Zcash recouped much of last week’s losses, rising about 45% from Friday’s low of nearly $300 as developers offered a fix for the flaw that triggered the selloff.
ZEC traded at around $437 on Monday, according to CoinDesk data, although it remains down around 22% for the week. The token plunged after Shielded Labs, a nonprofit developer of the network, revealed a counterfeiting bug in Zcash’s Orchard pool, the part of the system that hides transaction details.
The flaw, undetected since 2022, could have allowed an attacker to create unlimited fake ZECs without anyone noticing and withdraw tokens from the protocol’s protected pool – which offers opt-in privacy.
Developers, including Shielded Labs, the Zcash Foundation, and the Zcash Open Development Lab, fixed the bug within days with 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 confirm coin supply.
Ironwood would create a new privacy pool using the repaired code and block the creation of new coins in the old Orchard pool. Once enabled, anyone running the Zcash software can add up the pool balances and confirm that no more than the correct amount of ZEC exists.
Users would not have to trust developers’ word or wait for funds to migrate.
The plan could also reveal whether the bug has already been abused. As users withdraw coins from the old pool, any counterfeit ZEC would either be exposed when trying to leave or blocked and destroyed. Shielded Labs said it believed 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 pool balances and “verify that the supply is clean.”
The developers did not give a specific timeline for the upgrade, saying that construction, testing and coordination work on the network could take longer than expected.
