Zcash developer activity hits 2021 low amid governance dispute
Developer activity on the privacy-focused cryptocurrency Zcash has fallen to its lowest point since 2021, coinciding with a governance dispute and a two-month price downturn for ZEC.
Market intelligence firm Santiment reported in an X post on Thursday that Zcash-related developer activity has declined to its weakest level since November 2021. Over the same period, the Zcash (ZEC) token has dropped about 40% in the past two months. See the post’s chart here.
Santiment noted that historically, increased development activity has often preceded stronger performance among select altcoins, while reduced efforts to innovate and improve can have the opposite effect.
The slowdown comes amid an ongoing governance dispute between the Electric Coin Company (ECC), the primary development group behind Zcash, and Bootstrap, the nonprofit that supports the protocol.
ECC recently stated it will separate from Bootstrap and establish a new company, citing what it called “malicious governance actions.” In response, Bootstrap said its board had discussed “external investment and alternative structures to privatize” Zashi, the self-custodial wallet designed for private Zcash transactions.
On Thursday, ECC developers also announced they are building a new wallet, cashZ, with a launch targeted in a “few weeks.”
Zcash Foundation: Open-source protocol remains unaffected by dispute
Addressing the governance issue, the Zcash Foundation said the protocol’s privacy-preserving network will continue to operate unaffected due to its open-source architecture, which is designed for resilience so that no single party can control the protocol.
“This structure ensures that changes within a single organization or across many of them, while meaningful, do not compromise the integrity or continuity of the Zcash blockchain,” the foundation said in a statement published Thursday.
Despite the assurances, ZEC declined 14% over the past week and was trading around $433 at the time of writing.
Larger holders were active during the period, with whales adding a cumulative $1.17 million in spot ZEC over the past week, while new wallets accumulated $2.14 million, according to crypto intelligence platform Nansen.
Rival privacy coin Monero (XMR) surpassed ZEC’s market capitalization on Thursday, reclaiming its position as the largest privacy-focused cryptocurrency, according to CoinMarketCap.
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