F2Pool co-founder Chun Wang criticized Zcash on Sept. 8 as ZEC traded near $1,130 following a rally that carried the privacy coin into the cryptocurrency market’s top ten.
Wang, who posts under the name Chun at @satofishi, called the move a “narrative bid.” He argued that Zcash’s funding history, optional privacy model, governance disputes and recently disclosed Orchard vulnerability did not justify its valuation.
His comments are opinions rather than evidence of wrongdoing. Several underlying events are documented, but some of Wang’s conclusions omit later changes to Zcash’s funding and privacy systems.
ZEC was trading around $1,130 when this report was prepared, down nearly 7% over 24 hours. CoinMarketCap placed its capitalization near $19 billion and ranked it tenth, while CoinGecko placed it ninth. Rankings can differ because platforms use different supply and asset-classification methods.
The token remained more than 2,300% higher than one year earlier, according to market data cited in coverage of Zcash’s move above $1,000. Its rally accelerated after Grayscale converted its Zcash Trust into a U.S.-listed spot exchange-traded fund in August.
Wang said Zcash did not have a fair launch because 20% of its early block rewards went to founders, employees, advisers and investors.
The underlying percentage is correct. During Zcash’s first four years, miners received 80% of each block subsidy, while the Founders’ Reward received 20%. Because that arrangement covered only the first issuance period, it represented 2.1 million ZEC, or 10% of the planned 21 million maximum supply.
The recipients included founders, investors, employees and organizations supporting development. The 2.1 million ZEC did not go exclusively to Electric Coin Company, a distinction noted in historical community discussions.
The Founders’ Reward ended with the Canopy upgrade in November 2020. Zcash then introduced a development fund that also received 20% of block rewards between the first and second halvings.
Under that arrangement, 7% went to Electric Coin Company, 5% to the Zcash Foundation and 8% to Major Grants, later renamed Zcash Community Grants. Miners continued receiving 80%.
That development fund added a maximum of approximately 1.05 million ZEC, equal to 5% of the eventual supply. Combined with the original Founders’ Reward, the two mechanisms directed up to 15% of the maximum supply toward founders, investors and different development recipients across eight years.
Wang’s description becomes less precise when applied to the present system. Since November 2024, Zcash has continued allocating 20% of block rewards for ecosystem funding, but the recipients changed.
The official Zcash network page states that 8% goes to Zcash Community Grants and 12% entered a protocol-tracked lockbox. Direct payments to Electric Coin Company and the Zcash Foundation ended under that structure.
The lockbox had no immediate withdrawal mechanism when introduced. Its purpose was to hold funds until the community agreed on a decentralized distribution process. Therefore, describing the current allocation as a direct continuing payment to “a company and its backers” would be inaccurate.
Whether any protocol-funded development mechanism is appropriate remains a policy judgment. Bitcoin generally directs its subsidy to miners, while Zcash chose to reserve part of issuance for software development and ecosystem grants.
Wang also cited the January departure of the Electric Coin Company team following a dispute with Bootstrap, the U.S. nonprofit that governed ECC.
The departure occurred on Jan. 7. Then-CEO Josh Swihart said the entire team had been “constructively discharged” after employment conditions changed. He accused a majority of Bootstrap’s board of acting against the company’s mission.
Bootstrap disputed that framing. Its board said the disagreement concerned nonprofit law, fiduciary responsibilities and plans involving the Zashi wallet and outside investment.
The board argued that assets held by a public-benefit nonprofit could not be transferred in a way that created improper private benefits. No court has ruled on either side’s description of the dispute.
The former ECC employees did not abandon Zcash development. They announced a new company, Zcash Open Development Lab, and continued working on the protocol and privacy-related products.
Zcash founder Zooko Wilcox defended the integrity of the Bootstrap directors and said the conflict did not affect the protocol. The blockchain continued operating because miners, nodes and multiple development groups did not depend on ECC’s corporate existence.
The episode still exposed a governance divide among organizations responsible for core software, funding, trademarks and wallets. Wang’s statement that the disagreement proved Zcash was “broken at the top” is his interpretation, not an established technical finding.
ZEC fell sharply when the split became public in January. That verified price reaction showed that traders considered the developer dispute material, even though the blockchain itself did not halt.
Wang’s strongest factual criticism concerns a vulnerability in Orchard, Zcash’s main shielded pool between May 2022 and July 2026.
Security researcher Taylor Hornby discovered the flaw in May. The error involved an under-constrained element within Orchard’s cryptographic circuit. In theory, an attacker could have supplied invalid inputs and created counterfeit ZEC that ordinary verification would accept.
Developers deployed an emergency fix on June 1. They reported finding no evidence that anyone had exploited the vulnerability.
