Zcash plunged 48% after disclosure of Orchard privacy pool vulnerability. Developers deployed emergency soft fork and found no exploitation. ZEC rebounded 30% as confidence returned and short
Zcash (ZEC) staged a strong recovery on Saturday, climbing as much as 30% after developers moved to reassure users that a recently disclosed vulnerability did not compromise the cryptocurrency’s supply cap. The rebound came less than two days after ZEC suffered one of its steepest declines in recent years. Market participants rushed to exit positions following the disclosure of a flaw in Zcash’s Orchard privacy pool, which had remained undetected since May 2022.
Early Friday, panic selling pushed ZEC down to $250. The token had traded as high as $645 just one day earlier. However, sentiment improved over the weekend as developers provided additional details about the issue and the steps taken to address it.
According to the Zcash Open Development Lab, the vulnerability was discovered on May 29 by independent security researcher Taylor Hornby during an ongoing protocol audit conducted on behalf of Shielded Labs. The flaw involved a soundness issue that could have allowed the network to accept transactions that should have been rejected. Developers responded quickly and coordinated an emergency network upgrade. Consequently, a soft fork went live on June 1 to eliminate the risk and secure the protocol.
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Investor concerns centered on the possibility that an attacker could have secretly created counterfeit ZEC without detection. Since the vulnerability affected a shielded privacy pool, traders feared that any abuse might remain hidden from public view. However, Zcash developers stated that they found no evidence suggesting the flaw had ever been exploited. Moreover, they emphasized that Zcash’s turnstile mechanism provides visibility into value entering and leaving shielded pools.
According to the development team, that mechanism serves as a safeguard for the network’s 21 million coin supply cap. As a result, developers maintain that the integrity of the supply remains intact despite the severity of the discovered vulnerability. The incident marked only the second security-driven protocol upgrade in Zcash’s history since the network launched in 2016. That fact highlighted the significance of the response while also demonstrating the project’s ability to coordinate emergency fixes.
Beyond the technical explanations, several well-known crypto figures weighed in on the situation. Dragonfly managing partner Haseeb Qureshi and Grayscale founder Barry Silbert both commented publicly on the confusion surrounding the vulnerability and its implications.
At the time of writing, ZEC was trading around $369, representing a gain of roughly 21% over the previous 24 hours. Market observers also pointed to short-covering activity as a factor behind the rebound, as traders who had bet on further declines moved to close positions.
Zcash’s recovery suggests that investor confidence improved after developers clarified the impact of the Orchard vulnerability. While the bug triggered intense selling pressure, the absence of evidence of exploitation and the successful emergency upgrade helped stabilize sentiment across the market.
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