Zcash Community Grants, or ZCG, has posted a preliminary treasury restructuring idea on the official Zcash forum that would move about 36,200 ZEC into the Network Sustainability Mechanism, or NSM, and give up roughly 62,000 ZEC in future grant allocations. Taken together, the plan would redirect about 98,000 ZEC from development funding to future mining rewards.
The outline was published at around 9:34 p.m. Taipei time on Oct. 29. In the post, ZCG said the current 8% share of block rewards allocated to the grants body is "more than it can spend," and said it wants to cut its own funding and send excess ZEC toward future block rewards instead.
ZCG said the document is only an initial concept and has not yet been written into a full proposal. It would still need to go through Zcash’s standard governance process, and the committee said details on the figures and any consensus changes would be added in a later formal version.
Treasury transfer and lower future allocations
According to the committee, the ZCG treasury currently holds about 91,500 ZEC. Under the current idea, around 36,200 ZEC would be transferred into NSM and reserved for future mining rewards, while ZCG would retain about 55,200 ZEC to continue grant operations.
The second part of the change would hit future income. Under the current rules, ZCG would receive about 109,000 ZEC before the 2028 halving. Under a taper model, that amount would fall to about 47,000 ZEC, meaning the committee would give up around 62,000 ZEC in future funding.
The remaining allocation would then decline by about 3% per month until grant funding ends at the 2032 block reward halving.
On those numbers, about 98,000 ZEC in total would be shifted from development grants to future block rewards for miners.
Miners keep 80% now, NSM acts as a long-term reserve
The committee framed the idea around keeping the combined 20% share for development and grants unchanged, while tapering the grant side and filling NSM with the freed-up portion. Miners’ current 80% share would stay the same.
In plain terms, ZCG described NSM as a protocol-level sustainability reserve. Some ZEC would be locked up and temporarily removed from circulation, then paid out slowly to miners over time to help support network security after future halvings.
The committee said ZEC moved into NSM would leave circulation for a period and then be distributed gradually to miners over decades.
The mechanism itself would not be newly created. It would use the NSM already defined in ZIP 237. ZCG also said token holders showed about 96.6% support for the mechanism in September. The committee listed several items that would remain unchanged: the 21 million ZEC supply cap, the halving schedule, and an issuance path that does not exceed the current one.
Forum reaction split over accountability and ZCG’s future
Reaction on the forum quickly split in two directions. Some users said the proposal points in the right direction and could serve as a middle-ground option. Critics said the issue is not simply taking less money, but a lack of accountability, and some argued that ZCG should be abolished altogether.
Others pointed to disputes around grants tied to ZSA and questioned whether the committee is actually responding to token holder preferences.
CoinTelegraph also covered the governance backlash, focusing on the roughly 98,000 ZEC restructuring figure, echoing the polarized tone seen on the forum.
If adopted, grant capacity would shrink
If the idea becomes a formal proposal and passes the required consensus changes, ZCG’s automatic inflows would drop sharply, while the excess treasury position would move into NSM. Under the current outline, that would trade some short-term development funding capacity for a larger long-term buffer for miner rewards after future halvings.
For miners, the current payout split would not change, but the protocol reserve available after halving events would become larger. For grant applicants, the pool of funds available in the future would be smaller and the pace of distribution would slow.
The debate in Zcash governance has now moved beyond whether to shut off the funding valve and toward how much to cut, how to cut it, and where the money should go. In this round, ZCG chose to propose shrinking its own allocation and locking the difference into NSM as a response to criticism that the grants system has more funding than it needs.
