Gemini founders Cameron and Tyler Winklevoss have called for Zcash to scrap its community grants committee and give ZEC holders more control over funding decisions, as disagreements over the program’s $125 million treasury continue to grow.
Summary
- Cameron and Tyler Winklevoss have called for Zcash to scrap its community grants committee, arguing that ZEC holders should have a direct say over how development funds are distributed.
- Tyler Winklevoss has accused the committee of lacking accountability and questioned its handling of a treasury that Zcash cofounder Sean Bowe recently valued at more than $125 million.
- The dispute has divided community members, with some defending the grants program as an important source of development funding while others want its current structure replaced.
- Zcash already has a separate coinholder voting program that receives 12% of block rewards, while the community grants committee controls another 8% allocated to ecosystem development.
- Sean Bowe has proposed redirecting the committee’s share of block rewards toward a network sustainability mechanism, although no changes to the existing funding arrangement have been approved.
In an October 30 post on X, Cameron Winklevoss argued that Zcash does not need to develop a new governance system when stakeholder voting has been used in traditional capital markets for centuries.
He described coinholder voting as the blockchain equivalent of that system and said Zcash should concentrate on its original mission of protecting financial privacy.
“Experimenting in governance is not part of the Zcash mission. Its mission is privacy,” he wrote, before calling for Zcash Community Grants (ZCG) to be discontinued.
His comments followed similar criticism from his brother Tyler, who accused the committee of operating without sufficient accountability and questioned why ZEC holders have no direct say over its spending decisions.
Tyler Winklevoss questions Zcash grants committee accountability
In an October 30 response to community developer Vini Barbosa, Tyler argued that ZCG operates under a different set of incentives from the miners responsible for securing the Zcash network.
According to him, miners must commit their own capital and computing resources to compete for block rewards, with their earnings determined by how successfully they contribute to the network.
He contrasted that arrangement with ZCG, whose committee members approve funding without facing comparable financial risks if the projects they support fail to deliver.
At one point, he described the committee as a “slush fund with no accountability,” alleging that its structure encourages poor spending decisions and conflicts of interest.
Tyler questioned the absence of direct coinholder oversight, fiduciary responsibilities and financial consequences for committee members whose decisions result in unsuccessful projects.
He maintained that Zcash could continue operating without ZCG and that the committee should therefore be dissolved.
The criticism follows an October 27 proposal from Zcash co-founder Sean Bowe to redirect the committee’s 8% share of block subsidies toward the Network Sustainability Mechanism.
Bowe estimated that the program held more than $125 million in available funding, based on the value of its ZEC holdings and outstanding commitments.
His proposal calls for existing grant obligations to be honored before the remaining treasury funds are transferred to the reserve, while the separate coinholder grants program would continue receiving its 12% allocation.
Zcash community members defend development funding
Not everyone in the Zcash community agrees with the Winklevoss brothers’ position.
Responding to Tyler’s October 27 comments, developer Vini Barbosa argued that the development fund should not be compared to a charitable program or foreign aid.
He said community grants provide a legitimate way to finance projects that benefit the network, comparing their role in supporting development with the rewards miners receive for securing the blockchain.
Tyler rejected that comparison, arguing that mining rewards are distributed through measurable competition, while grant approvals depend on decisions made by a committee.
The disagreement follows criticism of a $550,000 outreach proposal that received ZCG approval in August.
As crypto.news previously reported, the ZECsy initiative included appearances at adult industry conventions, cryptocurrency conferences and educational workshops designed to introduce private payments to people facing banking restrictions.
The committee approved approximately $461,500 for the project’s first nine monthly milestones, with organizers required to submit progress and spending reports.
Supporters defended the initiative as a way to introduce Zcash to communities that could benefit from financial privacy, while critics questioned whether the spending would produce lasting adoption.
Coinholder voting already determines some Zcash grants
Zcash already operates a separate funding program that allows coinholders to vote directly on grants for completed development work.
Under the current arrangement, 20% of block rewards support ecosystem development, with 8% allocated to ZCG and the remaining 12% directed toward the Coinholder-Directed Retroactive Grants Program.
In September, ZEC holders approved $8.39 million in retroactive funding across 17 of 37 proposals.
The voting process involved approximately 2.18 million ZEC, representing 10.4% of the cryptocurrency’s maximum supply of 21 million coins.
Approved projects included security research, protocol development, wallet infrastructure and work connected to vulnerabilities discovered in Zcash’s privacy technology.
The program requires at least 420,000 ZEC to participate in a vote and a simple majority in favor before a proposal can receive approval.
Its next funding round is scheduled to accept proposals from October 30 through November 13, with voting planned for December 17 to December 29.
Zcash governance debate extends to community discussions
The disagreement has spread beyond the distribution of development funds to where Zcash governance discussions should take place.
In another October 30 post, Tyler criticized the idea that community debates should remain primarily on the project’s dedicated forums.
He argued that X provides a more open public space for discussions and said people should not be blocked or criticized simply for questioning established governance arrangements.
Meanwhile, the debate follows a period of substantial development spending across the Zcash ecosystem.
An October 27 report cited Grayscale research crediting the network’s developer funding model with helping support privacy and security improvements over the past decade.
Grayscale research head Zach Pandl pointed to continued protocol development during periods of weak token performance and identified quantum computing, transaction capacity and cybersecurity as areas requiring further investment.
The existing funding dispute has not resulted in an approved change to ZCG’s allocation, and Bowe’s proposal would require a future network upgrade before the new distribution rules could take effect.
