The price can win a debate for ZEC, but it cannot supplement evidence for Zcash.

Written by: Daii

To conclude: This round of the increase resembles a fierce narrative reassessment, rather than a complete reassessment of Zcash's fundamentals.

The two are not a play of words. Value reassessment means the market discovers that the protocol has undervalued cash flow, user demand, security, or competitive barriers; narrative reassessment means funds are suddenly willing to pay a higher price for a scarce label. ZEC does possess one of the most striking labels in the crypto market: established, fixed supply cap, PoW, zero-knowledge proofs, privacy coin. However, a label becoming expensive does not mean that the product beneath the label has correspondingly improved.

According to the OKX market data provided, ZEC rose from $251.39 to a maximum of $1256.92, which strictly calculated is a price increase of about five times, an increase of approximately 400%. This kind of trend cannot be brushed off with the phrase "pure speculation". Continuous price reassessment indicates that the market is vying for some real scarcity. But the real question to pursue is: what funds are really purchasing, is it already realized network value, or a repackaged old story amid macro anxiety, privacy demand, and short squeeze?

My judgment is clear: currently, the evidence supports the latter.

The First Layer of Illusion: Mistaking the value of cryptography for product completeness

Zcash's technical contributions should not be dismissed. It applies zero-knowledge proofs to public blockchain payments, shielding transactions can hide the sender, receiver, and amount; upgrades like Sapling and Orchard also continuously improve proof efficiency and privacy pool design. These are not concepts written by the marketing department but are solid cryptographic engineering.

However, the mistake investors often make is to leap directly from "technologically advanced" to "the network value is at this price." In between, at least three bridges are missing: whether users actually adopt privacy features, whether the privacy pool is sufficiently large, and whether the protocol complexity is reliably managed.

Zcash has long allowed both transparent and shielded addresses to coexist. The benefit of optional privacy is compatibility with exchanges and existing infrastructure, while the cost is that user behavior can segment the anonymous pool and generate metadata from cross-pool interactions. Empirical research by Kappos et al. on early Zcash on-chain activities found that transparent transactions dominate, and certain access patterns can be clustered; Quesnelle's research also demonstrated potential correlations in amounts and timing when entering and exiting the transparent pool. It must be limited to say: these papers study early chain data and cannot be directly assumed as the real-time usage rate in 2026, nor can they prove that every shielded transaction today can be traced. What they actually prove is a mechanism problem that still holds today: privacy does not automatically exist just because it is "protocol supported", it depends on default settings, anonymous pools, and user behavior.

Therefore, stating "Zcash has strong privacy technology" is a fact; saying "holding ZEC is equivalent to buying a widely used privacy network" remains an investment proposition that needs to be proven. Without current shielded pool size, actual payment demand, active user data, and continuous fee data, this proposition cannot be certified by the currency price itself.

The Second Layer of Illusion: Writing transparency into the code is equal to fair distribution

Wang Chun's critique of the founder rewards is powerful not because "the team taking coins" is inherently guilty, but because Zcash has required the market to accept a clear value distribution system from the very beginning.

The Zcash protocol specification recorded the early block subsidy distribution: in the initial stage, some block rewards flowed to the founder's reward recipients. By design, the founder's rewards accounted for about 20% of the mining issuance in the first four years, equating to about 10% of the total supply cap of 21 million coins. After the first halving, ZIP 1014 established a new development fund arrangement, allocating 20% of the subsequent four years of block subsidies to Major Grants, Electric Coin Company, and Zcash Foundation.

These two mechanisms cannot be crudely merged into the phrase "the team always takes a cut." The receiving subjects, governance procedures, and usage are not the same. However, economic realities cannot be covered by the phrase "public goods financing": miners and coin holders have continuously borne the dilution cost of protocol development financing, and whether the financing has generated commensurate adoption, security, and ecological outcomes should naturally be scrutinized.

Professional discussions are not about whether developers should take money, but about asking four harder questions: whether the funding allocation rules are predictable, whether recipients adequately disclose, whether performance can be measured, and whether the funding can be replaced if governance fails. If any of these items are vague, the "development fund" will degrade from a long-term construction tool to a permanent rent for stakeholders.

Thus, I do not agree with labeling Zcash as a "pre-mined scam"; its distribution rules are publicly written into the protocol and are not the same as murky coin movements. But public does not equal reasonable, and compliance with rules does not equate to generating sufficient returns. Regardless of how high the market raises ZEC today, it cannot reverse-prove that the capital allocation of the past decade was effective.

The Third Layer of Illusion: No evidence proves that vulnerabilities were exploited, equals no loss

The problem description mentions that the Orchard privacy pool vulnerability lay dormant for about four years, with theoretical consequences including unauthorized issuance and mentions that privacy features make it difficult to prove whether the vulnerability was ever exploited. Here, three things must be separated: whether the vulnerability truly exists, what it theoretically allows, and whether it has actually been exploited on-chain. The evidence threshold for these three is entirely different.

