Zcash's $125 million grants fight: ZCG offers $46 million back as Winklevoss pushes coinholder control
Key Takeaways
- •The ZCG committee proposed transferring 36,200 ZEC, worth about $46 million, from its roughly 91,500-ZEC treasury into the Network Sustainability Mechanism, while conceding its 8% block-reward allocation exceeds its needs.
- •Beyond the immediate transfer, the committee committed a further 62,000 ZEC ($78.5 million) in future funding and plans to taper remaining funds until the 2032 halving, directing roughly $124 million in total to miners through the NSM.
- •The controversy grew after ZEC's price multiplied 48-fold over three years, inflating the treasury's value, and the Financial Privacy Foundation reported ZCG spent only $1.53 million in the first quarter of 2026.
- •Helius co-founder Mert Mumtaz and Gemini co-founder Tyler Winklevoss rejected the refund plan as inadequate and argued spending should be accountable to ZEC holders rather than an unelected committee, while Haseeb Qureshi and Matt Huang favored an elected council over a token-weighted vote that would favor the largest wallets.
- •Under current rules, ZCG receives 8% of block rewards through at least 2028, while the Coinholder-Controlled Fund receives 12% and is directed by token holders through quarterly votes.
The five-person Zcash Community Grants (ZCG) committee is under fire for planning to return only $46 million of the roughly $125 million in its treasury, a sum critics say is far too small.
The fight over the 8% allocation of block rewards flowing into the treasury intensified after ZEC's price multiplied 48-fold over the past three years, causing the funds to balloon in value. The Zcash community has still not reached consensus on the best path for rerouting the money. One popular proposal would hand control to coinholders, but it has its detractors, who note that the people pushing the idea also stand to gain the most from concentrating power in the hands of the largest ZEC holders.
What solution did the ZCG propose?
In a Zcash community forum post, the ZCG committee proposed moving 36,200 ZEC, worth about $46 million, from its roughly 91,500-ZEC treasury into the Network Sustainability Mechanism (NSM), while conceding that the 8% allocation it currently receives is more than it needs. The Financial Privacy Foundation reported that ZCG spent just $1.53 million in the first quarter of 2026.
The NSM is a protocol reserve that temporarily removes ZEC tokens from circulation and later pays them out to miners over decades. The committee has committed a further 62,000 ZEC ($78.5 million) in future funding and plans to keep tapering the remaining funds until the 2032 Zcash halving event. The current 8% allocation to the ZCG treasury runs until at least 2028. Taken together, the ZCG's plan to channel ZEC into the NSM would amount to 98,000 ZEC, about $124 million, in future rewards for miners.
Why the Zcash community is fighting over $125 million
Under present rules, ZCG receives 8% of block rewards while the Coinholder-Controlled Fund receives 12%. The former is governed by the five-person committee, while token holders vote on the latter every quarter. In practice, holders already direct the larger 12% share through those quarterly votes; the unresolved question is the committee's 8% — and, with winding-down proposals on the table, whether that stream continues past 2028 at all.
The dispute centers on the nearly $125 million figure cited by Zcash co-founder Sean Bowe, who quoted the ZCG's public dashboard. It lists 91,452.98 ZEC and about $8.8 million in dollar-denominated assets against $2.4 million in outstanding grant commitments.
With that much money at stake, the Zcash community is facing competing proposals pushing to send the funds in different directions.
Helius co-founder Mert Mumtaz dismissed the refund plan as “nowhere near good enough” on X, calling the treasury “gargantuan” and arguing that spending should answer to ZEC holders rather than a committee they had no hand in picking. Gemini co-founder Tyler Winklevoss backed Mumtaz on Friday, saying that anyone who “can’t even take a little scrutiny” was “not qualified to run 110 million dollars with no accountability.” Winklevoss's response came after the Helius co-founder posted that a committee member had unfollowed him.
Direct holder control has skeptics inside the industry as well. A token-weighted vote favors the largest wallets, and several of the people demanding the change are among the biggest stakeholders. Dragonfly managing partner Haseeb Qureshi, who in September called for winding down the dev fund after it expires in 2028, argued against letting ZEC holders vote directly on allocations. Paradigm co-founder Matt Huang argued the same position. Both favored some form of elected council over a raw coin vote.
Maxime Desalle, an investor at Winklevoss Capital who has disclosed he is “actively involved with Cypherpunk, the world’s largest Zcash miner,” wants ZCG abolished outright.
The current fight follows Bowe's narrower October 26 proposal to switch off the 8% stream and divert it to the NSM while leaving the ZCG's treasury untouched, a plan that split Zcash's own co-founders. Whichever structure the community eventually settles on would govern flows built for the long run: the 8% allocation is committed only through at least 2028, ZCG's tapering plan extends to the 2032 halving, and NSM payouts are designed to reach miners over decades.
