Developer activity tied to Zcash has dropped to its lowest point in nearly three years, adding to concerns around the privacy focused blockchain. Market data shared by analytics firm Santiment shows that development work connected to Zcash has slowed sharply, reaching levels last seen in November 2021. The slowdown comes at a time when the ZEC token has already been under pressure, extending a decline that has lasted close to two months.
Santiment noted that projects with rising developer activity often outperform the broader market over time, while those that reduce innovation efforts tend to lose momentum. In Zcash’s case, the fall in development activity has coincided with a sharp drop in investor confidence and weaker price action.
ZEC price weakens amid fading momentum
The ZEC token has fallen roughly 40 percent over the past two months, reflecting growing uncertainty around the project. Over the past week alone, the token declined about 14 percent, trading near $433 at the time of writing. The sustained sell off has placed Zcash among the weaker performers in the privacy coin segment during this period.
Market participants appear cautious as both technical progress and governance stability come under question. While broader crypto market conditions have played a role, the internal challenges facing the Zcash ecosystem have added extra pressure on the token.
Governance dispute deepens ecosystem uncertainty
A major factor behind the decline in sentiment is an ongoing governance dispute involving key organizations linked to Zcash. The Electric Coin Company, the primary development firm behind the protocol, recently announced plans to separate from Bootstrap, a non profit organization that supports the Zcash network.
According to the Electric Coin Company, the decision was driven by what it described as malicious governance actions. The firm said it would form a new company to continue its work on Zcash related products and development.
Bootstrap responded by stating that its board had been engaged in discussions around external investment and alternative structures related to Zashi, a self custodial wallet designed for private Zcash transactions. The differing accounts have added to confusion within the community and raised questions about long term coordination among Zcash stakeholders.
New wallet plans and foundation response
Despite the dispute, development efforts have not stopped entirely. Developers at the Electric Coin Company announced that they are building a new wallet called cashZ, which is expected to launch within the next few weeks. The announcement was aimed at reassuring users that product development is continuing, even as organizational changes unfold.
The Zcash Foundation also stepped in to address concerns, emphasizing that the protocol’s open source design protects it from internal conflicts. In a public response, the foundation said Zcash was built to remain resilient regardless of changes within individual organizations. According to the foundation, no single entity has control over the blockchain, and governance shifts should not affect the network’s core operations or security.
Whale accumulation contrasts with retail caution
While price action and developer data suggest weakness, on chain data paints a more mixed picture. Large holders appear to be taking advantage of the decline. Data from crypto intelligence platform Nansen shows that whales accumulated around $1.17 million worth of ZEC tokens over the past week. New wallets also added roughly $2.14 million in spot ZEC during the same period.
This accumulation suggests that some investors view the current downturn as an opportunity rather than a warning sign. Still, it remains unclear whether whale buying alone can offset broader concerns around governance and reduced development activity.
Meanwhile, competition in the privacy coin space has intensified. Monero has overtaken Zcash in market capitalization, reclaiming its position as the largest privacy focused cryptocurrency, according to CoinMarketCap. The shift highlights how quickly leadership can change when sentiment and network activity weaken.
For Zcash, the coming weeks may prove critical. The launch of new products, resolution of governance tensions, and a recovery in developer participation could help restore confidence. Without clear progress on these fronts, pressure on ZEC may continue.
