A Zcash governance proposal will redirect approximately $124 million, corresponding to ZEC, towards future miner rewards. However, well-known critics argue that the transfer of funds does not address the issue of who will control this money. Zcash Community Grants ( ZCG ) proposes to reduce its treasury and future allocations, while continuing a smaller stream of funds until 2032.

The proposal ZCG will transfer 36,200 units of ZEC from its treasury. The treasury currently holds approximately 91,500 units of ZEC and will transfer these funds to Network Sustainability Mechanism ( NSM ), which is a fund reserved for future miner rewards. If the proposal is approved, the committee will retain about 55,200 units of ZEC, valued at approximately 70 million US dollars at the time of writing.

The organization will also forego funding for approximately 62,000 ZEC in the future, amounting to about $78.5 million. In total, these changes will redirect about 98,000 ZEC. The remaining funds will gradually decrease and will be halved by 2032, which means that the lower level of support will be extended for four years beyond the original scheduled end of automatic funding in 2028.

Zcash Governance Proposal Sparks Controversy over Accountability

In addition to the amounts involved, critics also question how accountable the committee truly is. Helius, co-founder and CEO of Mert Mumtaz, described the proposal as "far from satisfactory" and believes that the treasury has become too large, and that ZEC holders should have a say in financial decisions.

Gemini, co-founder, said in Mumtaz that after a member of the committee unfollowed him on X, he questioned whether the committee was competent for its role. Winklevoss believes that such behavior disqualifies someone from managing $110 million. He and Cameron Winklevoss have been calling for the dissolution of ZCG and for coin holders to have greater control over expenditures.

Community developer Vini Barbosa defends the allocation of funds, stating that it is a legal way to provide funding for projects that are beneficial to the network, and compares development support with miner rewards. Tyler rejects this analogy, arguing that miners are competing at their own financial risk.

In another proposal put forward by Zcash, co-founder Sean Bowe, the 8% profit guarantee promised for the new minting of ZEC will be cancelled and instead allocated to NSM. One report states that the existing treasury will remain unchanged; however, another report from crypto.news suggests that the existing funding obligations should be fulfilled first, followed by the transfer of the remaining treasury funds into reserves.

ZCG indicates that this Zcash governance proposal is still in its preliminary stage, and the complete version will be submitted to the community for review later on.

This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.