Zcash core team collectively departs, can the governance earthquake of privacy coins be resolved?

The core development team behind Zcash, Electric Coin Company(ECC), announced their collective departure yesterday, triggering a market upheaval. This is not a technical crisis, but a conflict of理念 between governance and the development team. ECC CEO Josh Swihart accused the supporting organization Bootstrap’s board of deviating from Zcash’s mission, leading the team to decide to establish a new company to continue development. ZEC’s price subsequently dropped by 7%, but the protocol itself remains unaffected. This “personnel storm” exposes governance challenges in the privacy coin sector and tests the cohesion of the Zcash community.

Core of Governance Conflict: Value Clash

Timeline of Events

The ECC team collectively resigned on January 7, citing that the majority of Bootstrap’s board members have shown a “significant deviation” from Zcash’s long-term mission in governance direction. Swihart specifically criticized four key decision-makers:

Swihart emphasized in a statement, “Our employment terms were unilaterally modified, preventing us from performing our duties effectively and with integrity.” This indicates that the conflict has escalated from ideological differences to direct management confrontation.

Voices of the Opposing Sides

Former ECC CEO Zooko Wilcox later defended the Bootstrap board on social platforms, stating that these directors are long-term partners with high professional integrity. This statement reveals serious internal disagreements within the Zcash community, with factions holding completely opposite views on governance issues.

Market Reaction: Short-term Panic, Long-term Observation

Price Fluctuations

According to the latest data, ZEC dropped about 7% within 24 hours of the announcement, currently trading around $459. This decline is relatively moderate, reflecting some market acceptance of the official statement that “the protocol itself remains unaffected.”

Historical Comparison

ZEC’s performance should be viewed in a broader context:

• November 2025: Once surged above $700
• Current price: $459
• Last 30 days: +11.77%
• Last 7 days: -9.50%

This indicates that, amid the overall rise of privacy coins, ZEC has experienced a correction. The governance crisis, combined with technical uncertainties, has further pressured the price.

Key Question: Will the Protocol Be Affected?

Official Commitment

Swihart clearly stated that Zcash, as an open-source public chain, is not owned by any single company or organization. The network is maintained collectively by miners, validators, and users, with normal operation of nodes, code submissions, and fork mechanisms. This means:

• Protocol security remains unchanged despite team departures
• Network consensus continues to operate
• Users can continue to use the Zcash network normally

Actual Risks

While the protocol itself remains stable, the departure of the ECC team may impact:

• Development Progress: Establishing a new company takes time, potentially delaying feature updates
• Community Confidence: Governance chaos could weaken developer and investor trust
• Competitive Position: Rivals like Monero might gain an edge in privacy technology

Opportunities and Risks in the Privacy Coin Sector

Sector Background

Arthur Hayes recently stated that privacy will become the dominant narrative in cryptocurrencies by 2026, and his investment fund Maelstrom has already built a large ZEC position. This reflects a new institutional understanding of privacy coins: privacy is no longer an adversary of regulation but a necessity for large transactions.

Cypherpunk and even listed companies plan to include ZEC in their corporate asset reserves, aiming for a circulation volume of 5%. Such institutional-level demand opens a whole new market space for privacy coins.

Zcash’s Position

Against this backdrop, Zcash faces two extremes:

On one hand, the privacy coin sector is in a historic opportunity period. As the most mature technology and most active community among privacy coins, ZEC should benefit.

On the other hand, governance chaos might cause ZEC to miss this window, allowing competitors like Monero to capture market share.

Future Outlook: Can the New Company Stabilize Operations?

The performance of the new company formed by ECC will directly determine ZEC’s prospects. Key variables include:

• Funding Capability: Can the new company secure enough capital to sustain development?
• Talent Retention: Will core developers stay amid organizational changes?
• Community Support: Will the Zcash community recognize the legitimacy of the new company?
• Technical Output: Can the new company maintain a technological lead in privacy tech?

From Swihart’s statements, the team attempts to emphasize continuity—“We remain the same team with the same mission.” But promises and reality often differ; the real test will come in subsequent development cycles.

Summary

The governance upheaval in Zcash is essentially a conflict between power and mission. While ECC’s departure won’t immediately destroy the protocol, the long-term uncertainty has already emerged. In the short term, ZEC’s price may continue to face pressure; but if the new company can operate stably and maintain technological progress, the opportunities in the privacy coin sector could support ZEC’s long-term value.

The key is whether the new company can deliver results in its first development cycle. If the team makes substantial breakthroughs in privacy technology or protocol optimization, this “crisis” might be recorded as a turning point for Zcash—shifting from dependence on a single organization to true community-driven development. Conversely, if the new company falls into internal conflicts or stagnates, ZEC’s position in the privacy coin competition will gradually erode.