- ZEC gained about 12% after developers said they are close to mathematically ruling out an undetectable counterfeiting bug in Zcash’s new Ironwood shielded pool.
- The Orchard flaw was a soundness bug in Zcash’s zk-SNARK circuit that could have let an attacker mint hidden ZEC, though no exploitation is believed to have occurred.
- Ironwood is set to activate in late July, with a turnstile that lets users migrate funds and helps demonstrate no counterfeiting took place.
Zcash’s ZEC token rose about 12% after developers behind Project Tachyon said they are close to formally proving that the network’s incoming Ironwood shielded pool carries no undetectable counterfeiting bug.
The Orchard flaw was a soundness bug in the zk-SNARK circuit Zcash uses to shield transactions, discovered by researcher Taylor Hornby.
A soundness bug lets a dishonest prover convince the network of a false statement, which in this case could have allowed an attacker to mint counterfeit ZEC with no on-chain trace. Because any exploitation would be invisible, developers could patch the flaw, but could not prove it had never been used.
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Formal Verification and a Turnstile
Ironwood is a fresh shielded pool based on Orchard, rebuilt with the flaw fixed. The Tachyon team said it has “primarily undertaken a comprehensive effort to formally verify Ironwood, ruling out undetectable counterfeiting bugs,” and noted that such bugs “can only exist in the specification” because implementation errors leave detectable evidence on the ledger.
To handle the coins already in the vulnerable pool, Ironwood includes a turnstile. Wallets migrate funds from Orchard into Ironwood, and disabling payments in the old pool sets an upper bound on how much ZEC can be in circulation, which helps demonstrate that no counterfeiting occurred. Developers say they believe no exploitation happened, and the turnstile is designed to turn that belief into something the network can check.
ZEC fell from about US$600 (AU$864) to roughly US$300 (AU$432) within two days of the disclosure, then recovered to around US$457 (AU$658). The token has now regained about half of what it lost.
The upgrade is being built by a group of Zcash teams, including the Zcash Open Development Lab, a spinout of former Electric Coin Company engineers that raised US$25 million (AU$36 million) this year to fund privacy work. Taylor Hornby, who found the Orchard flaw, works at Shielded Labs.
Developers say they expect to activate Ironwood at the end of July, and that the formal verification of the new pool is the work that will settle whether the counterfeiting flaw was ever a live risk.
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