According to Woofun AI, the Zcash community is about to face a major decision relating to the core logic of fund allocation, and holders are being asked to vote on a proposal to divest 50,000 ZEC from network reserves. This Zcash improvement proposal, co-drafted by co-founders Sean Bowe, Zooko Wilcox, and Jason McGee, was officially incorporated into the regulated warehouse this Wednesday. The core dispute is whether to sacrifice existing community subsidy reserves in exchange for a supplementary mechanism for future mining block rewards. The voting window for coin owners and community representatives has been clearly set to open on November 16 and will continue until November 30. The determination of this schedule marks that the issue has moved from the discussion stage to a substantive decision-making process. The urgency of the proposal stems from a reassessment of current reserve efficiency. The organizers are trying to find a new balance between developer funding and cybersecurity incentives, and adjustments to this balance will directly reshape the structure of Zcash's economic model.
Analyzing the funding flow of the proposal in depth, the 50,000 ZEC to be removed accounted for about 55% of the total 91,453 ZEC reserves in October. This ratio shows that the reduction is significant. The Zcash Community Grant Program (ZCG) has long relied on these reserves to fund developers, wallet projects, and various community activities. If the proposal is approved and enabled in the next network upgrade, ZCG must remove these coins from circulation within 30 days, and their value will be included in the “Network Sustainability Mechanism” reserve account set up in the recent NU7 upgrade, with the aim of gradually returning ZEC through future block rewards.
At the same time, the proposal will also eliminate ZCG's current 8% share of the equity from the newly issued ZEC. This portion of the funds will be transferred to the new “Future Development and Legal Defense Fund” until the next Zcash is halved, and no one can use the fund at the beginning, so a separate proposal is required to specify a withdrawal method. ZCG will continue to maintain remaining reserves, while the 12% independent fund controlled by currency owners will remain the same.
According to data compiled by Woofun AI, with an assumed ZEC price of $1,300 and projected expenditure for the first half of 2026, the existing reserve can cover about 13 years of expenditure, and after removing 50,000 ZEC, this period will be shortened to about 6 years. Previously, ZCG proposed converting about 98,000 ZECs into mining rewards, but it was abandoned on November 3 due to criticism. The current alternative still requires community support and the NU7.1 upgrade. The exact activation period is yet to be determined.
Behind this capital restructuring plan is a sharp rise in the value of reserves due to the increase in the price of ZEC, as well as community concerns about capital redundancy. There are calls for an end to injecting more money into reserves that are already sufficient to support multi-year subsidy needs. Under current rules, ZCG receives an 8% share of the newly issued ZEC, and its five-member committee is responsible for granting grants to independent developers, wallet builders, and community projects to support software development that stores and spends ZEC; the proposal is to stop this automatic injection; after that, ZCG can only rely on remaining reserves to maintain work, and the 50,000 ZECs to be removed will provide financial support to future miners responsible for running confirmed transactions and secure cybersecurity machines. The organizers will let the engineering team and miners move forward with a subsequent upgrade called NU7.1 after the November voting results show a “general consensus”. There is no reference implementation plan mentioned in the draft. Following NU7, Zcash is another attempt to adjust the economic incentive structure through protocol layer upgrades. The success or failure will depend on the community's final approval of the long-term sustainability path.