Galaxy Research Report: What’s driving Zcash’s (the “doomsday car”) price increase? | Bee Network

Galaxy Research Report: What’s driving Zcash’s (the “doomsday car”) price increase? | Bee Network Login 热门新闻 备忘录启动板 人工智能代理 德西 TopChainExplorer 给 Newbee 100 倍金币 蜜蜂游戏 重要网站 必备应用程序 加密货币名人 德平 新手必备 陷阱探测器 基本工具 高级网站 交流 NFT 工具 你好、, 签出 Web3 宇宙 游戏 DApp 蜂巢 成长平台 生态 搜索 英语 充值金币 登录 下载 Web3 大学 游戏 DApp 蜂巢 生态 家•分析•Galaxy Research Report: What’s driving Zcash’s (the “doomsday car”) price increase? Galaxy Research Report: What’s driving Zcash’s (the “doomsday car”) price increase?分析4 个月前更新怀亚特 19,535 8 Original author: Will Owens, Galaxy

Original translation by: AididiaoJP, Forest News

The word “加密currency” literally means “hidden” or “secret” currency. However, for most of its development, privacy issues have been largely ignored by the industry. Only recently has this begun to change.

In recent weeks, the privacy narrative has once again come into focus. Zcash (ZEC), one of the oldest and most well-known privacy coins, has surged over 700% since September, seemingly turning everyone in the crypto community into a privacy expert overnight. However, some prominent figures in the Bitcoin space have criticized this surge as “manipulated,” warning buyers that they will ultimately become “bagholders.” Economist Lyn Alden has cautioned investors against falling into the trap of “pump and dump.”

But investor Naval Ravikant quickly countered, offering a fundamental reason for Zcash: “Transparent cryptocurrencies cannot survive under heavy government crackdowns.”

Don’t forget that Satoshi Nakamoto, the anonymous founder of Bitcoin, acknowledged the privacy limitations of the Bitcoin network back in his 2008 white paper.

While CoinJoin services like Samourai and Wasabi were once popular on Bitcoin, they now face increasing regulatory pressure. Samourai effectively shut down after its founder was arrested, and Wasabi also stopped its CoinJoin function and blocked US users in June 2024 due to regulatory concerns.

Payjoin, a simple tool that breaks the “multiple inputs belong to the same person” inference, is gaining attention, but it still requires user interaction. Satoshi Nakamoto, in the previous quote, pointed out a broader problem arising from Bitcoin’s transparency. Zcash, as a fork of Bitcoin, allows users to use zero-knowledge proofs to shield transactions, directly addressing the privacy limitations mentioned by Nakamoto.

Satoshi Nakamoto also acknowledged Bitcoin’s privacy limitations in a forum post.

Key points After years of silence, ZEC has surged about eight times in the past month, far outperforming the broader market, forcing people to seriously re-examine “privacy features”.

This discussion revived the early debates surrounding Bitcoin regarding “privacy” versus “regulatory realities.”

Zcash’s market capitalization has surpassed that of Monero.

• The user experience of Zcash has been improved (e.g., Zashi Wallet).

• Cross-chain intent channels lower the operational threshold (NEAR Intents).

The anonymous set is expanding.

For the first time, more than 30% of the ZEC supply is stored in a shielded liquidity pool.

However, compared to Bitcoin, Zcash still has a very small number of full nodes.

Development History and Network Upgrades Zcash originated from academic research in 2013 when cryptographers at Johns Hopkins University developed the Zerocoin protocol. To improve efficiency, this protocol later evolved into Zerocash, and was finally launched in 2016 as a fork of Bitcoin by cypherpunk cynico Zooko Wilcox and his Electric Coin Company. Its goal was simple: to retain Bitcoin’s monetary characteristics while fixing its most frequently cited design flaw (which Satoshi Nakamoto himself acknowledged): the lack of transaction privacy.

Unlike Bitcoin, where all transactions are publicly visible on-chain, Zcash uses a zero-knowledge proof technology called zk-SNARKs. This allows users to prove a transaction’s validity without revealing the sender, receiver, or amount. While Monero launched earlier and uses technologies like ring signatures to protect privacy, Zcash is the first mainstream blockchain to implement zk-SNARKs at the protocol layer.

