Zcash has clawed back much of last week’s losses and is up about 45% from a low of nearly $300 it hit on Friday as developers proposed a fix for the bug that triggered the selloff.
ZEC traded around $437 on Monday, according to CoinDesk data, although it remains down about 22% for the week. The token fell after Shielded Labs, a nonprofit developer on the network, exposed a fake bug in Zcash’s Orchard pool, the part of the system that hides transaction details.
The flaw, undetected since 2022, could have let an attacker create unlimited fake ZEC without anyone noticing and withdraw tokens from the protocol’s shielded pool – which offers opt-in priv.
Developers including Shielded Labs, Zcash Foundation and Zcash Open Development Lab fixed the bug within days through emergency network upgrades coordinated with mining pools ViaBTC and Foundry. On June 6, the same groups proposed Ironwood, a plan to restore users’ ability to verify that the coin’s supply is healthy.
Ironwood would create a new privacy pool using the repaired code and block the creation of new coins in the old Orchard pool. Once activated, anyone running the Zcash software can add up the balances across pools and confirm that no more than the correct amount of ZEC exists.
Users didn’t have to trust the developer’s word or wait for the funds to migrate.
The plan could also reveal whether the flaw was ever abused. When users move coins out of the old pool, any fake ZEC will either be exposed when it tried to leave or be stranded and destroyed. Shielded Labs has said it believes exploitation was unlikely.
The proposal has attracted attention beyond the Zcash community. In his latest newsletter, investor Chamath Palihapitiya described Ironwood as a way for anyone running a node to tally balances across pools and “confirm that the supply is clean.”
Developers have not given a firm timeline for the upgrade, saying the work to build, test and coordinate it across the network could take longer than expected.