Based on media reports alone, one can discuss whether the market is trading this risk, but one cannot state that "unlimited issuance has already occurred" as a fact. Conversely, one cannot declare absolute innocence in supply just because there is temporarily no public evidence. For privacy protocols, the inability to fully audit certain hidden states is itself part of the risk: transparent chains can help identify anomalies through public balance conservation, while shielded systems depend more on the correctness of the proof system, implementation code, parameter generation, and auditing processes.

This is not an original sin unique to Zcash, but an engineering cost that strong privacy systems must pay. The more complex the functionality, the larger the attack surface and the higher the verification difficulty; the longer the history does not mean that new circuits, new wallets, and new upgrades automatically inherit the security of old code. If the market wants to label the rebound after the exploitation as "value reassessment," it should at least provide a public root cause analysis, affected versions, repair timelines, independent audit conclusions, and supply integrity verification boundaries. In the absence of these materials, the most rigorous statement is: there exists reported significant protocol risk, but the current public evidence is insufficient to assert that it has been actually exploited, nor to completely rule it out.

This uncertainty should factor into valuation discounts, instead of being erased by price charts. The most absurd habit of financial markets is that when prices rise, vulnerabilities seem to fix themselves; when prices fall, even cryptographic papers seem like waste paper. Whether the protocol has been fixed and whether the bulls made money today are not the same question.

The Fourth Layer of Illusion: Short sellers' losses prove the bullish logic is correct

The report referenced in the title also states that Garrett Jin established approximately $45.11 million in ZEC shorts with three times leverage, indicating significant unrealized losses have occurred by the time of reporting and that he continues to increase his position. Even if this information is accurate, it can only indicate that the market structure is dangerous, but cannot prove which side holds the truth.

High-leverage shorts provide mechanical fuel for price increases: rising prices lead to margin pressure, reducing positions and liquidations form passive buy orders, especially when liquidity is thin. Meanwhile, short positions with unrealized losses continuing to increase may attract traders to bet on short squeezes. Thus, rising prices reinforce the narrative of the "revival of privacy coins" while simultaneously creating more demand for chasing prices and covering shorts, ultimately forming a self-reinforcing cycle.

However, a short squeeze answers "why did it rise so fast," not "what is its long-term value." Short sellers can correctly perceive the fundamentals but die due to their positions; bulls can profit from market structures yet be completely wrong about their reasons. Taking the liquidation of a large short position as a project passing a physical exam is akin to declaring a house that burned down to be of excellent quality just because the insurance company paid out.

So, what evidence qualifies for "value reassessment"?

It is not just about having another bullish candle; rather, it involves the following several events occurring simultaneously: shielded transactions and shielded balances continue to grow and are not just short-term moves; wallets and payment gateways turn security and privacy into a default experience; vulnerability disclosures create verifiable repair and audit loops; the destinations, performance, and replacement mechanisms of development funding are sufficiently transparent; the network's security budget, development activity, and actual demand can be sustained after subsidies decline.

Once these indicators are fulfilled, I will unhesitatingly acknowledge that the market has correctly anticipated ahead of time. But until then, a more accurate statement is: the narrative asset of ZEC is being reassessed, while Zcash's network value has yet to complete its evidence.

This does not mean that ZEC cannot continue to rise. Coin prices never wait until academic defenses are over to act; scarce chips, macro environment, privacy anxiety, exchange liquidity, and short positions are all enough to push it to levels that make fundamental analysts question their lives. But "it can still rise" is a trading judgment, "is it worth it" is an asset judgment, and "is the protocol reliable" is a technical and governance judgment. Merging these three into one answer is precisely the cognitive tax that story coins excel in collecting.

Wang Chun's criticism may not be entirely fair in every word, and the future events and position numbers in the reports should await verification from primary materials; but he has hit an unavoidable core: Zcash has a real technological legacy, but also carries real burdens of adoption, distribution, governance, and security. Showing only the former is preaching; showing only the latter is bearish. What valuation needs to do is require the former to generate observable outcomes while providing verifiable solutions for the latter.

The price can win a debate for ZEC, but it cannot supplement evidence for Zcash.

References

Zcash Protocol Specification — Electric Coin Company / Zcash Protocol Developers

ZIP 1014: Establishing a Dev Fund for ECC, ZF, and Major Grants — Zcash Improvement Proposals, 2019–2020

An Empirical Analysis of Anonymity in Zcash — George Kappos et al., USENIX Security 2018

On the Linkability of Zcash Transactions — Jeffrey Quesnelle, 2017

"ZEC Rises Nearly 400% in Three Months, Wang Chun Criticizes 'Dignity Not Matching Position'" — Odaily Planet Daily, 2026