Grayscale pledges $1 million to Zcash ecosystem with first $400,000 in grants

Grayscale said on Nov. 10 it plans to direct $1 million to nonprofits and initiatives that support the Zcash ecosystem, funded by fees from its Zcash ETF, and has already awarded the first $400,000 in equal grants to four organizations. The asset manager also launched an educational site and a national advertising campaign the same day.

The first grants of $100,000 each went to the Zcash Foundation, the policy group Pretty Good Policy for Zcash, Swiss-based Shielded Labs and Project Tachyon, a scaling effort led by one of Zcash's co-founders, Decrypt reported. Bitcoin.com detailed the same recipients and grant amounts. The foundation supports open-source development and financial privacy research, Pretty Good Policy educates policymakers, Shielded Labs researches and develops Zcash network technology, and Project Tachyon is meant to help wallets update faster and process more private transactions, according to Bitcoin.com.

The funding comes from fees on The Zcash ETF, which trades under the ticker ZCSH. Grayscale said it intends to reinvest all of the sponsor fees it collects from the fund, for up to its first year as an exchange-traded product, into developing and marketing the network and educating people about it. Bitcoin.com reported the undertaking covers 100% of fund management fees for up to 12 months after the registration statement's effectiveness, and that Grayscale pays from its own funds after receiving the fees. The commitment is voluntary, and Grayscale can change or end it at any time, Decrypt noted.

Grayscale also launched Zcash Invest, an educational website and social media presence, along with a national ad campaign titled "Zcash: The Next Era of Crypto." The campaign kicked off with a Wall Street Journal wrap and a full-page interior advertisement highlighting ZCSH, Bitcoin.com reported, and will run across print, outdoor, digital, streaming and social channels with zebra artwork drawn from imagery associated with the Zcash community. Planned distribution also covers events and educational material, the report said.

Zcash Invest targets investors and advisers through the website, social media presence and educational content, and highlights ZCSH, a fund holding ZEC whose shares trade on NYSE Arca. Despite its ETF name, the product is not registered under the Investment Company Act of 1940, which governs conventional mutual funds and ETFs, so brokerage shares give indirect ZEC exposure without holders buying or safeguarding tokens themselves, Bitcoin.com reported.

"Financial privacy is becoming essential as more economic activity moves onchain and AI makes it easier to analyze," said Steve Vanourny, Grayscale's head of index, in remarks quoted by Decrypt. Bitcoin.com quoted him separately saying, "We believe Zcash will help define the next era of crypto," and linking growing analytical capabilities to AI's ability to connect public blockchain activity with real-world identities. He also identified quantum computing as a future technological challenge for the network.

The push lands during a weak stretch for ZEC. The token fell 11.3% over 24 hours to about $1,043 on Nov. 10 after briefly dipping below $1,000, according to CoinGecko figures cited by Decrypt, leaving it down roughly 19% over 30 days but still up about 75% from a year earlier. Bitcoin.com put the token at $1,033 during the day, with a low of $999.57, the lowest since early September, and noted ZCSH began trading on NYSE Arca on Aug. 25. Perpetual futures open interest stood at about $2.3 billion, Decrypt reported.

Competition among Zcash investment products is building, with another Zcash ETF in the works from the Winklevoss twins and Europe's first Zcash exchange-traded product already launched, according to Decrypt. The Zcash ETF listed after a critical flaw in the network's shielded pool sent ZEC down about 50% in May before a fix arrived in July, the report said. Zcash's Ironwood network upgrade went live on July 28 after a vulnerability was discovered in Orchard, the system for holding and transferring ZEC privately; Ironwood introduced a replacement shielded pool and capped withdrawals from Orchard at verifiably deposited amounts, limiting movement of hypothetical counterfeit coins, Bitcoin.com reported.