Zcash co-founder Sean Bowe has proposed discontinuing automatic funding for the network’s community grants program, arguing that its existing reserves can sustain operations for years without additional allocations.

In a draft published late Monday, Bowe proposed ending the automatic distribution of newly issued ZEC to Zcash Community Grants (ZCG). Under the plan, the program’s remaining 8% allocation would instead be directed to a reserve intended to fund future mining rewards.

The proposal would not affect assets already held by the committee. ZCG could continue awarding grants using its existing treasury, which Bowe estimates is worth around $125 million after outstanding commitments, based on an assumed ZEC price of $1,300.

Bowe said the program now controls more funding than its original design anticipated, raising questions about the need to keep sending it new coins automatically.

Zcash Proposal Targets Automatic Grant Funding

ZCG is managed by a five-member committee elected by a community advisory panel. The committee independently selects grant recipients without requiring a direct vote from ZEC holders.

A separate funding program receives 12% of newly issued ZEC and distributes grants through quarterly token-holder votes, subject to participation and approval requirements. Bowe’s proposal would preserve this allocation while eliminating ZCG’s separate funding stream.

He argues that continuing to accumulate money under ZCG’s distinct custody and governance arrangements introduces unnecessary risks when the committee already has significant financial resources.

The proposed redirection would send the 8% allocation to the Network Sustainability Mechanism, which is designed to support mining rewards over the longer term. The funds would remain in the mechanism for the rest of the grants program’s existing funding period.

$125 Million Treasury Raises Questions Over Spending

ZCG’s dashboard showed approximately 91,453 ZEC and $8.8 million, alongside $2.4 million in outstanding grant commitments. Using a ZEC price of $1,300, Bowe estimates the remaining treasury at approximately $125.3 million.

The program continues to receive around 144 ZEC daily under the network’s target issuance schedule. At the price used in the proposal, that amounts to roughly $68 million in annual funding.

Its reported expenses are considerably lower. The Financial Privacy Foundation, which administers ZCG’s funds, recorded slightly more than $1.5 million in program expenses during the first quarter. Annualized, that figure would be approximately $6 million, representing less than one-tenth of the projected yearly allocation.

Bowe also estimates that the treasury could cover about five years of spending even if ZEC fell to $500, assuming annual expenses of $10 million.

ZECsy Outreach Initiative Adds to Funding Debate

The proposal comes as a separate grant-funded initiative faces scrutiny for demonstrating privacy-focused payments at an adult-industry convention over the weekend.

ZECsy requested $550,000 to support outreach at adult-industry events, cryptocurrency conferences, and workshops. The initiative aims to help workers who face banking restrictions accept payments without disclosing sensitive financial information.

ZCG approved startup funding and the first nine milestones, amounting to approximately $461,500. Images of the team’s booth at the Exxxotica convention in Edison, New Jersey, circulated on X on Sunday.

The grant received mixed reactions when approved in August. Committee member Hanh opposed it, citing concerns about the cost and the lack of evidence for sustained adoption. Other members argued that the initiative could introduce Zcash to new users. The nine-month funding period was intended to give the committee time to evaluate the results before considering further support.

Bowe’s proposal does not explicitly mention the ZECsy grant. Instead, it focuses on the size of ZCG’s treasury and the continued automatic flow of funds.

The draft does not set an implementation date and would require changes to Zcash’s network rules. Until those changes take effect, the committee will continue receiving approximately 144 ZEC per day.