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Zcash marked its tenth anniversary on October 28, 2026, with Grayscale Research highlighting a funding design that sets the privacy network apart from Bitcoin: 20% of block rewards go to ecosystem development rather than to miners. In a report published October 26, Zach Pandl, Grayscale‘s head of research, credited that steady funding stream with keeping the protocol moving through weak markets, according to Cointribune.
Grayscale is a familiar name to Zcash investors. As Cointribune noted, the asset manager launched a Zcash ETF on the US market in August, giving brokerage-account investors exposure to ZEC. Its October analysis focused on how the network pays for its own upkeep rather than on price.
Also read: Zcash Whale Doubles ZEC Holdings to $66.75M Amid 34% Drop
Key facts
- Zcash launched on October 28, 2016, and has marked its tenth anniversary this week; Grayscale’s report is dated October 26, 2026.
- Miners receive 80% of new ZEC, while 20% goes to development; 8% funds Zcash Community Grants and 12% funds a coinholder-controlled retroactive grants program.
- Sean Bowe, a Zcash cryptographer and historic contributor, proposed on October 26 redirecting the 8% grants share to the Network Sustainability Mechanism; no change has been adopted and the document has no activation date.
- Bowe’s proposal pegs ZCG’s net reserve at about $125.3 million, counting roughly 91,453 ZEC and $8.8 million in dollar-denominated assets less $2.4 million of commitments, at an assumed $1,300 per ZEC.
- The NU7 update is due around November 5 at block 3,543,405 and will cut target block times from 75 seconds to 25 seconds while preserving the 21 million ZEC cap.
A funding model that changed shape
Bitcoin miners collect the full block subsidy. Zcash has routed a fixed slice of issuance through development programs since launch, starting with a Founders’ Reward aimed at founders and early contributors. That mechanism was later restructured to favor community development, leaving the 8% and 12% split in place today.
Grayscale cites the network’s successive shielded transaction systems as evidence the money was used: Sprout in 2016, Sapling in 2018, Orchard in 2022 and Ironwood in 2026. Crypto.news reported that Ironwood activated at block height 3,428,143 on July 28, after developers identified a vulnerability in Orchard’s zero-knowledge proof circuit that could potentially have allowed undetectable counterfeit ZEC. Emergency safeguards had been deployed after the flaw was found in May, and researchers reported no evidence it was exploited.
Also read: Grayscale Files ZCSH High-Income ETF Targeting Biweekly Payouts
Crypto.news also reported that Ironwood added formal verification of supply-integrity properties and quantum-recoverable notes meant to support future recovery procedures, while noting the feature does not make Zcash quantum-resistant today. News.bitcoin summarized the same upgrade as combining quantum-recoverable addresses with formal verification.
The debate over the 8%
Bowe’s draft improvement proposal would stop the automatic 8% flow to ZCG and send those amounts to the Network Sustainability Mechanism, a reserve intended to support long-term network security. Cointribune reported that Bowe considers the community program flush with cash. His figures put ZCG about 91,453 ZEC and $8.8 million in dollar assets, against $2.4 million of commitments, for a net reserve of roughly $125.3 million at an assumed $1,300 per ZEC; the article notes the amount moves with the token price. It also says quarterly grant spending reached $1.53 million in the first quarter of 2026 and that 8% rewards could be worth more than $68 million a year under that assumed price.
Not everyone agrees on the scope. News.bitcoin reported that Josh Swihart, founder of ZODL, wants both grant programs reviewed, while Cointribune reported that other contributors worry deep cuts could weaken security and maintenance work. News.bitcoin described Bowe as a Zcash co-founder, while Cointribune described him as a cryptographer and historic contributor to the project.
Crypto.news added figures that illustrate how the funding apparatus has operated in practice. Holders approved $8.39 million across 17 of 37 proposals in the third-quarter retroactive funding round, including $1.5 million tied to researcher Taylor Hornby’s discovery of the Orchard flaw, about $1.95 million for Zcash Open Development Lab protocol work, roughly $1.2 million for ValarGroup’s Ironwood contributions, $738,942 for formal verification of Ironwood’s cryptographic circuit and $599,000 for external security audits. Crypto.news noted these are approved amounts, not necessarily completed distributions, since some payments require administrative and compliance reviews.
Why it matters
The dispute tests whether a built-in developer tax should keep running once its recipient already holds a large treasury — a question that applies to any network that pays for maintenance out of issuance. For ZEC holders, the answer shapes how much new supply flows into circulable rewards or is withheld. For miners, neither proposal touches their 80% share or the supply cap, according to the reports.
What to watch
NU7’s activation around November 5 will be the next concrete checkpoint, with the Zcash Foundation having already released Zebra 7.0.0 node software compatible with the change. Bowe’s grants proposal sits outside NU7 and would need a later protocol change. Crypto.news reported that the retroactive grants program opens its next proposal window from October 30 through November 13, with voting planned for December 17–29.
Reported by Cointribune.
Sources: Cointribune, crypto.news, Bitcoin.com News