Proposal to Withdraw 50,000 ZEC from Grants Treasury Goes to Vote from November 16 to 30
Key Facts
Zcash governance is preparing to poll coin holders and community councils on a proposal to remove 50,000 ZEC from circulation, with voting scheduled for November 16 to 30, 2026, according to CoinDesk. The amount is equivalent to about 55% of the Zcash Community Grants treasury balance, according to the proposal published on November 12. In the latest daily close available before publication, ZEC was priced at $964.38 on November 11, according to EL7 data. EL7 does not have a verified closing price for the November 12 session. The proposal puts grants funding and mining rewards under a single allocation decision, requiring the value of the withdrawn coins to be restored through future rewards rather than remain in the grants balance.
The 55% figure is based on an October snapshot of the treasury balance, when it stood at 91,453 ZEC, according to CoinDesk. The text proposes that the Zcash Community Grants committee remove the coins from circulation and add their value to a network sustainability mechanism. If the proposal is approved and activated through a network upgrade, the committee would have 30 days to remove the coins from circulation. The value would then return gradually through block rewards, according to the mechanism described in the proposal. This would change how value is allocated between the grants balance and network sustainability funding, while keeping the value directed to the system through future mining rewards.
The proposal also calls for transferring ZCG's current share, 8% of newly issued coins, to a new fund for development and legal defense through the next halving. This would change which entity receives that share, directing it to the fund instead of the existing grants allocation. The proposal sets out two funding paths: removing part of the current grants balance and restoring its value through block rewards, then transferring the share allocated from newly issued coins to the new fund. This arrangement broadens the funding question beyond a decision to reduce the treasury balance alone, as it also covers how part of future issuance will be directed. According to the text, the arrangement would continue through the period until the next halving.
The draft proposal estimates that the treasury can cover its expenses for about 13 years under the current arrangement, based on an assumed price of $1,300 per ZEC and spending in the first half of 2026. Using the same assumptions, the estimated period falls to about 6 years after the withdrawal of 50,000 ZEC. The draft ties the estimate to the stated spending level and assumed price, making it a calculation based on those assumptions. This puts the treasury's financial sustainability estimate at the center of the debate over reallocating the balance, alongside the impact of transferring the share of newly issued coins. The comparison between the two periods also gives a measure of the effect the draft expects on the grants treasury's ability to cover expenses.
The vote follows an earlier dispute over funding for the grants committee. On November 3, the committee said it would not proceed with its earlier proposal and that future funding decisions should go through the network's usual governance process, according to the Zcash Community forum. The earlier proposal called for transferring 36,200 ZEC from the committee's treasury to a network sustainability mechanism. It would also have reduced the committee's expected income through the 2028 halving from about 109,000 ZEC to 47,000 ZEC, according to CoinDesk. The proposal now up for a vote differs in size and structure: it specifies the withdrawal of 50,000 ZEC from the grants balance, along with the transfer of an 8% share of newly issued coins to a new fund.
The debate coincided with price swings in the preceding days. The Block reported that ZEC fell about 13% in trading on November 10 to $1,025, near its lowest level in two months. On the same day, shares of the ZCSH fund fell about 12% to $27.25, according to the report. The fund recorded net outflows of more than $15 million in November through November 10, following outflows of $46.25 million in October, according to The Block. On November 10, Grayscale said it intended to reinvest 100% of the sponsor fees it receives from ZCSH in Zcash network development, marketing and investor education initiatives, for up to a year from the fund's launch as an exchange-traded product. These developments provide market and institutional context for the debate, without by themselves establishing the cause of the price move.
Polls of coin holders and community councils begin on November 16 and end on November 30, according to the schedule reported by CoinDesk. The activation height at which the proposed upgrade would take effect has not been set, the report said. After the vote, organizers will assess whether the results show broad consensus before work begins on the NU7.1 upgrade. A schedule published by representatives of five organizations in the Zcash ecosystem said a summary of the results would be issued after voting closes, followed by a discussion of whether broad consensus exists. If consensus is reached, engineering teams and miners will work on the upgrade and set its timing, according to the Zcash Community forum.