Developer activity linked to the privacy-focused cryptocurrency Zcash has fallen to its lowest level in several years, as internal governance disputes and a prolonged price downturn weigh on the project’s ecosystem.
Data from market intelligence firm Santiment, shared in a post on X on Thursday, shows that Zcash-related development activity has dropped to its weakest level since November 2021. Over the same period, the ZEC token has declined roughly 40% over the past two months.
“Historically, rising development activity allows standout altcoins to emerge from the pack,” Santiment said. “The opposite tends to occur when projects ‘let off the gas,’ reducing their efforts to innovate and improve.”
The slowdown in developer activity comes amid an ongoing governance dispute between the Electric Coin Company (ECC)—the primary development team behind Zcash—and Bootstrap, the nonprofit organization that supports the protocol.
ECC recently announced plans to separate from Bootstrap and form a new company, citing what it described as “malicious governance actions,” Cointelegraph reported on Thursday.
In its official response, Bootstrap said its board had been engaged in discussions around external investment and alternative structures to potentially privatize Zashi, the self-custodial wallet designed for private Zcash transactions.
Also on Thursday, ECC developers said they are working on a new wallet, cashZ, which is expected to launch within the next few weeks.
Zcash’s open-source model remains intact, foundation says
Responding to the governance dispute, the Zcash Foundation sought to reassure stakeholders that the protocol itself would not be affected. The foundation emphasized that Zcash’s open-source codebase was designed for resilience, ensuring that no single organization can exert control over the network.
“This structure ensures that changes within a single organization or across many of them—while significant—do not compromise the integrity or continuity of the Zcash blockchain,” the foundation said in a statement published Thursday.
Despite the reassurances, ZEC’s price fell 14% over the past week, trading around $433 at the time of writing.
However, whales remained largely unshaken by the governance dispute, adding a total of $1.17 million in spot ZEC over the week. At the same time, new wallets contributed an additional $2.14 million, according to crypto analytics platform Nansen.
Privacy-focused cryptocurrency Monero overtook Zcash on Thursday, surpassing ZEC’s market capitalization and reclaiming its position as the leading privacy-preserving crypto, according to CoinMarketCap.