Zcash employs an on-chain funding model, allocating a portion of block rewards to community-led projects rather than specific organizations. According to the ZIP 1016 proposal, 8% of the block rewards go to the Zcash Community Fund, and 12% goes to a fund managed by token holders through voting. Neither the Electric Coin Company nor the Zcash Foundation automatically receives a share; they also need to apply for funding through these mechanisms.

Zcash has undergone multiple network upgrades:

• Sapling (2018): Significantly improved the efficiency of blocking transactions.

Heartwood (2020): Introduced shielded miner rewards, allowing miners to receive block rewards privately.

• Canopy (2020): With its first halving, it completely overhauled its funding model, replacing the original founder rewards with a four-year development fund jointly managed by ECC, the Zcash Foundation, and community grants.

• NU5 / Orchard (2022): This is the most important milestone since its launch, replacing the complex trusted setup ceremony with Halo 2 recursive proofs and adding unified addresses to simplify privacy operations. The Orchard shield pool was launched.

• NU6 (2024): Implemented an in-protocol fund lock-in to manage the treasury in a decentralized manner, improving the transparency of the use of development funds.

Next, the protocol is preparing for the NU7 upgrade.

市场 Performance and Current Status For most of the time, ZEC has underperformed in the market, not only lagging behind BTC but also being overshadowed by Monero. Monero provides basic privacy to users by default, but it relies on a small set of decoy anonymity. Its ring signature design mixes the real input with 15 decoys, and this moderate set of anonymity has been successfully deanonymized in some studies.

Regulators tend to scrutinize Monero more closely because privacy is mandatory by default. In 2020, the IRS even hired companies like Chainalysis to study methods for tracking Monero transactions. In contrast, Zcash achieves optional privacy through zk-SNARKs, fully encrypting data and providing a larger set of anonymity when using masked addresses.

This dual-mode design also makes users more prone to operational security errors (such as misusing transparent addresses), but when used correctly, Zcash’s cryptography provides substantially stronger and mathematically more secure privacy. Furthermore, Zcash’s privacy layer is quantum resistant, unlike Monero’s current ring signature scheme (whose developers have acknowledged this issue and plan to fix it in a future upgrade).

The price trend of ZEC today tells a completely different story.

ZEC price trend over the past year

(This section originally contained price chart explanations: ZEC price over the past year; ZEC vs. XMR price comparison; ZEC/BTC daily exchange rate chart.)

Technical details Zcash follows Bitcoin’s monetary model: a fixed supply of 21 million ZEC, proof-of-work consensus, and a halving approximately every four years. It uses the Equihash algorithm, designed to be more resistant to ASIC centralization than Bitcoin’s SHA-256. Block time is approximately 75 seconds, about 8 times faster than Bitcoin. Zcash halves approximately every four years, with the next halving expected in November 2028, at which time the block reward will drop to 0.78125 ZEC.

Zcash has two types of addresses:

• Transparent Address: Functions the same as Bitcoin, with balances and transfers publicly visible.

• Hidden Addresses: Using zk-SNARKs hides the parties and amount of a transaction, while proving that no currency was created out of thin air.

When users transfer funds between blocked addresses, the network verifies a cryptographic proof, not the transaction details. This proof states, “I have the right to spend these coins, and the calculations are correct,” without revealing any unnecessary information. The core of privacy lies in sharing only the minimum information necessary to establish trust.

The larger the shielded liquidity pool, the more difficult it is to trace the flow of funds. This is why it is so important that the size of shielded pools has recently exceeded 30% of the total supply. The largest shielded pool is Orchard, which launched on May 31, 2022. It replaced the old pool, adopted the Halo 2 proof system that does not require trusted setup, and introduced unified addresses to simplify the user experience.

Currently, the Orchard shield pool contains over 4 million ZECs (approximately 25% of the circulating supply), representing the vast majority of the total approximately 4.9 million shielded ZECs.

