While the old DFM ensured ongoing development within the Zcash ecosystem, it also introduced poor incentives, making it difficult to hold Dev Fund recipients accountable to the community that was funding them. In July of 2024 the community voted to move to grants-based funding, a non-direct funding model (NDFM) that requires Dev Fund recipients, regardless of their size and status, to submit concrete proposals, compete for funding, report on their progress, and deliver on their promises in order to continue to receive community support. The transition to NDFM began with the addition of the Lockbox under NU6, from which all funds will eventually be released through community consensus. The next step is to decide on and build out the fund disbursement mechanism for the Lockbox.
Hybrid Deferred Dev Fund
The community also voted to extend direct funding for ZCG by one year. Under the temporary Hybrid Deferred funding model 12% of the block subsidy will go to the Lockbox and 8% will be distributed to the Financial Privacy Foundation (FPF), for the express use by ZCG for community grants. This interim solution ensures that independent teams within the Zcash ecosystem continue to receive necessary funding while the Lockbox’s disbursement mechanism is finalized.
