document gives no calendar date for the required upgrade and lists no reference implementation yet.
Treasury estimates depend on a $1,300 ZEC assumption
The proposal cites dashboard figures of 91,452.98 ZEC and approximately $8.8 million in dollar holdings, against roughly $2.4 million in outstanding grant liabilities.
Using an assumed ZEC price of $1,300, its authors calculate a treasury value of $125.3 million after those liabilities. Donating 50,000 ZEC would leave 41,452.98 ZEC, alongside the dollar holdings, producing an estimated remaining value of $60.3 million.
At that assumed price, the donation would be worth $65 million. The binding requirement is denominated in ZEC, so its dollar value would change with the market.
Those estimates use dashboard inputs accessed on Oct. 26, with an underlying block reference dated Oct. 21. They are the proposal’s financial baseline, rather than a current treasury valuation.
The authors estimate annual spending of approximately $9.4 million by doubling reported expenses for the first half of 2026. On that basis, the remaining treasury would cover around 6.4 years of spending, assuming the stated price and no further receipts or obligations.
Zooko seeks support without closing the grants program
In his announcement, Wilcox described the dispute as a governance crisis but defended ZCG’s record of funding wallets and the development of coinholder voting.
He urged authors of competing proposals to withdraw them and support the compromise. Bowe said he had decided to withdraw his original proposal and had asked ZCG to withdraw its recent proposal as well.
The discussion follows Wilcox’s June forum post, which questioned whether rising ZEC prices warranted changes to development funding. At the time, he supported retaining a development fund in some form.
Wilcox said Shielded Labs receives funding from voluntary donations by Zcash holders and supporters, rather than ZCG. The new draft leaves the grants committee responsible for allocating its remaining treasury.
