Zcash (ZEC) developers are weighing a new shielded pool and turnstile accounting after an Orchard vulnerability raised questions about verifying the privacy coin's supply.
Key Points:
- Shielded Labs is exploring a network upgrade adding a new shielded pool with turnstile accounting.
- The plan would let holders verify that no counterfeit ZEC exists inside the Orchard pool.
- ZEC fell about 50% on Friday before paring some of the losses.
Zcash Plans New Shielded Pool
Shielded Labs, an independent Swiss-based group that backs Zcash, said Friday it is exploring a network upgrade that would deploy a new shielded pool.
The plan would enforce turnstile accounting on coins leaving Orchard, giving holders a way to confirm the integrity of their funds. A follow-up post explaining the mechanics and tradeoffs is due next week.
Orchard hides transaction amounts using zero-knowledge proofs, so outside parties cannot otherwise check whether forged coins exist. Zcash Open Development Lab founder Josh Swihart suggested a second Orchard pool could be targeted for the NU7 upgrade at the end of July. He stopped short of endorsing the move, saying the community should decide.
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ZEC Drops After Disclosure
The proposal follows an emergency upgrade that patched an Orchard flaw the group warned could have minted unlimited counterfeit ZEC. No cryptographic method can prove whether anyone exploited the bug, though Shielded Labs called prior abuse unlikely.
ZEC tumbled roughly 50% on Friday, sliding from a daily high of $550.30 to as low as $264.80, according to market data. Liquidations across the market topped $100 million as the rout deepened, and the token later recovered to about $308.
The drop wiped out the week's earlier gains.
Experts Weigh Zcash Risk
Several community figures said the selloff looked overdone. CyberCapital founder Justin Bons argued the market overreacted because the bug was fixed and "the good guys caught it first."
Gemini co-founder Cameron Winklevoss said the find showed Zcash's investment in security rather than cause for alarm.
The episode also revived debate over formal verification, a method that uses mathematical proofs to confirm code matches its intended rules. Zcash researcher Sean Bowe said making shielded protocols formally verifiable is the long-term answer. Wei Dai of 1kx called wider coverage the only durable fix.
This is not Zcash's first such scare. In 2019, developers disclosed a counterfeiting flaw in the older Sprout shielded pool that had sat undetected for years, and that bug was also never known to have been exploited.
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