Zcash Grants Group Proposes Redirecting $124 Million in Funding to Mining Rewards; Industry Criticizes Plan

Zcash Community Grants, or ZCG, a support organization for the Zcash ecosystem, has proposed redirecting about $124 million in grant funding into mining rewards. The plan has drawn criticism from industry figures over how the grants are allocated and how transparently the funds are managed.

Cointelegraph reported on October 30 that ZCG proposed transferring 36,200 ZEC, worth about $46 million, from its holdings of roughly 91,500 ZEC into the Network Sustainability Mechanism, or NSM. The NSM is a system that sets aside Zcash for future mining rewards.

ZCG also plans to give up roughly 62,000 ZEC, worth about $78.5 million, that it was slated to receive in the future, and to gradually reduce grant funding through the 2032 halving. In total, the group plans to redirect about 98,000 ZEC from existing holdings and future grants into mining rewards.

Industry reaction was negative. Mert Mumtaz, co-founder and chief executive officer of Helius, said the proposal was far from sufficient, criticizing ZCG for holding too much capital and arguing that it should be accountable to Zcash holders for how it distributes the funds.

Tyler Winklevoss, co-founder of Gemini, also questioned how ZCG manages its grant funding.

ZCG said the measure remains at the preliminary proposal stage and that it plans to release a formal proposal for community review later.