Zcash, a leading privacy-focused network, experienced a drop in its total value locked following the discovery of a 4-year-old vulnerability present in its Orchard shielded pool.
According to DeFiLlama, the total value locked on Zcash has dropped to around $1.65 million on May 26, 2026.
Why is TVL on Zcash Dropping?
The major factor behind the drop in the total value locked on Zcash is the recent bug finding in the network’s shielded pool. The bug in Zcash came into the light during the security audit of the network. The scariest part of this bug on the Zcash network is that it has been present on the network for the last 4 years.
The bug was identified on May 29 by researcher Taylor Hornby. This bug was capable of creating fake ZEC tokens in a secret way.
Even Zcash founder, Zooko Wilcox, has also admitted that the bug was “real and exploitable.” Apart from this, he also mentioned that there is no way to identify whether the bug was exploited in the past or not.
Zooko Wilcox stated in the official post on X, “The vulnerability could have been exploited to undetectably create an unlimited amount of counterfeit ZEC within Orchard. Because of the privacy properties of Orchard, there is no way to cryptographically prove whether the vulnerability was exploited before it was remediated. However, a network upgrade can be deployed to protect users and prove the integrity of the Zcash supply.”
This bug has shaken the trust of users on the network who were using the Zcash network for privacy-based transactions. Luckily, there was no single case reported where the user’s funds were directly affected by the bug.
Later on, Zcash fixed a major security bug in its Orchard shielded pool in two different steps. On June 2, the team implemented an emergency soft fork in order to shut down Orchard transactions to prevent any exploitation while they were working on a permanent solution. After that, on June 3, the NU6.2 hard work was implemented, which replaced the faulty code with a corrected version. This has again restored Orchard’s privacy features.
Blockchain Sector Faces Turmoil After Major Security Incidents and Technical Issues
The last few months have been very unfortunate for the blockchain sector as it has witnessed some of the bizarre security incidents and technical issues. This has depleted users’ trust in the digital asset sector and raised some serious concerns, like whether the blockchain sector is ready to handle a large portion of the financial world.
Amid growing surveillance by regulators and the growing threat of quantum computing, many users have started using privacy-based blockchain networks, such as Zcash and Monero. On the network, users can execute transactions while hiding all important information, such as identities like sender and recipient, and transaction amount.
Due to the growing adoption of privacy-based blockchain networks, the total value locked on Zcash surpassed $33.98 million in November, 2025. However, the bug incident and other security breaches, like the Kelp DAO and the Drift Protocol hacks, have pushed many users away from on-chain assets. In April alone, more than $635 million worth of funds was stolen in various security incidents in the digital asset sector.
Adding to this, in the last few weeks, networks like Sui, Zcash, and Base also suffered major outages, where these networks halted block production for a while and sparked panic among their users.
Not just small blockchains, but even popular blockchains like Bitcoin, Ethereum, and Solana have also witnessed major outflows in the last 1 month. For example, Ethereum’s total value locked (TVL) has dropped by around 13% in the last 1 month, plunging to $36.77 billion. Solana has also faced a similar drop in the same timeframe.
