Zcash holders will begin voting next week on a proposal to remove 50,000 $ZEC — worth roughly $50 million — from the privacy-focused network's grants treasury and return its value through future mining rewards.

The draft Zcash Improvement Proposal, written by co-founders Sean Bowe and Zooko Wilcox alongside Jason McGee, was merged into the specifications repository on Wednesday. Improvement Proposals are the formal documents through which Zcash specifies protocol changes, so the merge places the draft in the network's canonical proposal set ahead of coinholder polling. Polls for coinholders and community panels open Nov. 16 and run through Nov. 30.

The proposed removal represents about 55% of the 91,453 $ZEC recorded in an October treasury snapshot cited by the draft. Zcash Community Grants (ZCG) uses that treasury to fund developers, wallets and community projects.

If adopted and activated in a network upgrade — the scheduled process Zcash uses to introduce new consensus rules — the plan would require ZCG to remove the coins from circulation within 30 days. Their value would be credited to the Network Sustainability Mechanism, a reserve activated under the recent NU7 upgrade that gradually returns $ZEC through future block rewards.

The proposal would also stop ZCG from receiving its current 8% share of newly created $ZEC. That allocation would instead accumulate in a new Future Dev and Legal Defense Fund until Zcash's next halving, the pre-scheduled event that cuts the rate of new coin issuance.

Nobody could spend from the new fund initially; a separate proposal would have to establish how withdrawals work. ZCG would keep its remaining treasury and continue awarding grants, while the separate 12% Coinholder-Controlled Fund would remain unchanged.

Why the Vote Takes Place

Zcash pays for part of its development with newly created coins. ZCG receives 8% of that issuance, and its five-member committee awards grants to independent developers, wallet builders and community projects.

Those grants help pay for the software people use to hold and spend $ZEC. Ending the automatic funding would leave ZCG drawing on its remaining treasury to support that work. The proposed removal of 50,000 $ZEC, meanwhile, would help fund future miners, who run the machines that confirm transactions and secure the network.

$ZEC's rally made the committee's existing coins worth considerably more while new funding continued to arrive, prompting calls to stop adding to a treasury already large enough to cover years of grants.

Using the October treasury snapshot, an assumed $ZEC price of $1,300 and spending from the first half of 2026, the draft estimates ZCG could cover about 13 years of expenses. Removing 50,000 $ZEC would leave roughly six years under those assumptions.

Attention now turns to the Nov. 16–30 polling window, when coinholders weigh the treasury removal and the end of ZCG's automatic 8% allocation — the outcomes that would determine whether the changes proceed toward activation in a network upgrade.

Source: CoinDesk