This week, the crypto community has been actively discussing a major initiative by Zcash co-founders ($ZEC ) Zooko Wilcox and Sean Bowe. A draft proposal has appeared online to withdraw 50,000 ZEC (about $50 million at the current price of around $1,000) from the community grants treasury.
Many traders read the headlines and immediately assumed the coins would simply be “burned,” instantly driving the price up. But when you look at the proposal, the mechanics turn out to be much more interesting. Let’s break down what will actually happen to these coins—and how it will affect the price of $ZEC —without getting into complicated theory. 👇
Where do the coins come from, and what is the grants treasury? 🏦
In Zcash, a portion of the new coins from each block is allocated to the Zcash Community Grants (ZCG) fund. These funds pay for the work of independent developers, wallets, and ecosystem projects.
Amid the powerful rally $ZEC in 2026, the dollar value of this fund grew so much that its current reserves (around 91,453 ZEC) would be enough to fund 13 years of operations. This sparked debate in the community: why keep accumulating huge reserves that could potentially put pressure on the market?
Burn or reallocation: where will the 50,000 ZEC actually go? 🔄
If the proposal is approved, ZCG must remove 50,000 ZEC (approximately 55% of its balance) from circulation within 30 days of the network upgrade. But this is not a conventional burn to a “dead” address:
• Return to the miners’ reserve: The withdrawn coins will be credited to a special Network Sustainability Mechanism, launched in the recent NU7 upgrade. From there, they will return to the network very slowly through future miner rewards.
• Ending the 8% tax: The grants fund will lose its current 8% share of newly issued coins. These allocations will be redirected to a new Future Development and Legal Defense Fund, where they will be frozen until the next halving.
• Reduced financial runway: The ZCG coins remaining in the treasury will be enough to fund developers for about 6 years.
Remember: The main effect on the price here is not the immediate destruction of coins (50,000 ZEC is about 0.29% of the total supply), but a reduced risk of future sell-offs by the grants fund. The coins are being taken out of the committee’s control and their return to the market is being stretched out over many years.
When can we expect a resolution? The initiative has not yet been approved окончательно — it still has two important stages to go through:
Option A: Community vote (November 16–30). Coin holders and community panels will vote on this proposal over the next two weeks.
Option B: NU7.1 hard fork. If the community supports the plan, developers will need to carry out a technical NU7.1 network upgrade. No exact date has been set yet.
A question for the community
What do you think of this move by Zcash’s creators — is removing an extra $50 million from the treasury the right decision to protect the price, or will cutting the grants budget slow the ecosystem’s development? Share your thoughts in the comments! 👇@Cryptoland_88
⚠️ Disclaimer: This content is for informational and educational purposes only and does not constitute personalized investment advice, financial advice, or a recommendation to buy or sell any assets. The cryptocurrency market involves a high level of risk and volatility. Always do your own research (DYOR) before making any investment decisions.