ZEC Surges Into Top 10, Old Controversies Resurface

In less than a month, ZEC has skyrocketed over 150% to enter the top 10 by market cap, with its privacy coin features gaining mainstream attention. However, old controversies have resurfaced, including ongoing fees, privacy not being default, governance turmoil, and security vulnerabilities. The market is fiercely contested between bulls and bears, and the core issues remain unresolved.

In less than a month, ZEC surged from around $486 in mid-August to a peak of $1,200, a gain of over 150%. ZEC is an old asset launched in 2016, with its code based on a fork of Bitcoin and the same total supply cap of 21 million coins. The key difference is the introduction of shielded transactions based on zero-knowledge proofs, which can hide the sender, receiver, and amount in a transaction—this is the origin of its "privacy coin" identity. This rally pushed it into the top 10 by market cap across the entire network.

Old Grudges of Two Veterans

As soon as the price surged, two old grudges related to Zcash were simultaneously brought up. Wang Chun, co-founder of F2Pool, stated on X that six years ago, because the other party couldn't even figure out the time zones, he directly blocked the entire team, and called that decision one of the "most correct decisions" he has made to this day. "Shenyu," co-founder of crypto custody platform Cobo and mining pool F2Pool, also shared his story: on the night of the mainnet launch in 2016, he had just mined a little ZEC when the transformer at his home mining farm was struck by lightning. Since then, he has been traumatized, and ZEC has never appeared in his personal wallet again.

The price and the criticism rose almost simultaneously.

Bringing up old grudges was just the opening. Half an hour later, Wang Chun posted a longer tweet, breaking down his dissatisfaction with Zcash into four more specific arguments—from the launch setup to recent security incidents, listing them one by one.

Fees Never Stopped

Wang Chun's first argument: a coin that writes self-dealing clauses directly into block rewards should not be packaged as a "clean," neutral currency. This refers to Zcash's design after mainnet launch—Bitcoin's block rewards go only to miners, but Zcash is different. In the first four years after mainnet launch, 20% of each block reward was allocated as a "Founders' Reward," distributed to founders, employees, advisors, and early investors, totaling about 2.1 million ZEC over four years, accounting for 10% of the 21 million total supply cap. According to the original design, this fee was only to be issued for four years and should have ended after 2020—after that, Zcash would become a "clean" asset like Bitcoin: all block rewards go to miners, and no team or institution can take a share from new supply.

But when the fee actually expired in 2020, the community voted to pass ZIP 1014, extending the same 20% block subsidy under the name "Development Fund" until 2024, distributed to Bootstrap, the Zcash Foundation, and several major grant programs. The mechanism of allocating 20% of block subsidies to non-miners did not completely disappear with the expiration of the "Founders' Reward"—the name changed, the recipients changed, but the fact that "20% is taken from each block before miners get their share" has never truly ended for Zcash.

Privacy Is Not Default

Zcash's most impressive technology is zero-knowledge proofs, which theoretically can completely hide transaction details. But the protocol itself does not enforce privacy—users can freely choose shielded (private) addresses or transparent addresses, and some wallets and exchanges, for compatibility reasons, still only support transparent addresses. Zcash officials also admit that to truly achieve transaction privacy, one needs to actively choose services that enable shielded transactions by default.

This means Zcash's privacy capability does not equate to all ZEC circulation being naturally private. "Optional privacy" and "default privacy" are two different things; the former is more like a feature switch, while the latter is a protocol commitment—and what Zcash has provided for ten years is always the former.

Team Mass Exodus

In January 2026, the Electric Coin Company (ECC) team responsible for Zcash core development collectively resigned. ECC claimed it was forced out due to major disagreements with the Bootstrap board, the governance body; Bootstrap attributed the conflict to governance arrangements and legal restrictions of non-profit organizations. Two months later, the two sides reached an agreement: ECC would gradually wind down operations, and technical assets would be transferred to a newly formed team, with the project itself not halted.

The storm subsided, but the fact that a company developing the protocol and holding core technical assets could reach the point of collective resignation due to conflicts with the Bootstrap board within ECC's governance system itself shows that this governance structure is still far from "mature."

Security Vulnerability

Security researcher Taylor Hornby discovered on May 29 that the zero-knowledge proof circuit of the Orchard privacy pool had a flaw that had been latent for about four years, theoretically allowing someone to create fake ZEC out of thin air without leaving on-chain traces. The team immediately initiated emergency fixes: on June 2, they temporarily disabled Orchard-related transactions, and on June 3, they restored them via NU6.2; during the same period, ZEC rebounded from $544 to $624. But on June 5, well-known investor Arthur Hayes publicly announced that he had liquidated all his ZEC positions, with a straightforward reason: even if the circuit is fixed, there is no cryptographic method to prove whether anyone has used this vulnerability to secretly mint fake coins over the past four years—"fixed" and "proven not exploited" are two different things. Subsequently, ZEC fell rapidly, dropping to around $309, nearly halving.

This precisely shattered Zcash's most fundamental narrative: its total supply is also locked at 21 million coins, and it has been packaged as "a more thorough digital hard money than Bitcoin"—but every issuance of Bitcoin is on a public ledger, and anyone can verify whether the total is correct; Zcash, for the sake of privacy, has obscured part of this ledger, with the result that over the past four years, no one can prove whether the actual circulating supply of this "hard money" is truly still within the 21 million cap.

Bulls vs. Bears Collide

The bearish side has both arguments and conviction backed by real money: Wang Chun believes that entering the top 10 by market cap does not mean ZEC deserves to stand alongside Solana and Hyperliquid, and this rally is "purely narrative-driven"; Garrett Jin, known as the "1011 insider whale proxy," has shown the same attitude with his positions—as of September 8, he still holds a short position of about 39,760 ZEC on Hyperliquid, with a notional value of about $45 million and an average entry price of $576.3. Even with an unrealized loss of $22.2 million, he continues to add to his position.

The bullish side is not just empty narrative: the U.S. Securities and Exchange Commission (SEC) ended its years-long investigation into the Zcash Foundation in January 2026 without taking enforcement action, removing a long-standing compliance concern for institutions; Grayscale estimates that if ZEC's market cap reaches 2%, 5%, or 10% of Bitcoin's, the corresponding prices would be $1,622, $4,054, and $8,109 respectively; as of August 29, ZEC's market cap was $13.74 billion, only 0.88% of Bitcoin's, so the theoretical upside is indeed still there. The ETF listing also allows traditional funds to gain direct ZEC exposure for the first time without dealing with wallets and private keys.

The two sides are not arguing about the same thing: one side is calculating "how much market share can privacy assets capture," while the other is calculating "does this team and this mechanism deserve that share."

The Ledger Is Not Settled

From $309 all the way up to over $1,200, ZEC has completed a round of dramatic repricing. But this rally has not changed its historical problems—the controversy over the distribution mechanism, the product paradox of optional privacy, the old news of governance infighting, and the trust gap from the Orchard vulnerability. None of these have disappeared because of the price increase, and none have been truly resolved.

The game over what supports ZEC's current price is not over yet.

The real test is not whether ZEC can hit a new high, but whether the market is still willing to take it at today's price after shorts are no longer forced to cover and profit-takers start cashing out.

If it cannot hold, then this surge may leave behind just another old asset that has been re-hyped; if it can hold, then Zcash will have truly passed the most critical test of this cycle.

Only then will we know whether the money flooding back in today is buying a future for privacy assets, or just a successful old story.