Three prominent Zcash ecosystem figures have released a compromise proposal to resolve network governance disputes. Zcash co-founder Zooko Wilcox, alongside Sean Bowe of Tachyon Group and Jason McGee of Shielded Labs, posted a draft Zcash Improvement Proposal (ZIP) on Oct. 29-30, 2026. The compromise draft centers on two main agendas: trimming Zcash Community Grants (ZCG) treasury reserves and halting recurring funding streams to the grant organization.
The move does not destroy coins, but rather restructures protocol reserve funds to support future block subsidy issuance.
Where the 50,000 ZEC Will Go
Under the draft ZIP, the Financial Privacy Foundation is required to send 50,000 ZEC to an unspendable address no later than 30 days after community approval. The 50,000 ZEC donation is valued at approximately $65 million, based on price benchmarks in the draft balance sheet as of Oct. 26, 2026.
The 50,000 ZEC donation is not permanently destroyed, but enters the Network Sustainability Mechanism (NSM) balance to bolster future block subsidy issuance. The asset transfer process does not require a network upgrade, allowing it to proceed as soon as the community grants approval.
The Fate of Grant Reserves Without the 8% Block Subsidy
The compromise draft also proposes halting the 8% block subsidy that has automatically funded ZCG from every new block. The 8% stream would be redirected to the Future Dev and Legal Defense Fund Lockbox at the protocol level. This holding pool operates without custodians or withdrawal keys until a subsequent ZIP governs its use.
The 12% allocation for the Coinholder-Controlled Fund and the Deferred Dev Fund Lockbox remains unchanged and will continue as before.
ZCG itself held reserves of 91,452.98 ZEC and approximately $8.8 million in cash as of Oct. 26, with ongoing grant liabilities of roughly $2.4 million. Assuming an annual burn rate of around $9.4 million, ZCG’s remaining funds following the 50,000 ZEC donation are estimated to cover grant operations for the next 6.4 years.
Consensus Test Following NU7
From a technical implementation standpoint, transferring the 50,000 ZEC donation does not require a network upgrade. However, redirecting the block subsidy stream to the NSM requires fresh consensus in a network upgrade following Network Upgrade 7 (NU7).
For ZEC holders, the compromise draft offers treasury certainty without continually burdening new coin issuance through recurring block subsidies. The final decision now rests with the Zcash community to determine whether the proposal is ratified in a vote.
Reported by crypto.news.
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