Zcash Community Grants has withdrawn its controversial proposal to redirect approximately 98,000 ZEC toward future mining rewards after facing criticism from the community. The move leaves the network’s funding model unchanged while developers and stakeholders continue debating whether to end automatic grants or preserve the existing arrangement.

The committee responsible for financing development and community initiatives across the privacy-focused Zcash ecosystem has scrapped its proposed funding changes less than a week after introducing them.

In an announcement on Tuesday, Zcash Community Grants (ZCG) confirmed that it would not advance the proposal submitted on October 29. The committee said decisions about future funding should be handled through Zcash’s established governance process.

ZCG is managed by five committee members who approve funding for developers and ecosystem projects without requiring a separate coinholder vote for each grant. The organization receives 8% of newly issued ZEC, or approximately 144 coins daily. Its treasury has grown sufficiently to cover several years of development expenses, prompting questions about why it should continue receiving new allocations.

The debate gained momentum after ZECsy, an outreach initiative financed by ZCG, promoted private cryptocurrency payments at an adult-industry convention in New Jersey in late October. The campaign drew criticism over the committee’s spending priorities and transparency.

Supporters defended the initiative, pointing out that sex workers frequently face restrictions within traditional banking systems and could benefit from greater access to financial privacy.

Alternative Zcash Funding Plans Remain on the Table

Under the withdrawn proposal, ZCG intended to move 36,200 ZEC from its approximately 91,500-ZEC treasury into the Network Sustainability Mechanism, which provides supplementary mining rewards over time.

The plan would also have lowered the committee’s expected funding through the 2028 halving from around 109,000 ZEC to 47,000 ZEC, followed by additional reductions toward 2032.

The disagreement reflects a larger debate over how Zcash should allocate its resources. Increasing the mining reserve would mean fewer funds available for development grants, raising questions about which priorities deserve financial support.

Zcash co-founder Sean Bowe previously suggested removing ZCG’s automatic funding entirely.

Bowe later joined Zcash founder Zooko Wilcox in proposing a different arrangement that would transfer 50,000 ZEC into the Network Sustainability Mechanism and redirect future allocations toward a newly created development and legal-defense fund.

Zcash developer Daira-Emma Hopwood offered another approach, recommending that the existing 8% allocation remain intact while grants focus more heavily on expanding ZEC adoption and practical usage.

However, none of the proposals has been approved. ZCG continues to collect approximately 144 ZEC daily under the existing rules, with any changes requiring a future network upgrade.