The price of Zcash has recovered almost 50% from last week’s decline after the proposal for the development of a new network that seeks to address the concerns raised by a newly disclosed vulnerability that could allow the creation of fake tokens.
Summary
- The price of ZEC rose again after Zooko Wilcox suggested that Ironwood should step up to verify the circulation of Zcash.
- Ironwood follows a patched vulnerability that would have allowed unlimited creation of fake ZEC.
- Developers previously used emergency network upgrades, including the NU6.2 hardfork, to fix the bug.
According to Zcash founder Zooko Wilcox, the proposed Ironwood upgrade will give users a way to ensure a rotating supply of cryptocurrency by summarizing the balance held across all active pools once the upgrade is activated.
The proposal came days after Shielded Labs disclosed a critical flaw in Zcash’s Orchard secure pool, a privacy-focused network system. After the disclosure, Zcash’s market capitalization dropped significantly from $10.48 billion to $5 billion before rebounding to around $7.5 billion, according to CoinGecko data.
Posting to X, Wilcox said Ironwood will allow users to independently verify that the rotating supply is correct. He added that the development of this program will introduce a new environment where they use secure ZEC, put barriers in the sale of counterfeit money, and integrate programs such as AI-assisted security audits to strengthen the codebase.
Contingency development addresses vulnerability
Information released by Josh Swihart, founder of the Zcash Open Development Lab, shows that developers had already submitted a two-stage response before the vulnerability became public.
Swihart said the first step involved a soft fork that temporarily disabled Orchard’s transactions. Keeping technical details private during that time reduced the chances of exploitation while developers worked on a permanent fix.
A second upgrade, known as the NU6.2 hard fork, was launched on June 3 and resolved the issue before Orchard’s money was refunded, according to Swihart.
Shielded Labs revealed that this flaw could have enabled an attacker to generate an unlimited amount of fake ZEC. At the same time, the agency said that it considers previous exploitation as unlikely, although it admitted that there is no cryptographic evidence that confirms that the vulnerability has never been exploited.
Because Orchard powers Zcash’s core secure transaction system with zero-knowledge proofs, the inability to fully confirm whether the flaw was exploited became a major concern after it was disclosed.
Ironwood wants to restore confidence in the offer
Against this background, Wilcox introduced Ironwood as a long-term solution focused on increasing visibility around network provisioning while maintaining privacy aspects.
His proposal stated that users will gain the ability to verify the circulating value of ZEC immediately after activation by combining balances from active pools.
According to Wilcox, the development timeline remains uncertain and will depend on development work and community consultation.
The certainty that the vulnerability was not exploited was reiterated in Wilcox’s post, although he did not provide definitive proof.
The development efforts behind the proposal involve several organizations, including the Zcash Foundation, Tachyon Group, Valar Group, and Zcash Open Development Lab, according to Wilcox.
Market sentiment improved following both the emergency repairs and the Ironwood proposal. Zcash (ZEC) rose nearly 6% in 24 hours to around $445, with its market capitalization recovering sharply from levels recorded immediately after the vulnerability was disclosed, according to data from crypto.news.
