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Zcash rebounded about 45% from last week’s low after developers proposed Ironwood, a new shielded-pool upgrade aimed at restoring supply verification after an Orchard counterfeiting bug.
ZEC traded near $428 on Monday after an intraday high above $444. The bounce followed a steep selloff after Shielded Labs said the Orchard flaw could have allowed counterfeit ZEC to be created inside the shielded pool without public detection.
May 29 Orchard Bug Was Fixed by June 2
The vulnerability was discovered by security researcher Taylor Hornby on May 29. Zcash developers completed an emergency response on June 2. The patch fixed the immediate Orchard issue and allowed Orchard transactions to resume.
The Zcash Foundation has said there is no evidence the bug was exploited, no evidence user funds were affected and no evidence of any change to total ZEC supply.
Ironwood Would Create a New Shielded Pool
The Ironwood proposal would create a new shielded pool using the fixed Orchard circuit. New outputs to the old Orchard pool would be blocked.
Users would then be able to migrate funds through a turnstile process into the new pool. The goal is to give the network a cleaner way to verify supply after the emergency fix.
Turnstile Process Would Check Orchard Exits
The proposed turnstile is the main supply-verification tool. If more ZEC tries to leave Orchard than should exist in the pool, the excess would become visible during migration.
That would turn a hidden accounting risk into something the network can detect. If no counterfeit ZEC exists in Orchard, migration should allow the old pool to wind down while nodes verify circulating supply through pool balances.
Orchard Design Left no Outside Supply Proof
Shielded Labs said there is no cryptographic way to prove from outside the pool that the vulnerability was never exploited. That uncertainty drove the market panic because Orchard hides transaction amounts and balances by design.
The harder case is if counterfeit ZEC exists and moves early, because the chain cannot easily distinguish honest notes from counterfeit notes inside Orchard before migration.
ZEC Remains Below Pre-Disclosure Levels
The rebound came after developers proposed Ironwood, but ZEC remained below levels seen before the Orchard disclosure.
Developers now need to turn Ironwood from a proposal into a coordinated upgrade. Zcash has patched the immediate bug, while the market is still waiting for a stronger supply-verification path.
