Zcash Dev Fund fight deepens as ZEC embraces its ‘encrypted Bitcoin’ identity

The Zcash Dev Fund is a mechanism that routes 20% of every block reward that the network earns into a pool that funds grants to teams working on ecosystem development. 

The Zcash debate lands as developers set a November date for the protocol’s next major upgrade. ZEC, meanwhile, remains in the middle of an epic run that has pushed price close to $1,500 after a 20% uptick on Thursday.

Why is the Zcash Dev Fund being debated? 

In the same essay, Desalle called out the dependency, bureaucracy and political selection tendencies that a miniature welfare state like the Dev Fund can breed. 

If Zcash is already paying for its own development, there’s no urgency for anyone to explore alternative funding channels. Also, teams looking for funding will just learn to sell better to grant reviewers rather than actually build user-facing products. 

Desalle said that he even canceled a ZCG grant he raised about six months earlier, arguing that holding the money just “seemed wrong.”

Desalle pointed to marquee ecosystem projects like Tachyon, Shielded Labs, and ZODL as evidence that private capital shows up without a protocol subsidy.

Who should control the Zcash Dev Fund? 

On that concern, Qureshi and Desalle see eye-to-eye. Under coinholder grants, recipients are paid in the same ZEC that decides the next funding round. Hence, an influential grantee’s voting power compounds with every win. 

ZIP 1016 places no restriction on anyone voting their coins.

The ‘encrypted Bitcoin’ turn

The funding fight is inseparable from a shift in what Zcash holders say they want the coin to be. Qureshi argued the community has settled on an identity as “encrypted Bitcoin,” rejecting extra protocol features and accepting that a dependable store of value must eventually ossify. 

While the funding argument plays out, Zcash developers are targeting November 5 for activation of the NU7 upgrade after teams reached “unanimous agreement” on its contents, with a testnet activation set for October 6 and a final mainnet decision due October 20. 

NU7 would cut target block spacing from 75 seconds to 25 seconds and fold in the Network Sustainability Mechanism while preserving the halving schedule.

Holders have already weighed in on the direction. In a vote reported on Wednesday, 98.9% supported keeping the halving schedule and 99.9% of the ZEC-weighted vote backed the faster blocks, developer Sean Bowe said.