upgrade. This upgrade implements Halo, a type of cryptography technology invented by the ECC, to remove the need for complex generation ceremonies and is intended to further the development of zero-knowledge proof cryptography. Additionally, in June 2026, a security researcher engaged by ZODL disclosed a critical vulnerability affecting one of the shielded pools, called Orchard, that prior to remediation could have been exploited to create counterfeit ZEC within the Orchard pool. Although the vulnerability was remediated through an emergency network upgrade and Zcash developers stated that they believe it is unlikely that the vulnerability was exploited, due to the privacy-preserving nature of shielded pool transactions, there was no cryptographic method to determine conclusively whether the vulnerability had been exploited prior to remediation. Following the disclosure of the vulnerability, the market price of ZEC declined by approximately 50%, although it has since substantially recovered. Notwithstanding their view that exploitation was unlikely, on July 28, 2026, Zcash developers implemented an additional network upgrade, called “Ironwood,” intended to mitigate the risk of similar vulnerabilities. Ironwood retired the Orchard pool and introduced a new shielded pool, permitting ZEC to be withdrawn from Orchard only through a “turnstile” mechanism that caps total withdrawals at the amount verifiably deposited, thereby preventing any counterfeit ZEC that may exist within Orchard from being removed. Zcash is a derivative of Bitcoin that was created in October 28, 2016 by a team of scientists, advisers, and engineers of the ECC. Rather than being a fork of the Bitcoin Network, in which Bitcoin owners would receive a proportionate number of ZEC tokens following the fork, Zcash is what is referred to as a “clone,” in which the codebase of Bitcoin was copied in order to produce the protocols underlying the Zcash network, with the principal difference between the networks being the privacy-preserving features of Zcash created by the founders of Zcash. Because Zcash was a clone and not a fork, holders of Bitcoin did not receive any ZEC as part of the clone. Since its founding, ECC has aimed to enhance the uses of ZEC and researched the development of the scalability and usability of the network. In this role, ECC historically supported the development of ZEC by, among other things, reviewing and implementing upgrades that become part of the main implementation of ZEC. On January 7, 2026, former ECC Chief Executive Officer Josh Swihart stated on social media that on the previous day, “the entire ECC team left after being constructively discharged.” In or about January 2026, Mr. Swihart and the former ECC engineering and product team formed a new entity, the ZODL, which has since continued the development of core Zcash software and protocol upgrades previously undertaken by ECC. ECC continues to exist as an entity overseen by its nonprofit board, but the personnel who historically performed core development work now do so through ZODL. Like ECC, ZODL does not control the Zcash Network, and any updates it offers to the ZEC protocol may be implemented or ignored by the public. This is analogous to the Bitcoin Network, in which a group of core developers, known as Bitcoin Core, have ultimate control over reviewing and implementing upgrades into Bitcoin Core, the most commonly used Bitcoin client. Although Zcash is thus very similar to Bitcoin, there are several key differences between the Zcash Network and the Bitcoin Network. These differences include a block generation time of approximately 1.3 minutes for ZEC, as compared to 10 minutes for Bitcoin. Like Bitcoin, Zcash has a cap on the number of coins that will be created of 21 million. However, although all ZEC is mined, the Zcash code is designed such that, of the 21 million ZEC to be mined, 2.1 million ZEC were automatically allocated to the founders, employees and advisers of ECC, as well as to certain investors in ECC. This allocation is called the “Founders’ Reward.” To effect this, the Zcash code provides that for the first four years of ZEC’s existence, 80% of newly created ZEC went to miners, while 20% of newly created ZEC was allocated to the Founders’ Reward. After the first four years, the Founders’ Reward would be fully paid, and 100% of newly created ZEC would go to miners. The result was that 10% of ZEC’s fully diluted supply was automatically distributed to holders who themselves were not responsible for its mining. In June 2019, in light of the expected expiration of the Founders’ Reward in November 2020, Zooko Wilcox, founder of ECC, expressed his support for a Dev Fund (as defined below) that, like the original Founders’ Reward, would allocate ZEC from “future block rewards for core support functions such as software development, user support, business development, regulatory and government outreach, security auditing and monitoring, educational and marketing initiatives and new protocol development.” The Zcash Foundation (the “Foundation”) conducted several rounds of community polling regarding whether and how a Dev Fund should be implemented. On February 14, 2020, the Foundation announced that community consensus and agreement had been reached on a final proposal, named “ZIP 1014,” which included a 20% block reward allocation for four years, split into the following three slices (collectively, the “Dev Fund”): 35% (7% of the total mining reward) for ECC;
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