# Zcash Co-Founder Proposes Ending ZCG's 8% Block Reward Share

*Author: David Christopher*
*Published: Oct 27, 2026*
*Source: https://www.bankless.com/read/news/zcash-co-founder-proposes-ending-zcg-s-8-block-reward-share*

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Zcash co-founder Sean Bowe has proposed ending the Zcash Community Grants (ZCG) funding stream, which gets 8% of each block's new ZEC, and sending that share to the Network Sustainability Mechanism (NSM). [Bowe says](https://x.com/ebfull/status/2114911107718742451) ZCG "has over $125M in funding, and will receive millions more before the spigot is turned off." 

## What's the Scoop?

- **What Changes:** [Bowe's draft ZIP](https://github.com/zcash/zips/blob/end-zcg-stream/zips/draft-bowe-end-zcg-stream.md) stops the 8% payments to [ZCG, the five-member committee](https://zips.z.cash/zip-1015) selected by a community advisory panel to fund Zcash ecosystem grants, and redirects that share to the NSM through the stream's scheduled end at the third halving. Bowe says ZCG's existing treasury, roughly $125M by his estimate, is enough to keep funding grants. The separate 12% Coinholder-Controlled Fund stream is unchanged. 

- **What's the NSM?:** It's a protocol-level reserve that takes ZEC out of circulation and [gradually reissues it through future block rewards](https://zips.z.cash/zip-0237), to help fund network security as scheduled issuance winds down. Once NU7 activates, [60% of each block's transaction fees](https://zips.z.cash/zip-0235) will flow into it instead of to miners, and Bowe's proposal would add the redirected 8%. Reissuance is [slated to start in 2031](https://www.bankless.com/read/news/zcash-sets-its-sights-on-next-major-network-upgrade). 

- **What's the Coinholder-Controlled Fund?:** It's the pool fed by a separate 12% slice of each block's new ZEC under [ZIP 1016](https://zips.z.cash/zip-1016). ZEC holders vote on grant proposals each quarter, and [three key-holder organizations](https://zips.z.cash/zip-0271) (the Zcash Foundation, Electric Coin Company and Shielded Labs) hold the keys and sign off on payouts. ZCG's 8%, by contrast, is spent at its committee's discretion. 

- **Early Pushback:** The idea is already contested on [the Zcash forum](https://forum.zcashcommunity.com/t/end-zcg-and-send-its-funds-to-the-nsm/58515). Zcash Open Development Lab founder Josh Swihart says [it'd be "a mistake to kill only one part of the dev fund"](https://x.com/jswihart/status/2114943225937232107) and wants the coinholder stream dissolved too. The forum thread also floats sweeping ZCG's remaining treasury into the NSM, which Bowe says he'd back but wants handled separately. 

- **What's Next:** It's a draft with no activation height and isn't part of NU7. [NU7](https://www.bankless.com/read/news/zcash-sets-its-sights-on-next-major-network-upgrade), expected around Nov. 5, adds the NSM and also [freezes any ZEC left in Sprout](https://www.bankless.com/read/news/zcash-sprout-holders-have-two-weeks-to-move-their-zec), Zcash's original shielded pool, so ZCG's share would only start flowing to the NSM after a later upgrade.
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