Zcash Community Grants proposes returning $46M from treasury amid governance criticism

Zcash Community Grants faces intense backlash after proposing on October 29, 2026, to redirect approximately $124 million in treasury and future funding to the Network Sustainability Mechanism for mining rewards. Industry figures, including Cameron and Tyler Winklevoss alongside Helius CEO Mert Mumtaz, demand the committee be dissolved in favor of direct coinholder governance, labeling the existing $125 million fund accountable to no one. Supporters defend development grants as essential for privacy upgrades.

ZCG treasury return proposal

• ▪Zcash Community Grants stated that its October 2026 plan to redirect treasury funds to the Network Sustainability Mechanism is preliminary, with a full proposal to be released later for community review.
• ▪Under its October 2026 proposal, Zcash Community Grants would forgo approximately 62,000 ZEC ($78.5 million) in future allocations and taper its remaining funding through the 2032 Zcash halving, redirecting roughly 98,000 ZEC ($124 million) total to future block rewards.
• ▪If Zcash Community Grants' proposal is approved, the five-person committee would retain about 55,200 ZEC, worth approximately $70 million, from its existing treasury.
• ▪Zcash Community Grants proposed transferring 36,200 ZEC, valued at approximately $46 million, from its treasury to the Network Sustainability Mechanism

Winklevoss criticism of grants committee

• ▪Winklevoss Capital investor Maxime Desalle, who is involved with Zcash miner Cypherpunk, called for Zcash Community Grants to be abolished outright.
• ▪On October 30, 2026, Gemini co-founders Cameron and Tyler Winklevoss called for Zcash to shut down the Zcash Community Grants committee and give ZEC holders direct control over funding decisions.
• ▪Gemini co-founder Tyler Winklevoss criticized the Zcash Community Grants committee as a slush fund with no accountability, arguing that its structure encourages poor spending and conflicts of interest.
• ▪Gemini co-founder Cameron Winklevoss stated that experimenting in governance is not part of Zcash's mission, asserting that the network's sole mission is privacy.

Governance accountability debate

• ▪Dragonfly managing partner Haseeb Qureshi and Paradigm co-founder Matt Huang argued against direct coinholder voting for Zcash grants, favoring an elected council to manage allocations instead.
• ▪Helius co-founder and CEO Mert Mumtaz dismissed Zcash Community Grants' proposal as nowhere near good enough, arguing the treasury was gargantuan and that spending decisions must be accountable to ZEC holders.
• ▪Zcash co-founder Sean Bowe submitted an October 2026 proposal to eliminate Zcash Community Grants' automatic 8% share of newly issued ZEC and redirect it to the Network Sustainability Mechanism while leaving the existing treasury intact.

Community defense of development funding

• ▪An October 27, 2026 report citing Grayscale research credited Zcash's development funding model with supporting privacy and security upgrades over the past decade.
• ▪Developer Vini Barbosa defended Zcash Community Grants, arguing that community grant funding is a fair method to compensate work that improves the Zcash network.
• ▪In August 2026, Zcash Community Grants approved $461,500 across nine monthly milestones for the ZECsy project's $550,000 outreach proposal targeting adult industry conventions, crypto conferences, and banking-restricted groups.

Network Sustainability Mechanism allocation

• ▪In September 2026, ZEC holders holding 10.4% of the circulating supply approved $8.39 million in retroactive funding for 17 development proposals.
• ▪The Network Sustainability Mechanism is a Zcash protocol reserve that temporarily removes ZEC tokens from circulation and distributes them to miners as block rewards over decades.
• ▪Under Zcash's block reward distribution rules, 20% of new tokens fund development, with 8% going to Zcash Community Grants and 12% to the Coinholder-Directed Retroactive Grants Program.