Zcash (ZEC) recently surged rapidly, with its price briefly exceeding $1,250 and its market capitalization reaching approximately $19.48 billion, placing it among the top ten crypto assets by market cap. According to foreign media, in response to this rally, Chun Wang, co-founder of F2Pool, publicly stated that ZEC appears to have been driven more by market narrative than by fundamental improvements.
The upward trend is driven by multiple factors.
The report noted that ZEC has risen over 2,200% over the past year, with a 125% increase in the last 30 days. Factors driving the price upward include Grayscale’s launch of a U.S. spot Zcash ETF, tightening circulating supply, and short covering.
However, Shen Yu believes that these factors can explain why the price has risen, but they are insufficient to prove that Zcash’s network usage, user demand, or fundamentals have increased to a comparable degree. He also notes that merely having a market cap close to networks like Solana and Hyperliquid does not indicate that Zcash has achieved a similar scale of real-world adoption.
Early allocation mechanism under renewed scrutiny
Shen Yu’s skepticism is not just about the price level itself. His core argument is that ZEC’s market capitalization ranking has risen much faster than changes in network strength and usage.
He noted that Zcash initially implemented a "founders' reward" mechanism. For the first four years after the project's launch, 20% of each block reward was allocated to the founders, employees, advisors, and early investors. According to reported figures, this amounted to approximately 2.1 million ZEC, or 10% of the total supply cap of 21 million.
After this mechanism ended, a similar proportion of funds was later continued through a development fund. Zooko believes this history makes it difficult to directly compare Zcash’s mining reward model with Bitcoin’s.
Governance and security issues have been revisited.
In addition to token allocation, Shen Yu also mentioned the governance and privacy security controversies surrounding Zcash. The report noted that in the past, there were disagreements between the Electric Coin Company and the Zcash Foundation, and that the ECC team had fully departed in January 2026.
He also mentioned a vulnerability in the Orchard shielded pool. The issue was disclosed in May 2026 and is believed to have existed for approximately four years. Developers stated that no evidence of forged ZEC was found, and the subsequent Ironwood upgrade has disabled the old pool.
In Shenyu’s view, when Zcash’s valuation has risen to levels approaching those of some major networks, these historical allocations, governance friction, and security incidents will serve as grounds for the market to reassess whether its pricing is reasonable.