Dragonfly’s Qureshi Calls for End to Zcash Dev Fund After 2028

Crypto-focused venture capital firm Dragonfly’s managing partner, Haseeb Qureshi, proposed winding down the Zcash developer fund after it expires under current rules in 2028.

“I’m of the opinion that this should be the final Dev Fund,” wrote Qureshi in a Friday X post, arguing that the fund is large enough to fund remaining work on Zcash and that it risks being “politicized” as it approaches $100 million in value.

The Zcash development fund held 63,962 Zcash (ZEC) tokens at press time, worth about $95 million, according to ZecStats.

The remarks follow a broader industry debate that stemmed from the fund’s increasing value, following the ZEC token’s rally. Others argued that Zcash should maintain its development fund. Paradigm founder Matt Huang argued in a Wednesday X post that the fund is particularly important “in this age of AI cyber capabilities” and rapid quantum progress. 

Zcash pools, including the dev fund, also known as the lockbox. Source: ZecStats

The ZEC development fund is a protocol development fund that accrues 0.1875 ZEC tokens per block, representing 12% of the block subsidy under the NU6 upgrade. Its balance sits outside circulation until governance disbursement.

Related: Zcash holders back 25-second blocks, vote to keep ZEC halving schedule

Industry split over who should control the ZEC development fund?

Industry watchers are also debating who should control the development fund. Dragonfly’s Haseeb said that the fund’s control shouldn’t move toward “pure token holder voting,” but showed support for a partial model, under which token holders would elect temporary councils.

Huang agreed with this view, adding that pure token holder governance may introduce “unpredictability that could limit long-term trust as a monetary asset” and proposed a hybrid model combining additional forms of governance. 

Maxime Desalle, investment analyst at Winklevoss Capital, suggested that the Zcash community “completely get rid” of the development fund, which would solve all the governance disputes surrounding it, writing in a Thursday X post. 

In a previous post on Sept. 9, Desalle argued that the fund may hurt the security of Zcash while recreating the dependencies and bureaucracies that many welfare states suffer from.

In a Sept. 1 X post, Zcash founder Zooko Wilcox said that 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.

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