Did Zcash just find an infinite mint bug???
Yes, and in the worst place possible. Shielded Labs, a Zcash development group, said in a forum post that security engineer Taylor Hornby discovered a critical counterfeiting vulnerability in Zcash's Orchard pool bug on May 29 during an audit, using Claude Opus.
- Orchard is Zcash's newest shielded pool, the privacy system that hides transaction amounts and history.
The bug could have let an attacker create infinite amount of ZEC tokens inside Orchard without the network rejecting it.
The bug was privately reported to Zcash Open Development Lab, the engineering group known as ZODL, and an emergency fix was completed by June 2.
How did they prove the bug was real?
They tested it. Shielded Labs said security engineer Taylor Hornby built a working exploit in a local test environment and used it to create counterfeit ZEC inside Orchard.
Shielded Labs said the exploit showed that "unlimited, undetectable counterfeit ZEC" could be generated if the vulnerability were used.
How long was this sitting there?
Almost four years. Shielded Labs said the vulnerability was present from Orchard's activation in May 2022 until the emergency fix was deployed. That is why the disclosure hit so hard.
This wasn't a bug found before launch. It was inside Zcash's most advanced privacy pool while users were treating that pool as the future of private money.
Shielded Labs said the flaw slipped through years of expert review.
Josh Swihart, a former Electric Coin Company executive who now leads Shielded Labs, said the bug was in Orchard's circuit, the set of rules Zcash uses to check whether a private transaction is valid.
"This was a flaw in the handwritten rules, not in the underlying cryptography," Swihart explained.
So what's so crazy about it? Why Zcash can't just... check fake ZEC tokens?
Because Zcash is doing what Zcash is supposed to do. In Bitcoin, amounts and transaction history are public. If someone prints 184 billion BTC, the whole network can see the impossible number and reject the bad chain.
In 2010, when Bitcoin's value overflow bug created more than 184 billion BTC in one transaction. The issue, now called as the "Value overflow incident," was spotted within hours, patched, and the bad chain was replaced.
But Zcash is different because its shielded pools hide transaction amounts and history by design. That is good for privacy. But it's also bad for supply checks when the bug sits inside the private accounting system.
Shielded Labs said there is "no definitive way to determine using only cryptography" whether this Orchard bug was exploited before it was fixed.
That is why some are calling this a nuclear kind of bug for Zcash. Not because fake ZEC is known to exist, but because the system can't just point to a public ledger and settle the question.
What's next?
Although the bug was patched, the trust repair isn't finished. Shielded Labs is now exploring a network upgrade that would create a new shielded pool and use turnstile accounting for coins leaving Orchard.
That would let anyone verify the integrity of Zcash supply without simply trusting a developer assessment.
Swihart also said the community could explore a second Orchard pool, possibly targeted for the NU7 upgrade at the end of July, but he's not taking a fixed position on that path.
Shielded Labs also said it is starting formal verification work on Orchard, continuing AI-assisted security research and looking to hire a head of security and a cryptographer.