Dragonfly Partner Targets the Dev Fund

Dragonfly managing partner Haseeb Qureshi has called for privacy-focused cryptocurrency Zcash (ZEC) to wind down its developer fund when the current funding cycle expires in 2028, setting up one of the sharpest governance disputes the protocol has faced. In a Friday post on X, Qureshi wrote, “this should be the final Dev Fund,” arguing that existing resources are already sufficient to complete Zcash's remaining development work. A fund approaching $100 million in value, he warned, risks politicization — bent toward factions and short-term interests, the kind of governance friction that has derailed protocol treasuries elsewhere.

On-chain data tracked by ZecStats shows the development fund currently holds 63,962 ZEC, worth roughly $95 million at prevailing prices. The fund is not a discretionary treasury in the conventional sense: it accrues 0.1875 ZEC per block, equal to 12% of the block subsidy under the NU6 upgrade, and the balance accumulates in a locked lockbox outside circulation until governance decides how to disburse it. None of that ZEC has touched the open market, meaning the nine-figure valuation is a paper figure that moves with the coin's price rather than realized selling pressure. And because the funding formula is written into protocol rules rather than a foundation's budget, any change to it runs through the same upgrade machinery Zcash has used to revise its funding structure at past network upgrades.

Market performance has amplified the dispute. Developers confirmed the NU7 upgrade for November, which cuts block times from 75 seconds to 25 while preserving the halving schedule — a change that sent the token up 20% in a single day. The rally lifted the lockbox to its current valuation, and ZEC's spot price has since added a further 7.3% over the past 24 hours, meaning the fund's dollar value is still climbing while the fight over its future remains unresolved. For Qureshi, that combination — a swelling balance with no settled disbursement mechanism — is precisely why a sunset date matters.

post https://x.com/hosseeb/status/2100699320790011943

Paradigm and Zooko Push Back

Paradigm founder Matt Huang pushed back in a Wednesday X post, arguing that sustained funding matters more, not less, as technical threats compound. Huang called the dev fund particularly important “in this age of AI cyber capabilities,” citing the rapid advance of quantum computing as reason to keep Zcash's privacy research capitalized over the long term. The nature of the work supports that position: the zero-knowledge stack securing shielded transactions — whose foundations trace back to the protocol's trusted setup ceremony — demands continuous, expensive research rather than one-off grants.

Huang also aligned with Qureshi on structure, warning that pure token-holder governance could inject “unpredictability” that erodes long-term trust in ZEC as a monetary asset, and endorsed a hybrid model, though he stopped short of proposing a concrete framework. Under Qureshi's preferred hybrid, token holders would elect temporary councils rather than vote directly on each disbursement.

A harder line came from Maxime Desalle, investment analyst at Winklevoss Capital, who suggested in a Thursday X post that the community “completely get rid” of the dev fund — a step he argued would resolve the surrounding governance disputes in one stroke. In a Sept. 9 post, Desalle went further, claiming the fund could damage Zcash's security while recreating the dependencies and bureaucracies associated with welfare states.

Co-founder Zooko Wilcox defended existing arrangements in a Sept. 1 post, writing that the Zcash Community Grants Committee is among the main reasons Zcash “has survived and grown” to its current scale. He clarified on Sept. 14 that the committee accounts for only 40% of the development fund's budget, leaving the remaining 60% under other mechanisms — a split that shows how many funding channels a full sunset would need to unwind.

No formal on-chain proposal to end the fund has been submitted yet; the dispute so far remains at the level of investor and founder commentary, playing out across an altcoin market in which treasury governance has repeatedly split communities.

post https://x.com/matthuang/status/2100276142225973560

2028 Expiry Sets the Deadline

The coinholder vote record shows the community can decide binding questions when proposals actually reach the chain: holders backed the NU7 parameters — 25-second blocks alongside the retained halving — with 99.9% support in the NU7 vote. The lockbox's surge past $95 million has turned what would otherwise be a routine disbursement question into a broader contest over Zcash's entire development model, and institutional attention raises the stakes further: Grayscale's ZCSH fund, a trust vehicle giving traditional-market investors exposure to ZEC, has $500 million in assets.

The road to a verdict runs through concrete checkpoints. The next confirmed date on the calendar is NU7's November activation, while any binding decision on the fund must wait for a formal proposal to reach the chain — none has so far, even as the lockbox continues to accumulate 0.1875 ZEC with every block mined. Whether the fund sunsets in 2028 or survives in hybrid form will shape the privacy protocol's technical direction for the next five years.