However, the privacy properties of Orchard prevent developers from cryptographically proving that no counterfeit ZEC was created before the patch. The flaw existed from Orchard’s May 2022 activation until the emergency response, according to the technical disclosure.
That limitation supports part of Wang’s criticism. Transparent ledgers allow observers to calculate visible supply directly. A shielded pool conceals transaction values, so its supply integrity depends on the soundness of its cryptographic rules.
The inability to prove non-exploitation is not evidence that counterfeiting occurred. It means the available evidence cannot eliminate that possibility with cryptographic certainty.
Zcash activated Ironwood at block 3,428,143 on July 28. The upgrade opened a separately tracked shielded pool and prevented Orchard from accepting new deposits or internal transfers. Orchard users could still withdraw funds.
Ironwood introduced an accounting checkpoint that prevents more ZEC from leaving Orchard than entered it. Any counterfeit balance remaining in the old pool therefore cannot pass freely into the new pool beyond the recorded amount.
As crypto.news reported, Ironwood replaced Orchard with a formally verified shielded design. The verification provides stronger assurance that Ironwood cannot create hidden counterfeit ZEC under its stated design assumptions.
The upgrade did not retroactively prove that Orchard was never exploited. It contained the unresolved supply risk and created a new accounting boundary for future transactions.
Wang argued that optional privacy had left most ZEC in transparent addresses for much of the network’s history. Zcash does allow both transparent and shielded transfers, unlike Monero, where privacy protections apply by default.
Exchange support, wallet limitations and the higher computing requirements of early shielded transactions slowed adoption. Transparent addresses remained easier for many services to support.
Recent data presents a more mixed picture. Shielded ZEC increased from about 8% of supply in early 2024 to approximately 30% by May 2026. Shielded transactions accounted for 59.3% of network activity at that point, according to data cited in reporting on growing shielded adoption.
Those figures do not prove that Zcash has developed a broad commercial economy. They do show that the claim that privacy remains almost unused is outdated when applied to current network activity.
Wang compared Zcash unfavorably with Solana and Hyperliquid, arguing that both networks process more visible economic activity. That comparison relies on different use cases. Solana supports general-purpose applications, while Hyperliquid focuses on trading. Zcash primarily offers payments with optional transaction privacy.
Market capitalization also does not measure protocol revenue, payment volume or user numbers directly. ZEC’s top-ten position records the market value assigned to circulating tokens, not a verified ranking of network utility.
Wang separately referred to BlockFi’s 2021 promotional payment error. BlockFi confirmed that some customers received rewards denominated in Bitcoin instead of U.S. dollars.
Some users withdrew the unexpected payments before BlockFi reversed them. The company said fewer than 100 customers withdrew incorrect awards and initially placed its remaining exposure near $10 million.
Reports showed individual account credits involving hundreds of BTC. However, BlockFi did not publicly verify Wang’s specific example of a customer receiving 701.4 BTC instead of $701.40.
The payment mistake had no operational connection to Zcash, its developers or zk-SNARK cryptography. Wang used it as an analogy for poor attention to detail, alongside his earlier disagreement with a Zcash team member over Eastern Standard Time and Eastern Daylight Time.
His six-year-old decision to block the company was personal. Confusion over time-zone terminology does not establish that Zcash’s cryptographic work was defective.
Ironwood remains the main technical response to the Orchard vulnerability. Users must move funds out of Orchard for them to enter the new shielded pool, while developers can monitor the accounting checkpoint during that migration.
The ecosystem must also determine how development funding is governed and distributed. Debate over the 20% allocation is likely to continue because it affects miners, grant recipients and ZEC holders differently.
For traders, the immediate question is whether ZEC can retain its top-ten capitalization after a steep rally. The token fell from an intraday high above $1,216 to around $1,130, showing elevated volatility.
A rally driven partly by ETF access and short liquidations does not prove Chun Wang’s criticism correct or incorrect. It shows that market price, protocol security and network use remain separate measures requiring independent evidence.
Chun Wang is a co-founder of F2Pool, one of the cryptocurrency industry’s longest-running Bitcoin mining pools. He posts on X under @satofishi.
No. The Founders’ Reward received 20% of block issuance during the first four years. That equaled 2.1 million ZEC, or 10% of the maximum supply.
Developers reported finding no evidence of exploitation. Orchard’s privacy design means they cannot prove with cryptographic certainty that hidden counterfeiting never occurred.
No. Orchard stopped accepting new deposits and internal transfers, but withdrawals remain possible through an accounting checkpoint designed to contain any excess supply.
Yes. BlockFi confirmed the general payment error in 2021. The specific 701.4 BTC example cited by Wang was not publicly
