Zcash Marks 10 Years With 20% of Block Rewards Funding Development

Zcash marked its 10th anniversary Wednesday with a funding structure that sends 20% of block rewards to development, a model now facing a draft proposal to redirect one of its funding streams.

The current arrangement allocates 20% of block rewards to ecosystem development, with 80% going to miners. That 20% portion was once called the Founders Reward; it now supports two distinct grant channels.

“One important reason behind this continuous innovation has been the protocol’s consistent financial support for R&D,” said Zach Pandl, head of research at Grayscale.

Zcash’s privacy-pool sequence includes Sprout, Sapling in 2018, Orchard in 2022 and Ironwood in 2026. The anniversary fell Oct. 28, 10 years after the network’s launch in October 2016.

Under the current split, Zcash Community Grants receives an automatic 8% share of block subsidies. The Coinholder-Controlled Fund receives the other 12%, and coinholders vote quarterly on grant applications through that channel. The draft targets the automatic ZCG stream alone.

A separate draft funding proposal from Zcash developer Sean Bowe would end ZCG’s automatic allocation and direct that share to the Network Sustainability Mechanism for the remainder of the funding stream’s current term. The mechanism is a protocol-defined reserve intended to support the network over time.

Bowe wrote in the draft, “ZCG has accumulated sufficient resources to continue its grant-making role without an automatic share of each block subsidy.” The proposal would leave ZCG’s existing assets untouched and keep the separate 12% allocation unchanged.

No activation block or reference implementation has been assigned to the proposal, and NU7’s current specification does not include it. Zcash’s existing funding rules therefore remain unchanged.