Haseeb Qureshi, managing partner at crypto-focused venture capital firm Dragonfly, has called for winding down the Zcash developer fund when it expires under current rules in 2028, arguing that the fund has grown large enough and risks becoming politicized.

“I’m of the opinion that this should be the final Dev Fund,” Qureshi wrote in a Friday X post, adding that the fund is large enough to cover the remaining work on Zcash and risks being “politicized” as its value approaches $100 million.

The Zcash development fund held 63,962 Zcash (ZEC) tokens at press time, worth about $95 million, according to ZecStats.

The remarks came amid a broader industry debate that has gathered pace as the fund’s value climbs alongside the ZEC token’s rally. The dispute centers on a question that extends beyond Zcash: how decentralized, open-source projects can fund years of protocol development without centralizing spending decisions.

Industry divided over the fund’s future

Not everyone favors an end to the fund. Paradigm founder Matt Huang argued in a Wednesday X post that the fund is particularly important “in this age of AI cyber capabilities” and rapid quantum progress.

Zcash, launched in 2016, is a privacy-focused cryptocurrency that uses zero-knowledge proofs to enable shielded payments, and it introduced its first protocol-level dev fund in 2020. The ZEC development fund is a protocol development fund that accrues 0.1875 ZEC per block, representing 12% of the block subsidy under the NU6 upgrade. Its balance, also known as the lockbox, sits outside circulation until disbursement through governance. Under the current rules, the fund is set to expire in 2028, and any extension, restructuring, or wind-down would have to be enacted through a future network upgrade, the same process that produced NU6.

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Who should control the ZEC development fund?

Industry watchers are also debating who should control the fund. Qureshi said control should not move toward “pure token holder voting,” but voiced support for a partial model under which token holders would elect temporary councils.

Huang agreed with that view, adding that pure token holder governance may introduce “unpredictability that could limit long-term trust as a monetary asset,” and proposed a hybrid model combining additional forms of governance.

Maxime Desalle, investment analyst at Winklevoss Capital, took a harder line, suggesting in a Thursday X post that the Zcash community “completely get rid” of the development fund, which he said would resolve all of the governance disputes surrounding it.

In a previous post on Sept. 9, Desalle argued that the fund may hurt Zcash’s security while recreating the dependencies and bureaucracies that many welfare states suffer from.

Zcash founder Zooko Wilcox has defended the funding mechanism. In a Sept. 1 X post, he said the Zcash Community Grants Committee was among the main reasons Zcash “has survived and grown to where it is today.” In a Sept. 14 post, he clarified that the committee accounts for only 40% of the development fund.

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