Did 'Unlimited Minting' Actually Happen? Zcash Founder Responds to Four Major Market Concerns

marsbitPublicado em 2026-06-15Última atualização em 2026-06-15

Resumo

The Orchard shielding pool in the privacy cryptocurrency Zcash was recently found to have contained a critical counterfeiting vulnerability that existed for four years. This discovery caused significant market panic and a sharp drop in the price of ZEC, though it has since recovered partially. Zcash founder Zooko Wilcox addressed four key questions raised by the vulnerability. First, while it's unknown if the bug was exploited, he believes it likely was not, citing advanced, targeted discovery methods, a rapid response to freeze the pool, and the typical "smash-and-grab" nature of past crypto exploits. Second, he states that if no exploitation occurred, all legitimate user funds in Orchard are recoverable. However, cautious users moving funds should be aware of privacy trade-offs and other risks involved in transferring to transparent or Sapling pools. Third, users currently cannot independently verify that the total ZEC supply hasn't been inflated due to this bug. However, the proposed "Ironwood" network upgrade will restore this ability by permanently sealing the Orchard pool. This will prevent any counterfeit funds from circulating and allow anyone running a node to cryptographically verify that the supply cap has not been breached. Finally, regarding other undiscovered vulnerabilities, Wilcox notes that intensive ongoing audits by multiple teams, including using advanced AI-assisted tools, have so far found no other counterfeiting bugs. This provides increased, though ...

Editor's Note: On June 5th Beijing time, privacy project Zcash was exposed to have had a critical forgery vulnerability in its new-generation privacy pool Orchard. The price of Zcash's token ZEC plunged, at one point halving to a low near $250.

After about 10 days of development, market panic has somewhat subsided, and the price of ZEC has also recovered somewhat, climbing back to $500 today. (Recommended reading: "'Unlimited Money Printing' Vulnerability Lay Dormant for Four Years, Privacy Coin ZEC Halved in a Day")

This morning, Zcash founder Zooko Wilcox released another lengthy article in response to the market's key concerns.

He stated that it is likely the Orchard vulnerability was not previously exploited, and legitimate Orchard funds can be recovered. Currently, users cannot independently verify whether the Zcash supply exceeds the limit, but the Ironwood upgrade will seal the Orchard pool, restoring this verification capability. Ongoing audits have not revealed other forgery vulnerabilities, but complete certainty requires more work.

The recent Orchard vulnerability has raised important questions about Zcash's supply and user fund security. The discussion has mixed several different issues, making it difficult to understand the actual impact of this vulnerability on users. This article attempts to separate these issues and explain what they each mean for users.

The Orchard vulnerability raises four important questions:

1. Was the Orchard vulnerability ever exploited?

2. Can legitimate Orchard funds be recovered?

3. Can users verify that the Zcash supply has not been inflated?

4. How do we know there are no other forgery vulnerabilities?

Was the Orchard Vulnerability Ever Exploited?

Unknown. We believe it's unlikely to have been exploited previously, though it cannot be completely ruled out. We think the vulnerability likely remained unexploited for three reasons:

Despite continuous review over the years by many of the world's top cryptographers and security researchers, this vulnerability was not previously discovered. Its final discovery was not accidental; it was found by Taylor Hornby of Shielded Labs, whose goal was to proactively identify such security vulnerabilities before malicious attackers could.

Taylor used advanced AI-assisted security research techniques and custom-built tools specifically designed to find subtle flaws others missed. Doing this would be more difficult for someone not deeply familiar with the Zcash codebase.

Once discovered, Zcash developers (led by the Zcash Open Development Labs team) quickly coordinated with mining pools to temporarily freeze the Orchard pool and deploy a fix, thereby limiting any attacker's window of opportunity.

Cryptocurrency exploits are common, and attackers typically try to cash out as quickly as possible, especially after a vulnerability is made public. To profit from this vulnerability, an attacker would need to exchange forged ZEC for valuable assets, which typically requires the ZEC to leave the Orchard pool via the turnstile mechanism.

If the vulnerability had been exploited before the fix, we would expect evidence to have surfaced by now. Historically, cryptocurrency exploits are typically "smash-and-grab" operations, not strategies like "4D chess" hidden for months or even years.

Can Legitimate Orchard Funds Be Recovered?

We believe so, because we believe the vulnerability was never exploited. If this assessment is correct, all legitimate Orchard funds remain fully recoverable.

On the other hand, if forgery did occur in Orchard, the existing turnstile mechanism would limit the total migrated amount to the number of ZEC that legitimately entered the pool.

Therefore, if forged funds were migrated ahead of legitimate funds, users would be unable to recover some or all of their legitimate Orchard funds.

We consider this scenario unlikely. However, for more cautious users, it is still recommended to move their ZEC out of Orchard.

But before doing this, they should understand the following:

· Moving funds to a transparent pool (i.e., to a t-address) will reveal both the transfer amount and time, and these funds will also become publicly linked to that t-address.

· Moving funds from the Orchard pool to the Sapling pool reveals the transfer amount and time, but unlike moving to a t-address, it does not link these funds to a specific address or transaction history.

· The Sapling pool relies on a trusted setup ceremony performed in 2018. Relying on the security of that trusted setup is an additional risk users should be aware of.

· To our knowledge, YWallet and Zkool are currently the only widely used self-custody Zcash wallets that support the Sapling pool.

· Moving funds to a new wallet or custodian service introduces additional risks, including user error, software bugs, custodian risk, or other unforeseen problems.

Overall, we consider the above risks moderate.

If your funds are currently in a shielded self-custody wallet, leaving them there is a reasonable choice, given our assessment that previous forgery is unlikely. If you have a safe way to move them elsewhere, that might also be reasonable. Users may reach different conclusions based on their own circumstances.

Can Users Verify That the Zcash Supply Has Not Been Inflated?

Currently, no. The previous existence of this vulnerability meant that users cannot independently verify whether the ZEC currently circulating in the shielded pools does not exceed the correct amount.

However, as we noted in a previous post, the Ironwood upgrade restores this ability. The following diagram illustrates why.

The proposed network upgrade addresses this by adding the guarantee that "no more unknown forgery vulnerabilities exist" and by sealing the Orchard pool. New funds cannot enter, and funds within the pool can no longer circulate.

The only remaining path out is via the existing turnstile mechanism, which ensures that no more ZEC can leave the Orchard pool than legitimately entered it.

This change restores the ability to verify the soundness of the Zcash supply.

Currently, if forged funds exist in the Orchard pool, they can continue circulating within it. After the upgrade, this is no longer possible. Regardless of whether forgery occurred, anyone running a node can verify that the circulating ZEC does not exceed the correct amount.

Users do not need to wait for funds to migrate out of Orchard or infer the behavior of attackers or other users. The protocol itself provides a verifiable guarantee: excess ZEC cannot continue circulating within Orchard and inflating the supply.

This is important because Zcash's long-term credibility depends on users' ability to verify the soundness of its supply themselves. Ironwood restores users' ability to independently verify that the protocol's supply limits are being enforced.

How Do We Know There Are No Other Forgery Vulnerabilities?

We cannot be completely certain yet, but we have reasons to believe there are none. Shielded Labs and several other teams have been carefully reviewing the Zcash protocol for other forgery vulnerabilities.

This includes using a not-yet-released Mythos AI model, with help from Anthropic, to search for additional vulnerabilities shortly before Mythos was paused. We plan to share more details about this review and its findings in a follow-up blog post.

So far, no other forgery vulnerabilities have been found. The high level of expertise, effort, and advanced AI-assisted analysis involved in this search gives us greater confidence that no similar vulnerabilities remain undiscovered.

Furthermore, we are working with projects like the Tachyon Project to provide additional assurances that no more forgery vulnerabilities exist in Zcash. We will elaborate on this further in future blog posts as well.

Conclusion

The Orchard vulnerability presents four important questions: Was the vulnerability exploited? Can legitimate Orchard funds be recovered? Can users verify the Zcash supply hasn't been inflated? And are there other undiscovered forgery vulnerabilities?

We believe it's unlikely to have been exploited, so legitimate Orchard funds are recoverable, and the current Zcash supply is safe. Based on ongoing reviews by multiple independent researchers and teams, we are also growing more confident that no other undiscovered forgery vulnerabilities exist.

However, users currently cannot verify the security of the Zcash supply, and they should not have to rely on our assessment—or anyone else's.

The proposed network upgrade solves this problem. By sealing the Orchard pool, it restores users' ability to independently verify the security of the Zcash supply. Users no longer need to judge whether forgery occurred to verify that the protocol's supply limits are being honored.

Leituras Relacionadas

The Value Distribution of Stablecoins

**Summary: The Value Distribution of Stablecoins** The article argues that stablecoins are evolving from mere trading tools into broader channels for dollar access. It divides the stablecoin ecosystem into four layers to analyze how value is distributed: 1. **Issuance Layer:** Mints stablecoins, holds reserve assets, and captures the spread between reserve yield and user costs (e.g., Tether, Circle). This layer currently earns the largest profit margin. 2. **Infrastructure Layer:** Connects stablecoins to the traditional financial system, handling fiat on/off-ramps, banking integration, compliance (KYC/AML), and asset management (e.g., Bridge, BVNK). This is the "unglamorous" but critical work, building the essential bridges between crypto and real-world finance. 3. **Acquiring/Distribution Layer:** Integrates stablecoins into merchant systems, manages payment flows, and provides enterprise financial software (e.g., Stripe, Coinbase). They act as the access point for businesses. 4. **Application Layer:** The end-users and businesses that ultimately use stablecoins for payments, settlements, or as a store of value. They benefit from convenience but have little pricing power. The core thesis is that while the issuance layer currently dominates profits, the often-overlooked **infrastructure layer holds significant long-term potential**. The real challenge and barrier to mass adoption is not the on-chain transfer of stablecoins (which is simple), but the complex "last mile" integration into existing business workflows, banking systems, and regulatory frameworks across different countries. Companies in this layer are currently in a "land grab" phase, investing heavily to build networks, secure bank partnerships, and establish compliance pathways. While their position is currently pressured by the profitable issuers above and distribution platforms below, the article suggests that if stablecoins become a default financial rail for businesses, the infrastructure providers who have done the hard work of integration will ultimately gain strong pricing power and become entrenched, essential players.

marsbitHá 1h

The Value Distribution of Stablecoins

marsbitHá 1h

The Value Distribution of Stablecoins

The Value Distribution of Stablecoins The article argues that stablecoins are evolving from a mere trading tool into a broad "dollar channel." It analyzes the industry's value chain through four layers: 1. **Issuance Layer (e.g., Tether, Circle):** The top layer that mints stablecoins, holds reserve assets, and captures the thickest interest rate spread. 2. **Infrastructure Layer (e.g., Bridge, BVNK):** Connects stablecoins to the traditional financial system, handling critical but complex "dirty work" like fiat on/off-ramps, banking integration, compliance (KYC/AML), and cross-border settlement. 3. **Acquiring/Distribution Layer (e.g., Stripe, Coinbase):** Embeds stablecoins into merchant systems, manages payment flows, and integrates with enterprise software. 4. **Application Layer:** End-users and businesses that ultimately use stablecoins for payments, settlement, or storing value. The author posits that while the issuance layer currently captures the most profit, the most overlooked and potentially critical layer is infrastructure. The core challenge for stablecoin adoption isn't the on-chain transfer (which is simple), but bridging the gap between blockchain and the real-world financial system. This involves solving practical problems for businesses: fiat conversion, reconciliation, tax handling, and user onboarding. Infrastructure companies are currently in a difficult "land-grab" phase—building networks, securing banking relationships, and achieving compliance country-by-country. They face pressure from both the profitable issuance layer above and distribution platforms below. However, the author suggests this layer is building a crucial moat. Once stablecoins become a default business rail, the infrastructure players who have done the hard work of integration may gain significant, durable value and pricing power.

