Zcash Recovers $2.5 Billion in Market Cap After Founder Unveils "Ironwood" Upgrade Proposal

Zcash (ZEC) recouped roughly $2.5 billion in market capitalization over the weekend after founder Zooko Wilcox introduced a proposal for an "Ironwood" upgrade designed to restore confidence in the privacy coin's supply integrity. The token's market value had fallen to approximately $5 billion on Friday after Shielded Labs disclosed a critical bug that, prior to being fully patched, had allowed for the creation of an unlimited number of counterfeit tokens. Because of Zcash's privacy features, the organization said it was impossible—using only cryptography—to determine whether the vulnerability had been exploited. Wilcox's proposal, outlined in an X post on Friday, would change that. "Ironwood would allow users to verify that the circulating supply of Zcash is correct," Wilcox wrote. "Users would gain this ability immediately upon the activation of Ironwood, by simply summing up the balances of the active pools."

Following the announcement, Zcash's market cap recovered to nearly $7.5 billion, according to CoinGecko, though it remained about 30% below its Friday peak of $10.48 billion. Zcash rose 6% to roughly $445, while NEAR Protocol gained more than 8% to $2.15 over a 24-hour period as the broader privacy-coin segment recovered from Friday's losses. The Ironwood upgrade focuses on creating a new mechanism for users to hold Zcash in shielded form, placing restrictions on transactions that could involve counterfeit coins, and incorporating techniques such as AI-assisted security auditing to strengthen the codebase, according to Wilcox's post. Wilcox noted that the upgrade's timeline is not yet concrete, with a more defined schedule expected "as implementation plans mature and discussions continue." The post also stated confidence that the vulnerability was never exploited. Shielded Labs' work is conducted alongside the Zcash Foundation, Tachyon Group, Valar Group, and the Zcash Open Development Lab.

Mert Mumtaz, CEO and co-founder of Solana infrastructure firm Helius Labs, described the proposal in strong terms. "I'm extremely bullish," Mumtaz told Decrypt, calling the upgrade's scope an ambitious response to a core tradeoff for privacy coins and noting that it includes new transaction logic intended to prevent similar bugs from arising in the future. Mumtaz, who became one of Zcash's most vocal supporters last year, characterized the prior week's price decline as comparable to moves that "happen all the time" in crypto, attributing Friday's selling to "massive hysteria" combined with Wall Street headwinds, including the Nasdaq's largest one-day point drop. Separately, U.S. Rep. Brad Sherman (D-CA-32) used a House hearing on banking regulators to criticize government stablecoin payments, continuing his longstanding opposition to the crypto sector.