Key Takeaways
- • Zcash marks its tenth anniversary on October 28, 2026, with 20% of block rewards funding development, while miners keep 80% of new ZEC, according to Cointribune's review of Grayscale research.
- • Grayscale head of research Zach Pandl credits the regular developer funding with sustaining network upgrades through market downturns, citing the Sprout, Sapling, Orchard and Ironwood generations of privacy technology.
- • Developer Sean Bowe has proposed removing the 8% allocated to Zcash Community Grants and redirecting it to the Network Sustainability Mechanism, arguing the ZCG's net reserve of about $125.3 million is already sufficient.
- • The NU7 upgrade, expected around November 5, 2026 at block 3,543,405, will cut target block time from 75 to 25 seconds while preserving the emission schedule and 21 million unit supply cap.
- • Bowe's proposal has no activation date and is not included in NU7, and other developers such as Josh Swihart of ZODL want to review both funding programs.
Summary
Zcash celebrates its tenth anniversary on October 28, 2026, with a funding model that differs from Bitcoin's. According to Cointribune, the network directs 20% of block rewards to development and research, while miners retain 80% of newly issued ZEC. In an analysis published October 26, Zach Pandl, head of research at Grayscale, highlighted this mechanism as a factor in the network's longevity. Grayscale launched a Zcash ETF on the US market in August, giving investors exposure to ZEC through a brokerage account.
The 20% allocation is currently split between two programs. Zcash Community Grants (ZCG) receives 8% of total rewards to fund technical projects and ecosystem tools, while the remaining 12% feeds a mechanism controlled by ZEC holders. The structure has evolved since 2016, when the network used a Founders' Reward oriented toward founders and early contributors. Grayscale argues that this steady funding has enabled continued improvements through successive privacy upgrades, including Sprout (2016), Sapling (2018), Orchard (2022) and Ironwood (2026).
The funding model is now contested. On October 26, cryptographer and historic contributor Sean Bowe proposed removing the 8% ZCG allocation and transferring it to the Network Sustainability Mechanism, a reserve intended to support long-term network security. Per figures in his proposal, ZCG holds about 91,453 ZEC and $8.8 million in dollar-denominated assets, less $2.4 million in commitments, for a net reserve of roughly $125.3 million at an assumed price of $1,300 per ZEC. Bowe also cited first-quarter 2026 grant expenses of $1.53 million. The reserve figure varies with token price. Josh Swihart, founder of ZODL, has called for reviewing both programs, while other contributors warn that deep cuts could weaken security and maintenance work. No changes have been adopted, and Bowe's proposal remains a working document without an activation date.
The anniversary follows a significant technical year. In July, the network activated Ironwood, which addressed a vulnerability in Orchard that carried a risk of unauthorized ZEC creation and required an emergency fix. Ironwood also adds cryptographic guarantees and mechanisms to aid fund recovery in certain quantum-computing scenarios. The next milestone is the NU7 upgrade, expected around November 5 at block 3,543,405, which will reduce target block time from 75 to 25 seconds. Block rewards will be adjusted so that issuance and the 21 million unit cap are unaffected. NU7 also temporarily removes 60% of transaction fees from circulation, with progressive reintroduction planned from February 2031. The Zcash Foundation has released Zebra 7.0.0, a node software version compatible with the upgrade. Bowe's grant proposal is not part of NU7 and would require a separate protocol modification.
The 20% allocation is currently split between two programs. Zcash Community Grants (ZCG) receives 8% of total rewards to fund technical projects and ecosystem tools, while the remaining 12% feeds a mechanism controlled by ZEC holders. The structure has evolved since 2016, when the network used a Founders' Reward oriented toward founders and early contributors. Grayscale argues that this steady funding has enabled continued improvements through successive privacy upgrades, including Sprout (2016), Sapling (2018), Orchard (2022) and Ironwood (2026).
The funding model is now contested. On October 26, cryptographer and historic contributor Sean Bowe proposed removing the 8% ZCG allocation and transferring it to the Network Sustainability Mechanism, a reserve intended to support long-term network security. Per figures in his proposal, ZCG holds about 91,453 ZEC and $8.8 million in dollar-denominated assets, less $2.4 million in commitments, for a net reserve of roughly $125.3 million at an assumed price of $1,300 per ZEC. Bowe also cited first-quarter 2026 grant expenses of $1.53 million. The reserve figure varies with token price. Josh Swihart, founder of ZODL, has called for reviewing both programs, while other contributors warn that deep cuts could weaken security and maintenance work. No changes have been adopted, and Bowe's proposal remains a working document without an activation date.
The anniversary follows a significant technical year. In July, the network activated Ironwood, which addressed a vulnerability in Orchard that carried a risk of unauthorized ZEC creation and required an emergency fix. Ironwood also adds cryptographic guarantees and mechanisms to aid fund recovery in certain quantum-computing scenarios. The next milestone is the NU7 upgrade, expected around November 5 at block 3,543,405, which will reduce target block time from 75 to 25 seconds. Block rewards will be adjusted so that issuance and the 21 million unit cap are unaffected. NU7 also temporarily removes 60% of transaction fees from circulation, with progressive reintroduction planned from February 2031. The Zcash Foundation has released Zebra 7.0.0, a node software version compatible with the upgrade. Bowe's grant proposal is not part of NU7 and would require a separate protocol modification.
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