In brief
- Zcash founder Zooko Wilcox unveiled a proposal for an upgrade designed to restore confidence in the privacy coin’s supply.
- Dubbed “Ironwood,” the proposal’s release coincided with a recovery in Zcash’s price, which still remained below Friday’s peak.
- One of Zcash’s most vocal supporters told Decrypt the upgrade is “bullish,” addressing a core tradeoff between privacy and auditability.
Zcash recouped losses this weekend after its founder, Zooko Wilcox, unveiled a proposal for an upgrade aimed at restoring faith in the digital asset’s scarcity.
The price of Zcash (ZEC) plummeted late last week after Shielded Labs, an organization dedicated to supporting the privacy coin’s development, disclosed a critical bug that allowed for the creation of an unlimited number of counterfeit tokens before it was fully patched.
Because of Zcash’s privacy features, the group noted at the time that it was impossible—using only cryptography—to determine whether the vulnerability was exploited, but the proposal introduced on Friday details changes for an “Ironwood” upgrade that could alleviate those concerns.
“Ironwood would allow users to verify that the circulating supply of Zcash is correct,” Wilcox said in an X post. “Users would gain this ability immediately upon the activation of Ironwood, by simply summing up the balances of the active pools.”
Since the privacy coin’s market cap cratered to $5 billion on Friday, Zcash’s total market value has recovered to nearly $7.5 billion. Despite the increase, Zcash’s market cap remains 30% below Friday’s peak of $10.48 billion, according to CoinGecko.
The token’s tumble weighed on other privacy coins, including NEAR Protocol, which rallied more than 8% to $2.15 over a 24-hour period. Meanwhile, Zcash rose 6% to about $445.
The Ironwood upgrade focuses on creating a new place for users to maintain their Zcash in shielded form, placing restrictions on transactions that could involve counterfeit coins, and using techniques such as AI-assisted security auditing to strengthen Zcash’s codebase.
Wilcox’s post noted that the upgrade’s timeline isn’t concrete, with a better understanding expected “as implementation plans mature and discussions continue.” The post underscored confidence that the vulnerability was never exploited.
Shielded Labs’ work involves the Zcash Foundation, Tachyon Group, Valar Group, and the Zcash Open Development Lab, according to the post. Not long after the proposal was floated, some of the privacy coin’s biggest advocates lauded the upgrade.
“I’m extremely bullish,” Mert Mumtaz, CEO and co-founder of Solana infrastructure firm Helius Labs, told Decrypt, describing the upgrade’s scope as an ambitious response. “Crypto is volatile.”
Mumtaz, who emerged as one of Zcash’s most vocal supporters last year, emphasized that the upgrade is expected to remedy a core tradeoff for privacy coins. But more importantly, it features new transaction logic to prevent similar bugs from arising in the future, he added.
Still, Mumtaz downplayed Zcash’s recent plunge, saying similar moves “happen all the time” in crypto. Friday’s pain was compounded by “massive hysteria” and Wall Street headwinds, he added, with the Nasdaq posting its biggest one-day point drop.
