ZEC surged from about $486 in mid-August to as high as $1,200 in less than a month, a gain of more than 150% that pushed it into the top 10 crypto assets by market capitalization. Zcash, launched in 2016, was built from Bitcoin’s codebase and carries the same 21 million supply cap, but it added zero-knowledge-based private transactions that can hide the sender, recipient and amount. That privacy feature is the reason it has long been grouped with so-called privacy coins.
Old grievances resurfaced as the price ran higher
As ZEC rallied, two old stories tied to Zcash resurfaced almost at the same time.
Wang Chun, co-founder of F2Pool, wrote on X that six years ago he blocked the entire team because they could not even figure out the time zone, adding that the move remains “one of the most correct decisions” he has ever made. Shenyu, co-founder of crypto custody platform Cobo and mining pool F2Pool, shared his own story as well. On the night of the 2016 mainnet launch, he had just mined a small amount of ZEC when lightning struck the transformer at his home mining farm. He said the incident left a lasting shadow and that ZEC never appeared in his personal wallet again.
The rise in price and the wave of criticism moved almost in parallel. About half an hour later, Wang posted a longer thread laying out four more specific complaints about Zcash, ranging from its launch structure to the most recent security incident.
The 20% carve-out from block rewards never fully went away
Wang’s first argument was that a coin that hard-coded a self-benefiting clause into block rewards should not be packaged as a “clean” and neutral form of money.
That criticism points back to Zcash’s original mainnet design. Bitcoin sends its block rewards entirely to miners. Zcash did not. During its first four years, 20% of each block reward was set aside as a “founders reward” and distributed to founders, employees, advisors and early investors. Over four years, that added up to about 2.1 million ZEC, equal to 10% of the asset’s 21 million maximum supply. Under the original plan, that carve-out was supposed to end in 2020. Only after that point would Zcash resemble Bitcoin more closely, with all newly issued rewards going to miners and no team or institution taking a share of fresh supply.
When the arrangement actually expired in 2020, the community approved ZIP 1014, extending the same 20% block subsidy under the label of a development fund through 2024. The funds were directed to Bootstrap, the Zcash Foundation and several large grant programs.
In practical terms, the mechanism that diverted 20% of block subsidies to non-miners did not disappear when the founders reward expired. The name changed. The recipients changed. The underlying structure did not: 20% was still taken from each block before miners received the rest.
Privacy is available, but not the default state
Zcash’s clearest technical selling point is its use of zero-knowledge proofs, which in theory can fully conceal transaction details. But the protocol itself does not force all transfers into a private mode.
Users can choose between shielded addresses and transparent addresses, and some wallets and exchanges still support only transparent addresses for compatibility reasons. Zcash itself has acknowledged that anyone seeking actual transaction privacy needs to use services that actively default to shielded transactions.
That distinction matters. Zcash having privacy capabilities does not mean all ZEC in circulation is naturally private. Optional privacy and default privacy are not the same thing. One behaves like a feature toggle. The other is a protocol commitment. For the past decade, Zcash has offered the former, not the latter.
The ECC team’s departure exposed governance strain
In January 2026, the team at Electric Coin Company, the group responsible for core Zcash development, resigned en masse.
ECC said the break came after deep disagreements with the board of Bootstrap, the project’s governance body, and that it was effectively forced out. Bootstrap described the conflict differently, tying it to governance arrangements and legal constraints facing nonprofit organizations. Two months later, the two sides reached an agreement under which ECC would gradually wind down operations, technical assets would move to a newly formed team, and the project itself would continue running.
The immediate dispute was contained, but the episode left a mark. A company responsible for development protocols and key technical assets had reached the point of a collective resignation in a conflict with the Bootstrap board inside the same governance structure. That alone raised questions about how mature the framework really was.
The Orchard flaw reopened the supply-trust question
Security researcher Taylor Hornby discovered on May 29 that the zero-knowledge proof circuit for the Orchard shielded pool contained a flaw that had been present for about four years. In theory, the defect could have allowed someone to create fake ZEC without leaving any on-chain trace.
The team moved quickly. Orchard-related transactions were temporarily shut down on June 2, then restored on June 3 through NU6.2. During the same period, ZEC rebounded from $544 to $624.
On June 5, though, investor Arthur Hayes said publicly that he had exited his entire ZEC position. His reasoning was simple: even if the circuit had been fixed, there was still no cryptographic way to prove that nobody had secretly minted counterfeit coins through the flaw during the previous four years. “Fixed” and “proven never exploited” are two different claims.
ZEC then dropped quickly and at one point fell to around $309, close to a 50% decline.
That hit at the base of Zcash’s core narrative. Like Bitcoin, it carries a fixed cap of 21 million coins and has long been presented as an even more complete version of digital hard money. But Bitcoin’s issuance is fully visible on a public ledger, which lets anyone verify the supply. Zcash hides part of that ledger in the name of privacy. The result is that nobody can prove whether the actual circulating amount over the past four years truly stayed within the 21 million cap.
Bulls see market share. Bears see unresolved structural flaws.
The split around ZEC is no longer just rhetorical.
On the bearish side, Wang said a place in the top 10 by market value does not mean ZEC deserves to stand next to assets such as Solana and Hyperliquid, calling the rally “purely narrative-driven.” Garrett Jin, described as the “agent of the 1011 insider whale,” showed a similar view through positioning. As of Sept. 8, he still held a short position of about 39,760 ZEC on Hyperliquid, with a notional value of roughly $45 million and an average entry price of $576.3. Despite an unrealized loss of $22.2 million, he was still adding to the trade.
The bullish case is built on different inputs. In January 2026, the U.S. Securities and Exchange Commission closed a years-long investigation into the Zcash Foundation without taking enforcement action, removing one compliance question that had hung over institutional participants. Grayscale has estimated that if ZEC’s market capitalization were to reach 2%, 5% or 10% of Bitcoin’s, the implied prices would be $1,622, $4,054 and $8,109, respectively. As of Aug. 29, ZEC’s market value stood at $13.74 billion, or just 0.88% of Bitcoin’s. Theoretical upside, on that framing, remains. An ETF uplisting has also allowed traditional capital to get ZEC exposure directly for the first time without dealing with wallets or private keys.
The two camps are arguing over different questions. One side is trying to estimate how much market share a privacy asset can capture. The other is asking whether this team and this mechanism deserve that share in the first place.
The repricing happened. The old questions remain.
ZEC has already gone through a violent repricing, rising from $309 to above $1,200. What the move has not done is erase its history.
The disputes over distribution, the product paradox created by optional privacy, the aftereffects of governance infighting, and the trust gap left by the Orchard flaw have not disappeared because the token rallied. None of them has been fully resolved either.
The contest over what supports ZEC’s current price is still underway. The key test is not whether the token can push to another high. It is what happens after shorts are no longer forced to cover and profit-takers begin to sell. At that point, the market will show whether it is still willing to absorb ZEC at today’s levels.
If it cannot, this spike may be remembered as one more old asset reheated by a powerful narrative. If it can, Zcash will have passed the most important test of this cycle. Only then may it become clear whether the returning capital is buying the future of privacy assets or simply a well-told old story.
