Zcash co-founders Josh Swihart and Sean Bowe are engaged in a public dispute over a Bowe-fronted proposal to cut off and reroute the 8% block reward pipeline that funds the Zcash Community Grants (ZCG) program.
Bowe wants the reward slice to feed a network reserve instead.
Why Bowe wants to “turn off” the ZCG stream
Bowe argued in a Zcash Improvement Proposal draft shared October 26 on GitHub that the ZCG program already has deep enough reserves to continue operating without receiving its customary 8% cut of every block reward.
“It’s time to turn off the ZCG funding stream,” wrote Bowe on X as he announced the proposal. He continued that “ZCG has over $125M in funding, and will receive millions more before the spigot is turned off. The program was never designed to handle this amount of funding.”
Instead, Bowe proposes sending the 8% allocation to the Network Sustainability Mechanism, a protocol reserve that removes ZEC tokens from circulation and later reissues them as block rewards.
Per the ZCG’s public dashboard cited in Bowe’s draft proposal, the reserve holds 91,452.98 ZEC and about $8.8 million in dollar-denominated assets. Bowe also noted about $2.4 million in outstanding grant commitments.
The $125.3 million estimate, based on a $1,300 per ZEC price, means the committee has enough funds to cover grants for more than ten years, assuming $10 million in annual commitments.
Bowe’s plan did not touch the Grants Committee reserves or the separate 12% allocation to the Coinholder-Controlled Fund. If approved, the proposal, which is not part of the pending NU7 upgrade, would need a network upgrade to go live.
Why Swihart disagrees
Co-founder Josh Swihart shared his disapproval of the plan publicly via X, writing that it would “be a mistake to kill only one part of the dev fund.” Swihart, who is also the founder of Zcash Open Development Lab, added that “If dissolved, then no half measures, dissolve it all, both the ZCG and coinholder streams. The coinholder stream accrues ~216 ZEC a day until the halving. Same problem.”
Instead of potentially causing division and market uncertainty by specifically targeting the ZCG, Swihart is arguing for both funding streams to flow to the NSM, at least until the next halving. In the meantime, already approved grants would be honored, per the co-founder.
Swihart also floated a one-time, coinholder-voted legal defense fund for Zcash developers.
In a full shutdown scenario, ZODL would lose the funding source of a retroactive coinholder grant for protocol work that it recently landed. Swihart admitted to that conflict.
In the Zcash community forum, Swihart said he had drafted his own ZIP to end the entire development fund.
Why miners come out ahead in the meantime
The NSM does not begin paying out until February 2031, and current funding streams expire before then. Developer Daira-Emma Hopwood, posting as str4d on the community forum, spelled out the consequence: ending ZCG without a replacement development stream “is a decision to explicitly give more money to miners by decreasing the funding available for development and maintenance of the chain.”
Directing the share to the NSM, str4d noted, still “amounts to (for now) directing funds to miners and away from development.”
The push is not happening in a vacuum. A separate forum proposal to end ZCG and send its funds to the NSM came from Maxime Desalle, who disclosed he is “actively involved with Cypherpunk, the world’s largest Zcash miner.”
In September, Dragonfly managing partner Haseeb Qureshi called for winding down the dev fund after it expires in 2028, warning it risks being “politicized” as it nears $100 million.
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