Grayscale is making the case that Zcash’s most underrated feature isn’t its privacy tech. It’s the paycheck.
The asset manager says Zcash’s practice of routing 20% of block rewards to developers has supported a decade of innovation on the network.
How the money moves
Every time a new block is mined on Zcash, freshly created ZEC gets distributed. Under the structure Grayscale highlights, miners keep 80% of block rewards. The remaining 20% is set aside for development and ecosystem work.
That 20% is further divided. According to the research findings, 8% of rewards goes to community grants, while 12% flows into a development fund lockbox.
The lockbox is the interesting part. Funds accumulate there rather than being handed straight to a single team, which means the money sits in reserve until the community decides how to deploy it.
Grayscale’s October 2026 report frames this protocol-level funding as the foundation for nearly a decade of advances in privacy technology.
A funding model with history
Zcash launched in October 2016 with ecosystem financing baked in from day one.
The original version was called the Founders’ Reward, which also took 20% of block rewards. That arrangement ended with the Canopy upgrade in November 2020, when the network shifted to a development fund model.
So the percentage stayed the same, but the recipients and the governance around them changed.
The upgrade on deck
Grayscale’s endorsement lands as Zcash heads toward its next major network change. The NU7 upgrade is slated for November 5, 2026.
NU7 aims to cut the block interval from 75 seconds to 25 seconds. In practical terms, transactions would get confirmed roughly three times as often.
Market mood: mixed signals
The price action has been less enthusiastic than the commentary. ZEC declined approximately 25% throughout October, according to the research findings.
Institutional money tells a different story. Grayscale’s Zcash Trust saw $41.09 million in net inflows, which the research points to as a sign of renewed institutional interest in the asset.
It is also worth remembering who is doing the talking. Grayscale runs the Zcash Trust, so the firm has a direct interest in the asset attracting attention and capital.
What this means
For investors, the funding model cuts both ways. The 20% allocation means a portion of new supply goes somewhere other than miners, which shapes the economics of securing the network.
The 12% lockbox adds another layer to watch. How those accumulated funds eventually get distributed, and who gets a say, will likely shape how the market perceives Zcash’s governance going forward.
The near-term test is NU7. If the upgrade arrives as planned on November 5, 2026, and delivers the promised drop to 25-second blocks, it becomes a concrete example of the funding model doing its job.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.