Zcash announced that the newly launched shielded Ironwood pool is being “formally verified” to rule out all undetectable counterfeiting bugs.
Ironwood pool was proposed as a solution after the project’s flagship Orchard pool encountered a counterfeiting bug that could have minted new ZEC tokens.
However, given the strong privacy design of the Zcash protocol, it couldn’t be verified whether the bug was exploited or not.
In early June, notable figures in the sector, such as Arthur Hayes, dumped their ZEC holdings and slammed the project for a lack of capacity to prove that the bug was not leveraged to mint new tokens.
The FUD dented market sentiment, dragging ZEC price down to $251 from $640, marking a +60% crash in three days. An attempt to calm the volatility by top privacy supporters failed to materialize.
The ZEC price crash only eased after the project proposed a new auditable Ironwood pool. The new pool had an internal mechanism to verify ZEC supply without compromising privacy.
Now, this is the first time the pool is being ‘formally verified’ to test whether it works as designed.
Will it renew trust in Zcash?
For the project, the bug found last month will be the last one with the new auditable Ironwood shielded pool.
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.
Reacting to the update, Mertz Mumtaz, a privacy champion and founder of Helius Labs, billed the move as ‘colossal.’
This is colossal. Let me translate: 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.
For him, the market will take a while to grasp the update, but he expected it would eventually rally ZEC to $10K per coin.
Well, apart from last month’s bug issue, the protocol has advanced its plan for post-quantum recoverable wallets. Collectively, the formal verification, privacy, and post-quantum push could help build trust in the protocol again.
That said, the Orchard pool still dominates the shielded pool supply despite nearly 1 million ZEC redeemed last month amid the bug FUD.
As of writing, the Ironwood pool had zero supply, and it remains to be seen whether it will attract ZEC users.
Will ZEC reclaim momentum?
On the price charts, Zcash [ZEC] price jumped 6% after the update and tagged $512.
An extended recovery could only be confirmed if ZEC decisively reclaims $500 as support. If so, another 30% upside potential could be feasible towards $640-$680. Otherwise, a rejection at $500 would drag ZEC back to $380 (200-day SMA, blue line).
Final Summary
- Zcash has begun formal verification of the Ironwood shielded pool to eliminate undetectable counterfeiting bugs witnessed in the Orchard pool
- ZEC could present an extra +30% gain if the update rebuilds trust in the protocol
