Zcash’s $125 million funding fight widens as Tyler Winklevoss calls to end its ‘USAID’

Zcash faces competing proposals to scrap or extend developer subsidies as growing investor interest swells the privacy network's funding reserves.

The debate intensified after Zcash co-founder Sean Bowe proposed ending automatic payments to Zcash Community Grants (ZCG), arguing that the program already controls enough resources to finance years of development without additional subsidies.

His proposal has drawn more aggressive demands from ZODL founder Josh Swihart, Gemini co-founder Tyler Winklevoss, and other ecosystem participants, while a rival plan would preserve reduced development funding until 2036.

The disagreement comes as Zcash approaches its 10th anniversary on Oct. 28, with renewed institutional interest and rising private transaction activity increasing scrutiny of how the network allocates newly created ZEC.

In an Oct. 26 draft proposal, Bowe called for redirecting ZCG's 8% share of block rewards into the Network Sustainability Mechanism (NSM), a protocol reserve that would eventually support future block rewards. Bowe said on X:

“It's time to turn off the ZCG funding stream.”

He added that ZCG has more than $125 million in funding and would receive millions more before the proposed cutoff, arguing that the program was never designed to manage such substantial resources.

The figure is based on approximately 91,453 ZEC, $8.8 million in dollar-denominated assets, and $2.4 million in outstanding obligations, assuming ZEC trades at $1,300.

At that valuation, ZCG's annual allocation would be worth approximately $68.3 million, compared with $6.12 million in annualized expenses based on its first-quarter spending.

Bowe's proposal would preserve the program's existing assets and leave the separate 12% coinholder-controlled funding stream untouched.

However, Maxime Desalle proposed going further by dissolving ZCG entirely, stopping new grant approvals and transferring its remaining treasury to the NSM after fulfilling existing commitments.

Desalle argued that ZCG's governance structure lets a small community advisory panel influence spending despite the wider economic costs borne by ZEC holders.

He also disclosed his involvement with Cypherpunk, a major Zcash mining company, through his work, while maintaining that the proposal was independent of his employment.

Bowe later said he would personally support considering transferring ZCG's existing treasury, though he preferred to separate that decision from his proposal to stop future payments.

The dispute has expanded beyond ZCG's future.

Tyler Winklevoss endorsed ending the grants arrangement, declaring, “It's time to end the USAID of Zcash.”

Swihart, meanwhile, argued that eliminating only ZCG's allocation would leave the underlying controversy unresolved. He said:

“It'd be a mistake to kill only one part of the dev fund. If dissolved, then no half measures, dissolve it all, both the ZCG and coinholder streams.”

Swihart pointed out that the coinholder-controlled program receives approximately 216 ZEC daily, creating a similar accumulation problem as the cryptocurrency appreciates.

He proposed eliminating both funding streams and redirecting their allocations to the NSM, honoring existing grant obligations before transferring remaining eligible funds.

Swihart also suggested a one-time, coinholder-approved legal defense endowment for Zcash developers. He said: