Zcash’s price has rebounded about 50% from last week’s lows following a proposal for new network upgrades to address concerns raised by a recently revealed vulnerability that allows the creation of counterfeit tokens.
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ZEC price rebounded after Zooko Wilcox proposed an Ironwood upgrade to validate Zcash’s circulating supply. Ironwood is tracking a patched vulnerability that could allow unlimited counterfeit ZEC creation. Developers previously rolled out an emergency network upgrade, including the NU6.2 hard fork, to fix this flaw.
According to Zcash founder Zuko Wilcox, the proposed Ironwood upgrade will provide users with a way to verify the circulating supply of their cryptocurrencies by summing the balances held across active pools after the upgrade is activated.
The proposal emerged days after Shielded Labs revealed a critical flaw in Zcash’s Orchard shielded pool, Zcash’s main privacy-focused transaction system. Following the disclosure, Zcash’s market capitalization plummeted from a peak of $10.48 billion to about $5 billion, before recovering to nearly $7.5 billion, according to data from CoinGecko.
In a post on X, Wilcox said Ironwood would allow users to independently verify whether the circulating supply is correct. He added that the upgrade introduces new locations where users can hold shielded ZEC, places limits on transactions that may involve counterfeit coins, and incorporates measures such as AI-assisted security audits to harden the codebase.
Address vulnerabilities with emergency upgrades
According to details released by Zcash Open Development Lab founder Josh Swihart, developers had already deployed a two-step response before the vulnerability was made public.
Swihart said the first step included a soft fork that temporarily disabled Orchard trading. Keeping technical details private during this period reduced the potential for exploitation while developers worked on a permanent fix.
Swihart said the second upgrade, known as the NU6.2 hard fork, went into effect on June 3 and resolved the underlying issue before Orchard transactions were restored.
Shielded Labs says this flaw could theoretically allow an attacker to mint an unlimited number of counterfeit ZECs. At the same time, the organization acknowledged that there is no cryptographic evidence to support that the vulnerability has never been used, but said it believes it is unlikely that it has been exploited before.
Because Orchard powers Zcash’s primary shielded transaction system through zero-knowledge proofs, the inability to conclusively verify whether the flaw was exploited became a major concern following the disclosure.
Ironwood aims to restore confidence in supply
Against this background, Wilcox proposed Ironwood as a long-term solution focused on increasing transparency around network provisioning while maintaining privacy features.
He pointed out that in his proposal, users would be able to check the circulating amount of ZEC immediately after activation by aggregating the balances of active pools.
Wilcox said the upgrade schedule remains unclear and will depend on further development work and community discussion.
Although he did not provide conclusive evidence, Wilcox’s post also reiterated his belief that this vulnerability had never been exploited.
Wilcox said multiple organizations are involved in development activities related to the proposal, including the Zcash Foundation, Tachyon Group, Valar Group, and Zcash Open Development Lab.
Market sentiment improved following both the emergency amendment and the Ironwood proposal. Zcash (ZEC) rose about 6% in 24 hours to about $445, according to data from crypto.news, and its market capitalization has significantly recovered from the levels recorded immediately after the vulnerability was disclosed.