(This section originally contained a chart explaining the supply of shielded materials: the supply of shielded materials is increasing.)

Transparent supply has decreased by nearly 3 million ZEC, from about 14 million at the beginning of the year to about 11.4 million currently (about 70% of the total supply).

(This was originally a chart explanation of transparent supply: Transparent supply is decreasing.)

Nodes and Future Development The Zcash network currently has around 100-120 full nodes, up from a low of around 60 earlier this year. However, this is still far fewer than Bitcoin (around 24,000) or Monero (around 4,000), mainly because running Zcash nodes is much more resource-intensive (blocking transaction verification is more resource-intensive), and the multi-pool architecture and frequent network upgrades also increase complexity and maintenance costs.

Looking ahead, developer Sean Bowe is advancing “Project Tachyon,” an extension solution that significantly improves shielded transaction throughput by refactoring synchronization and storage methods. Bowe claims that Tachyon can achieve a performance leap without requiring a new protocol, solving all bottlenecks with relatively simple cryptography. In a sense, Tachyon is to Zcash what Firecancer is to Solana.

What are NEAR Intents? NEAR Intents is a cross-chain coordination layer built on the NEAR protocol. It allows users to express intents without manually operating cross-chain bridges, exchanges, or wallets.

The intent executor automatically allocates liquidity, executes exchanges, and completes cross-chain settlements behind the scenes.

For Zcash, integrating Intents means users can easily transfer assets from a transparent chain to a Zcash shielded pool and back without exposing every step. This allows traders or institutions to move from a transparent chain (such as Ethereum) to Zcash to restore privacy, conduct shielded transactions, and then (if needed) return to the original chain, with no direct link between the two addresses.

The Zashi wallet (ECC official wallet and the most commonly used Zcash wallet) integrates NEAR Intents, abstracting away the technical friction of cross-chain and shielding for users. Zcash natively supports viewing keys, which can be used for auditing or compliance purposes to selectively disclose shielded transaction details. These features make Zcash’s privacy both user-friendly and institutionally compliant.

Why did it erupt at this moment? Zcash’s sudden surge appears to reflect a shift within the crypto culture. As a16z’s “2025 State of Crypto Report” points out, there has been a recent surge in Google searches for privacy-related terms.

Many Bitcoin critics lament its “institutionalization,” arguing that it’s dominated by ETFs and centralized custodians. Bitcoin itself has always been transparent; ETFs merely add intermediaries and don’t alter its inherent transparency. In contrast, Zcash proponents position it as a “crypto Bitcoin,” a return to the cypherpunk spirit that resonates in today’s environment of ubiquitous surveillance, from Chainalysis to on-chain detectives. Zcash’s rise has reopened the old rift between “privacy is a right” and “transparency is regulation.”

Zcash is gaining more attention as its privacy technology stack finally reaches consumer-grade availability (the Zashi wallet, launched in March 2024, simplifies the blocking process) and the blocking supply continues to grow. More ZEC being blocked means a larger anonymity set, and Zcash as a whole becomes more private.

Another clear sign that Zcash is “back” is the launch of ZEC perpetual contracts on Hyperliquid a few weeks ago, allowing traders to leverage their positions in the privacy coin on the popular decentralized exchange. This indicates strong market demand for this long-forgotten gem. The introduction of perpetual contracts increased ZEC market liquidity, with open interest reaching approximately $115 million at one point, and also exacerbated spot price volatility.

From a technical fundamentals perspective, Zcash didn’t undergo a dramatic overnight transformation. However, market perception has shifted. This surge is driven by both sustained support from top figures in the crypto community and a renewed recognition that privacy is crucial for permissionless currencies.

Regardless of whether ZEC’s price strength can be sustained, this market rotation has successfully forced the market to reassess the value of privacy.

After years of dormancy, this surge has brought Zcash back into the spotlight. Whether it can translate this speculative momentum into sustained network growth remains to be seen. But the renewed focus on privacy reveals a deeper truth: in an increasingly transparent financial system, the ability to transact privately is once again being seen as a valuable feature.

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