Zcash has bounced back strongly after a rough week, clawing back about 45% of losses from a low near $300 hit on Friday. The recovery comes as developers proposed a fix for a bug that had triggered a sharp sell-off. As of Monday, $ZEC traded around $437, according to CoinDesk data, though it still remains down roughly 22% over the week.
The trouble began when Shielded Labs, a nonprofit developer on the network, disclosed a counterfeiting bug in Zcash’s Orchard pool, the part of the system that hides transaction details. The flaw had gone undetected since 2022. In theory, it could have allowed an attacker to mint unlimited fake $ZEC without anyone noticing, then withdraw tokens from the protocol’s shielded pool, which offers opt-in privacy.
Emergency patch and new proposal
Developers from Shielded Labs, the Zcash Foundation, and the Zcash Open Development Lab quickly patched the bug within days through emergency network upgrades. They worked closely with mining pools ViaBTC and Foundry to coordinate the fix. Then, on June 6, the same groups proposed Ironwood, a broader plan to restore users’ ability to confirm that the coin’s total supply is still sound.
Ironwood would create a new privacy pool using the repaired code. It would also block the creation of new coins in the old Orchard pool. Once it activates, anyone running the Zcash software could simply add up the balances across pools and verify that no more than the correct amount of $ZEC exists. That means users wouldn’t have to trust the developers’ word or wait for funds to move elsewhere.
Could expose past abuse
The plan could also reveal whether the bug was ever actually exploited. As users move coins out of the old pool, any counterfeit $ZEC would either be exposed when it tries to leave, or it would get stranded and destroyed. Shielded Labs has said it believes exploitation was unlikely, but the upgrade provides a way to check.
Interestingly, the proposal has drawn attention beyond the usual Zcash community. In his latest newsletter, investor Chamath Palihapitiya described Ironwood as a way for anyone running a node to tally the balances across pools and “verify the supply is clean.” That kind of outside endorsement might help build broader confidence.
No firm timeline yet
Developers haven’t given a firm timeline for the upgrade. They’ve said the work to build, test, and coordinate it across the network could take longer than expected. For now, the market seems to be taking the news positively, though it’s still early days. The next few weeks will show whether Zcash can hold onto these gains and fully restore trust in its privacy features.
