Zcash faces a crucial vote: 50,000 ZEC at stake

The Zcash (ZEC) cryptocurrency is facing an important decision. Next week, a vote will begin on a proposal to withdraw 50,000 ZEC from a fund for developers. That is approximately 55 percent of the current reserves. The plan is intended to radically change the funding of the network.

The proposal comes from Zcash co-founders Sean Bowe and Zooko Wilcox, along with Jason McGee. From November 16 to 30, ZEC holders and community representatives will have the opportunity to voice their opinions on the plan.

The Zcash Community Grants (ZCG) fund is central to this. This fund is used to pay developers, crypto wallets, and other projects within the Zcash network, among others.

According to October figures, the fund holds approximately 91,453 ZEC. The initiators want to withdraw 50,000 ZEC from it.

The cryptocurrencies are not destroyed but placed in a special network reserve. From there, they gradually return as rewards for miners, who process transactions and secure the network.

Before this can happen, the proposal must receive sufficient support and be implemented through a network update.

The plan goes beyond moving existing cryptocurrencies. Currently, ZCG automatically receives eight percent of all newly created ZEC. That money is used to fund the development of the network.

That fixed source of income would disappear. From now on, the eight percent share will go to a new fund for future development and legal protection.

For the time being, that money remains fixed. At a later stage, a separate proposal will have to determine when and for what purpose it may be used.

In the meantime, ZCG can continue to use its remaining reserves for developers and other projects. Another fund, over which ZEC holders have control, remains outside the proposal.

According to the initiators, ZCG has sufficient funds for the time being. Assuming a ZEC price of $1,300, the fund could last for about thirteen more years without any changes. After removing 50,000 ZEC, an estimated six years remain.

This calculation is highly dependent on the future ZEC price and actual expenditure.

Within the Zcash community, there has long been discussion about the large reserves of the development fund. Due to previous price increases, their value has risen significantly, while new ZEC continues to flow in automatically.

A more far-reaching proposal was already on the table at the beginning of November. Under this proposal, approximately 98,000 ZEC would be allocated to future rewards for miners.

That plan was withdrawn on November 3 following criticism from the community. The new proposal, which involves moving 50,000 ZEC, is intended to provide an alternative.

If the vote garners sufficient support, developers can begin preparing Network Upgrade NU7.1.

The exact date of this update has not yet been announced. The final technical details have yet to be published.