Zcash Funding & Governance Overview
Zcash's on-chain funding model, block-reward mechanics, and the roles of the major organizations
1. How Zcash Block Rewards Work
Zcash is a Proof-of-Work cryptocurrency. Every block mined distributes its block subsidy (the newly created ZEC) plus transaction fees according to a fixed protocol rule set by network upgrades.
- Current model (post-NU6 / November 2024 onward)
As of April 2026 the distribution is:
| Recipient | Percentage | What it funds / status |
|---|
| Miners | 80% | Direct block reward to miners |
| Zcash Community Grants (ZCG) | 8% | Community grants (continues through ~2028) |
| Lockbox (protocol-controlled) | 12% | Funds accumulate; no spending mechanism yet; future community vote required |
This 20% "dev fund" was replaced by the 8% ZCG + 12% lockbox model via ZIP 1015.
Proposed Evolution: ZIP 1016 - Community and Coinholder Funding Model
ZIP 1016 (proposed February 2025, status: Proposed) introduces a more decentralized funding model. It would:
- Continue the 8% allocation to ZCG.
- Convert the 12% lockbox into a "Coinholder-Controlled Fund" (seeded by existing lockbox funds + ongoing 12% block subsidy).
- Activate this model until the third halving (approximately 3 years).
- Empower ZEC coin holders to vote quarterly on grants via a community-defined process (simple majority, minimum quorum of 420,000 ZEC).
- Require Key-Holder Organizations (currently including ZF and Shielded Labs, with Bootstrap/ECC referenced in grant contexts) to administer disbursements via multisig, bound by legal agreements and coin-holder decisions.
- Maintain all ZIP 1015 requirements on lockbox use (funding ecosystem grants).
This proposal aims to shift from organization-controlled to direct coin-holder governance for the 12% allocation. It does not alter the ZIP process or trademark rules.
2. The Core Organizations & Their Funding Sources
Electric Coin Company (ECC) / Bootstrap Project
- Original creators of Zcash (2016).
- Historically received ~7% of the dev fund until November 2024.
- In January 2026, the core engineering and product team resigned from Bootstrap/ECC due to governance disputes and formed the Zcash Open Development Lab (ZODL).
- ECC/Bootstrap no longer receives direct protocol funding and no longer employs the primary development team. It relies on donations, sponsorships, and its own treasury.
- Holds historical significance but is no longer the active protocol development organization.
-> See full profile: Electric Coin Company
Zcash Open Development Lab (ZODL)
- Formed in January 2026 by the original Zcash protocol developers (the core ECC engineering and product team) after they left Bootstrap/ECC.
- Raised over $25 million in seed funding from major investors including a16z Crypto and Coinbase Ventures.
- The team, consisting of the original inventors and developers of the Zcash protocol, continues core protocol development, ZIP contributions, and privacy-focused tools including the Zodl mobile wallet (rebranded from Zashi).
- No direct on-chain protocol funding; operates as a VC-backed independent lab focused on advancing Zcash privacy infrastructure.
-> See full profile: ZODL
-> Official site: zodl.com
- Independent 501(c)(3) nonprofit focused on infrastructure, node software, research, and ecosystem health.
- Historically received 5% of the dev fund.
- No longer receives direct protocol funding post-NU6. Relies on donations and grants.
- Holds the Zcash trademark (donated by ECC in 2019) and plays a central role in governance.
- Runs the Zcash Community Advisory Panel (ZCAP) and helps facilitate community polling.
- Acts as a Key-Holder Organization under proposed ZIP 1016.
-> See full profile: Zcash Foundation
-> Official site: zfnd.org
Zcash Community Grants (ZCG)
- The Zcash Community Grants program funds independent teams and projects to perform major ongoing development and other work for the public good of the Zcash ecosystem.
- Grants are decided by a community-elected committee.
- Continues to receive the full 8% of block rewards (post-NU6), administered through the Financial Privacy Foundation.
- Grants are awarded through a transparent application and voting process open to the community.
-> See full profile: Zcash Community Grants
-> Official site: zcashcommunitygrants.org/
Financial Privacy Foundation (FPF)
- A non-profit organization incorporated in the Cayman Islands.
- Receives the 8% block subsidy allocation directly from the protocol (per ZIP 1015) and handles all legal, financial, and operational administration for the Zcash Community Grants program.
- Provides the umbrella structure and administrative support for ZCG operations, including disbursement, contracts, and compliance.
- ZCG operates as an autonomous community-elected entity under the FPF umbrella.
-> See full profile: Financial Privacy Foundation
-> Official site: financialprivacyfoundation.org/
- Independent, donation-funded Zcash support organization based in Switzerland.
- The first organization in the Zcash ecosystem that has never received direct or indirect funding from the Development Fund or block rewards.
- Focuses on initiatives that benefit ZEC holders and prioritizes holder voice in shaping Zcash's direction.
- Acts as a Key-Holder Organization under proposed ZIP 1016 for administration of the Coinholder-Controlled Fund.
- Contributes to protocol development, ZIP process, and governance (ZIP editor representation).
-> See full profile: Shielded Labs
-> Official site: shieldedlabs.net
3. Governance - How Decisions Are Made
Zcash governance is a mix of "on-chain protocol rules" and "off-chain social consensus":
-
ZIP Process (Zcash Improvement Proposals)
- Anyone can submit a ZIP.
- Public debate on forums, Discord, GitHub.
- ZIP Editors (currently Jack Grigg, Daira-Emma Hopwood, Kris Nuttycombe in individual capacities, Arya from ZF, and representatives from Shielded Labs) review and decide acceptance.
- Accepted ZIPs are included in the next network upgrade.
-
Trademark Agreement (2019-2024)
- ECC donated the Zcash trademark to ZF in 2019.
- The agreement originally required mutual consent from both ECC and ZF for any network upgrade creating a new consensus protocol.
- In April 2024 ECC announced intent to terminate; formal termination notice was issued August 2024.
- As of 2025, ZF is the sole steward of the Zcash trademark and has adopted a new permissive trademark policy reflecting ecosystem decentralization. The trademark no longer functions as a governance veto mechanism.
-
Zcash Community Advisory Panel (ZCAP)
- Volunteer group of ecosystem experts.
- Used for non-binding community polling on major decisions.
-
On-chain Ratification
- Once a network upgrade is deployed, the majority of the network hash rate must adopt it (no hard-fork risk if consensus is reached).
-
Future Direction - The Lockbox & ZIP 1016
- The 12% lockbox funds are accumulating in the protocol.
- ZIP 1016 proposes converting this into a Coinholder-Controlled Fund with quarterly coin-holder voting and multisig administration by Key-Holder Organizations (ZF and Shielded Labs currently noted).
4. Quick Reference Table - Funding Evolution
| Period | Miners | ECC/Bootstrap | ZF | ZCG | Lockbox | Notes |
|---|
| 2020 - Nov 2024 | 80% | 7% | 5% | 8% | - | Classic dev fund |
| Nov 2024 - now | 80% | 0% | 0% | 8% | 12% | NU6 model + ZCG extension |
| Proposed (ZIP 1016) | 80% | 0% | 0% | 8% | 12% (Coinholder-Controlled) | Until 3rd halving; coinholder voting |
6. Lockbox Dashboard
The ZecHub Dashboard as the current amount of ZEC in the Lockbox and Coinholders fund here.
