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ZEC Rises After Orchard Fix – Is the Worst Really Over?
ZEC, the native coin of the Zcash ecosystem, has emerged as the best performer among the top 20 cryptocurrencies by market capitalization, recovering more than 40% since it fell below $250 following the Orchard bug report. The momentum indicators suggest that the downward trend is easing, with bulls now targeting the psychological level of $500.
In the last 24 hours, ZEC has outperformed the broader cryptocurrency market, gaining 9%. This rally follows the announcement by Josh Swihart, founder of the Zcash Open Development Lab (ZODL), detailing how the Zcash development team responded to a critical vulnerability in the Orchard Shielded Pool.
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Swihart stated that ZODL implemented a coordinated, two-step emergency upgrade to contain the issue and prevent potential exploitation.
The first step involved a soft fork that temporarily disabled Orchard transactions to reduce the risk of exploitation while limiting the public disclosure of the full vulnerability details. Swihart emphasized that this approach was designed to balance network security and responsible disclosure, allowing the issue to be contained without revealing sensitive technical weaknesses.
The second upgrade, known as NU6.2, was activated on June 3 to address the root cause of the vulnerability and restore Orchard functionality. This update re-enabled shielded transactions after the underlying issue was resolved, according to Swihart.
Mining pools and infrastructure operators, including ViaBTC and Foundry, played a crucial role in coordinating the emergency measures and reviewing the updated code. This recent development follows a report from the independent support group Shielded Labs, which disclosed a severe vulnerability in the Orchard pool that could have allowed unlimited minting of counterfeit Zcash tokens.
As a result of the vulnerability disclosure, ZEC lost nearly 60% of its value, plummeting from $644 on Wednesday to $248 by Friday. Although the vulnerability was addressed before confirmed exploitation, the revelation raised significant concerns within the crypto community regarding the protocol's security guarantees.
Currently, ZEC is trading above $420, reflecting a 9% increase over the last 24 hours. It is now above its 200-day EMA at $364 and is approaching its 100-day exponential moving average (EMA) at $428. If the bullish recovery continues and ZEC closes above $428, the recovery could extend to the 50-day EMA at $485, followed by the psychological mark at $500.
In summary, ZEC has shown a significant recovery following the Orchard fix, with a focus on restoring confidence in its security and functionality.
Ironwood Upgrade Boosts Zcash 45% Above Weekly Low
Zcash (ZEC) has rebounded approximately 45% from last week's low after developers proposed a new upgrade to address the privacy flaw that triggered a significant sell-off. The token was trading at around $437 on Monday, up from a low near $300 on Friday.
Despite this recovery, ZEC remains about 22% down on a weekly basis, as the counterfeiting bug that unsettled investors still looms large. The sell-off began after Shielded Labs, a nonprofit developer in the network, disclosed a counterfeiting bug in the Orchard pool that had gone unnoticed since its launch in 2022.
Security researcher Taylor Hornby discovered the bug on May 29 using an advanced AI model during a code audit.
The developers addressed the issue within days through two emergency upgrades completed on June 1 and 2, coordinated with mining pools ViaBTC and Foundry. The Ironwood proposal aims to restore users' ability to verify the integrity of the coin supply, with an activation targeted for the end of July.
This upgrade is expected to create a new privacy pool with repaired code and block new coins in the old Orchard pool. Once active, users running the Zcash software will be able to aggregate balances across all pools and verify that no additional ZEC exists.
Zcash co-founder Zooko Wilcox noted that holders currently cannot verify the supply themselves, a gap that the upgrade aims to close. Investor Chamath Palihapitiya explained that the plan will enable node operators to add balances and confirm that the supply is clean.
The bug incident wiped out over $3 billion in Zcash market capitalization, causing ZEC to drop from a high near $527 to below $350 amid a broader market downturn. This situation echoes a vulnerability from 2019 in an older Zcash pool, which also had no confirmed exploitation.
In conclusion, the Ironwood upgrade represents a significant step towards restoring confidence in Zcash's security and integrity, although the market remains cautious following recent events.
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