Zcash has begun formal verification of its Ironwood shielded pool to eliminate undetectable counterfeiting bugs after a critical vulnerability was discovered in the Orchard pool. The bug could have minted new ZEC tokens, but exploitation could not be confirmed due to Zcash’s privacy design, prompting a selloff from Arthur Hayes and others. ZEC crashed from $640 to $251 in three days. The Ironwood pool includes an internal mechanism to verify supply without compromising privacy. Mertz Mumtaz of Helius Labs called the development “colossal,” stating it makes undetectable counterfeit bugs mathematically impossible. ZEC rose 6% to $512 following the update.
Zcash announced that its new Ironwood shielded pool is being formally verified to eliminate undetectable counterfeiting bugs. The pool was proposed after the project’s Orchard pool encountered a bug that could have minted new ZEC tokens.
Due to Zcash’s strong privacy design, it could not be verified whether the bug was exploited. In early June, notable figures including Arthur Hayes dumped their ZEC holdings and criticized the project for lacking the ability to prove the bug was not leveraged.
The selloff dragged ZEC from $640 to $251, marking a 60% crash in three days. The price decline only eased after the project proposed the auditable Ironwood pool, which includes an internal mechanism to verify ZEC supply without compromising privacy.
This is the first time the pool is being as formally verified to test whether it works as designed. The project stated, “The recently discovered undetectable counterfeiting bug in Orchard wasn’t the first of its kind in Zcash. Thanks to formal verification of Ironwood, it will be the last.”
Mertz Mumtaz, founder of Helius Labs, called the move “colossal.” He said, “This makes undetectable counterfeit bugs in Zcash mathematically impossible going forward. This was the biggest tradeoff in private money before, and Zcash has solved it.” He expected the market would take time to grasp the update but predicted ZEC could rally to $10,000 per coin.
Beyond the bug issue, the protocol has advanced its plan for post-quantum recoverable wallets. The Orchard pool still dominates shielded supply despite nearly 1 million ZEC redeemed last month amid the bug fears, while the Ironwood pool had zero supply at the time of writing.
On price charts, ZEC rose 6% after the update to $512. An extended recovery could be confirmed if ZEC reclaims $500 as support, with potential 30% upside toward $640 to $680, while a rejection could drag the price back to $380.
