Zcash dropped by as much as 34% after the full details of the Orchard bug went public, even though the emergency fix had already been deployed 2 days earlier. The Foundation reported no unauthorized ZEC creation and no breach of user privacy.
Orchard’s zero-knowledge proof circuit is the cryptographic backbone behind Zcash’s private transactions. The flaw, discovered on May 29 and present since Orchard launched in May 2022, meant counterfeit ZEC was theoretically possible without detection. There is no evidence that happened, but there is also no cryptographic way to prove it never did. That is why the sell-off was so sharp: for an asset built on privacy, any doubt about whether supply remained verifiably scarce hits the core trust behind the token.
So while the exploit was contained quickly, the bigger market story is that credibility can take longer to repair than code.