Zcash founder Zooko Wilcox has proposed an 'Ironwood' upgrade to restore confidence after a critical bug allowed for potential infinite token creation. The vulnerability, which is impossible to verify due to privacy features, caused ZEC's market cap to crash to $5B before recovering by $2.5B following the proposal. The plan aims to solve a core tradeoff between privacy and supply auditability for the coin.
Zcash Ironwood supply audit proposal
- ▪The Ironwood plan involves isolating the old Orchard pool, implementing a "Turnstile accounting" system, and launching a new protected pool
- ▪Zcash founder Zooko Wilcox proposed an "Ironwood" upgrade to restore confidence in the privacy coin's supply
- ▪The Ironwood upgrade would allow users to verify that Zcash's circulating supply is correct by summing the balances of active pools
Zcash counterfeiting vulnerability disclosure
- ▪Due to Zcash's privacy features, it is cryptographically impossible to determine whether the counterfeiting vulnerability was ever exploited
- ▪Following the vulnerability disclosure, Zcash's market cap cratered to $5 billion from a recent peak of $10.48 billion
- ▪Shielded Labs disclosed a critical vulnerability in Zcash's Orchard shielded pool that could have allowed for the creation of unlimited counterfeit tokens
Zcash market cap recovery
- ▪After the Ironwood proposal, Zcash's market cap recovered by approximately $2.5 billion to nearly $7.5 billion
- ▪Zcash's market cap recovered to about $7.5 billion, still roughly 30% below its June 5, 2026 peak of $10.48 billion
Privacy coin auditability tradeoff
- ▪Ripple CTO Emeritus David Schwartz stated that if the bug was not exploited, user funds would remain safe and accessible in the old, deprecated pool
- ▪The crisis highlighted a core tradeoff for privacy coins between ensuring user privacy and allowing for supply auditability
Crypto market volatility context
- ▪A separate rally on May 6, catalyzed by an investment from Multicoin Capital, saw ZEC's market cap increase by $1 billion in under 24 hours
- ▪Helius Labs CEO Mert Mumtaz called the proposed Ironwood upgrade "extremely bullish," describing it as an ambitious response to the issue
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