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Home » Zcash was rumored to have stopped working
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Zcash was rumored to have stopped working

June 4, 20265 Mins Read
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Zcash was rumored to have stopped working
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Zcash became the subject of a brief market scare after block explorers appeared to show that the privacy-focused blockchain had stopped producing blocks for several hours.

By the time developers and infrastructure providers pushed back on the claim, the market had already moved in the opposite direction. ZEC was recently trading near $620, up about 10% over the session, while Bitcoin and Ethereum dropped more than 4%, according to CryptoSlate’s data.

The rally turned Zcash into a rare winner amid a broader crypto sell-off tied to renewed geopolitical stress, weaker digital-asset sentiment, and forced liquidations of leveraged positions.

The episode also gave traders a clearer test of what had initially looked like a damaging technical crisis: Zcash did not go offline, but part of its privacy system was deliberately shut down to carry out “the most ambitious network upgrade in Zcash’s history.”

Zcash’s outage rumor masked a narrower problem

The confusion started after Zcash completed an emergency network upgrade to restore Orchard, the shielded pool that underpins the network’s most advanced privacy transactions.

Some block explorers appeared to be stale after the upgrade, giving the impression that the blockchain had stopped.

Infrastructure operators later said those explorers were catching up or resyncing after their nodes upgraded, while miners continued to produce blocks, and transactions continued to be confirmed.

ZODL founder Josh Swihart wrote on X:

“Zcash was never down. Many block explorers have been using unpatched nodes. Happens with every network update.”

That distinction mattered. Zcash was not dealing with a total chain halt. Instead, developers had temporarily disabled Orchard transactions through an emergency soft fork while they prepared a permanent fix for a soundness vulnerability in the Orchard zero-knowledge proof circuit.

The Zcash Foundation said the vulnerability was discovered May 29 by independent security researcher Taylor Hornby, who was conducting protocol security research for Shielded Labs.

ZODL engineers confirmed the report within hours and began preparing a confidential response with miners, exchanges, infrastructure providers, and other network participants.

The first stage of the response was activated at block height 3,363,426 and rejected Orchard-containing transactions and blocks.

The second stage came with the NU6.2 hard fork, which activated at block height 3,364,600 early Wednesday and re-enabled Orchard using a corrected circuit.

The Foundation urged node operators to upgrade to Zebra 5.0.0, the software release that follows the new network rules.

Why Orchard became the center of the story

Orchard is not a peripheral part of Zcash. It is the network’s newest shielded pool and was introduced with the NU5 upgrade in 2022.

Unlike earlier Zcash privacy pools, Orchard uses Halo 2 and does not require a trusted setup, a long-running concern in the design of privacy-preserving cryptocurrencies. The Zcash Foundation described Orchard as the centerpiece of the network’s privacy architecture.

The bug affected the soundness of the Orchard circuit. In plain terms, soundness is the rule that a system should accept only valid transactions and valid state changes. A soundness flaw can allow a system to accept something it should reject.

In this case, the Foundation said successful exploitation could have allowed double-spending inside Orchard. That would have been serious for the shielded pool’s accounting, even though the issue did not allow an attacker to inflate Zcash’s total supply.

That limit is important. Zcash’s “turnstile” mechanism tracks how value moves among its pools, including Sprout, Sapling, Orchard, transparent addresses, and lockbox balances.

The Foundation said those checks confirmed the 21 million ZEC supply cap remained intact, with no evidence of unauthorized value creation.

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The vulnerability also did not affect user privacy, according to the Foundation. Sapling and transparent transactions continued operating while Orchard was suspended.

The fix required a fork, not a routine patch

The emergency response unfolded in two steps because a normal software patch would not have been enough.

Developers first used a soft fork to disable Orchard while keeping details of the vulnerability private. A direct public patch could have exposed enough information for attackers to understand the flaw before the network had completed a full repair.

The permanent fix required a hard fork because the bug was inside the zero-knowledge proof circuit. Repairing that kind of flaw requires changing the pinned verifying key that the network uses to validate Orchard proofs. That kind of consensus-level change cannot be handled through ordinary node software alone.

The Zcash Foundation said the incident was only the second security-driven protocol upgrade in Zcash’s history since the network launched in 2016.

The coordination was unusually compressed. Private outreach to miners and exchanges began May 31.

An initial soft-fork activation attempt encountered deployment issues, prompting engineers to prepare a second patch. The soft fork then activated around 02:00 UTC on June 2, and the NU6.2 hard fork followed early June 3.

Market turns the scare into a resilience trade

The price reaction was striking because the disclosure landed during a weak session for digital assets.

Bitcoin recently traded around $65,900, while ETH was near $1,832, down about 4%, according to CryptoSlate’s data. ZEC, by contrast, traded near $620, after reaching an intraday high above $642.

The broader market was already under pressure from renewed geopolitical tensions and oil market concerns. Reuters reported Wednesday that global markets weakened as conflict in the Middle East escalated and Brent crude approached $100 a barrel.

Crypto-specific pressure added to the move. Recent market reports showed that the Bitcoin price decline also triggered more than $1 billion in leveraged crypto positions liquidated during the sell-off, with long trades taking most of the damage.

Against that backdrop, ZEC’s rise suggested traders were not pricing the Orchard bug as a lasting impairment to the network. Instead, the market appeared to focus on the fact that the flaw was found, contained, and fixed before any known exploitation.

Moreover, the price movement showed how much interest the market had in the privacy-focused crypto token.

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