The Zcoin team has announced that its block reward distribution will be modified in its upcoming halving in September 2020. This modification will be effective for the next 4 years.

The current block reward of 25 XZC is distributed as follows: Miners (56%), Znodes (30%), Founder & Seeds (8%), and Development (6%). After the halving, the block reward will be reduced to 12.5 XZC and distributed to miners (50%), Znodes (35%), and development (15%). This means that founders and seed investors will no longer receive any rewards, thus, channeling the entire reward to the community and development. Consequently, the new reward distribution will be coded into the next wallet release along with deterministic Znodes and LLMQ.

Some of the factors considered by the Zcoin team before reaching its decision to reallocate the block reward included the need for accountability and transparency, sustainable funding for research and development, greater community involvement in the decision making process, and continued community growth through miners and Znodes. Since the reward going to miners has been reduced while the reward to Znodes has increased by 5%, the team believes that this will incentivize token holders to host Znodes.

As far as the development fund goes, it is expected to last for 4 years, whilst being subject to a community review after 2 years. Peradventure the price of Zcoin increases and the development fund exceed $100,000 monthly, the excess of each month will be sent to a separate public address called the Zcoin Reserve Fund.

The Zcoin Reserve Fund can only be used in specific circumstances like if the price of Zcoin falls below $3.5 (to cover development costs if there are shortages) or upon community approval. In general, the reserve funds are meant to cushion the effects of market volatility and cover any expenses that may arise from community decisions.