链捕手Há 1h

The Value Distribution of Stablecoins

链捕手Há 1h

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

Nvidia's recent announcement to issue at least $20 billion in senior notes, despite holding a strong cash position with over $48.6 billion in free cash flow last quarter, is not a sign of financial need. Instead, it represents a strategic move to leverage its high credit rating (recently upgraded to AA by S&P) to secure low-cost, long-term debt. This capital will support long-term AI infrastructure investments, data centers, R&D, supply chain prepayments, and strategic investments, while allowing the company to continue aggressive shareholder returns through stock buybacks and dividends. The decision reflects a mature capital management strategy: using debt to finance long-term growth assets is more efficient and less dilutive to shareholders than equity financing. It signals that Nvidia, like other tech giants (Alphabet, Meta, Amazon), is entering a new phase of heavy AI capital expenditure, shifting from a pure growth story to a story about capital allocation, credit strength, and long-term ecosystem positioning. The key question for investors is whether Nvidia can maintain its high cash flow generation and ensure that returns from these AI investments justify the cost of capital over the long term. The bond issuance amplifies its expansion capabilities but also ties its valuation more closely to the broader AI investment cycle's sustainability and profitability.

marsbitHá 2h

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

marsbitHá 2h

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

Liberland's congress has voted to remove Technology Secretary Dorian Stern Vukotić, following a resolution accusing him of attempting to hijack the Liberland.org domain, removing administrative multisig protections, blocking the president from voting, and launching unauthorized tokens. The incident serves as a case study in blockchain governance, highlighting risks that go beyond smart contracts to include control over domains, admin keys, and off-chain authority. For the crypto industry, it underscores the need to scrutinize decentralization claims against operational realities, where a small group can still compromise governance. The story reflects a broader market shift where infrastructure security and governance are becoming as critical as price action. Editorial framing should treat the development as a verified information signal about governance risks, avoiding overstatement of Liberland's legal status and leaving room for follow-up evidence.

bitcoinistHá 2h

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

bitcoinistHá 2h

How to Do Research Well: Deliberately Practice the Real Skills That Matter

No one truly teaches you how to do research. You're often given a desk, a pre-selected problem, and vague instructions to "create something new." Consequently, many people reverse-engineer the job based on visible outputs—papers, posts, announcements—learning only how to *appear* like a researcher rather than how to *become* one. True research capability is built from stacking small, trainable skills, nearly all of which can be developed through deliberate practice. **Pick Your Own Problem:** Most researchers absorb problems from advisors or trends, lacking the underlying reasoning. Choosing a problem you genuinely care about, as John Schulman advises, leads to original work. Develop "taste" like a muscle: predict experiment outcomes, guess paper results from methods, and track which findings remain important over time. **Upgrade Your Inputs:** Relying on shared reading lists (arXiv hot lists, filtered group chats) leads to unoriginal conclusions. Undervalued old literature often holds crucial insights (e.g., MoE, LSTM, backpropagation). Richard Sutton's "The Bitter Lesson" or Claude Shannon's 1952 talk on creative thinking are more predictive than lengthy modern surveys. Breadth matters as much as depth: draw from neuroscience, mechanism design, hardware knowledge, and honest statistics. Read papers directly, especially appendices and limitations sections. **Write Everything Down:** As Paul Graham noted, writing exposes flaws in seemingly mature ideas. Writing is the cheapest defense against self-deception. Following Feynman's principle, Darwin programmatically wrote down facts contradicting his theory to combat memory bias. Maintain a detailed log of hypotheses, setups, predictions, results, and updated understandings. Reviewing past logs fosters essential humility.

marsbitHá 4h

How to Do Research Well: Deliberately Practice the Real Skills That Matter

marsbitHá 4h

Trading

Spot
Futuros
活动图片

Categorias popularesright-arrow

Etiquetas Popularesright-arrow