Zcash’s development fund has a balance that accumulates new tokens each block, and one investor wants to stop that accumulation before the fund grows too large. The fund, also known as the lockbox, gathers 0.1875 ZEC tokens per block under the NU6 upgrade, representing 12% of the block subsidy. Its balance sits outside circulation until governance disbursement.
The Fund’s Numbers
The fund’s balance is significant. Its existence is also a point of friction, because it holds money that belongs to the network but sits out of circulation until someone spends it.
The fund’s rules are straightforward:
- It accumulates 0.1875 ZEC per block
- That represents 12% of the block subsidy under NU6
- Its balance sits outside circulation until governance disbursement
Who Controls the Fund
The question of who controls the fund is where the debate gets complicated. Industry watchers are debating whether token holders should govern it directly, through elected councils, or let a founder-led committee keep running it.
Haseeb, another investor, said the fund’s control shouldn’t move toward “pure token holder voting,” but he supported a partial model. Under that model, token holders would elect temporary councils to manage the fund.
Desalle, investment analyst at Winklevoss Capital, went further. He suggested the Zcash community “completely get rid” of the development fund, which would solve all the governance disputes surrounding it. He wrote this in a Thursday X post.
Why Desalle Wants It Gone
Desalle made the case against the fund in a Sept. 9 post. He argued that the fund may hurt the security of Zcash while recreating the dependencies and bureaucracies that many welfare states suffer from.
He framed the proposal as a clean solution to governance disputes. His argument is that the fund introduces a layer of decision-making that token holders don’t fully control, and that layer creates uncertainty about how the money gets spent.
Wilcox Defends the Fund
Not everyone agrees. Zooko Wilcox, the founder of Zcash, defended the fund in a Sept. 1 X post. He said the Zcash Community Grants Committee was among the main reasons that Zcash “has survived and grown to where it is today.”
On Sept. 14, Wilcox clarified that the committee only accounts for 40% of the development fund.
The Fight Over Spending Power
The disagreement is real. One investor wants the fund to stop accumulating, while another investor supports a hybrid model combining additional forms of governance.
The fight over who gets to spend the money is just beginning.
Source material: “Dragonfly’s Qureshi calls for end to Zcash dev fund after 2028,” Cointelegraph.
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