F2Pool co-founder Chun Wang criticized Zcash (ZEC) on Sept. 8, calling its recent rally a "narrative bid" disconnected from fundamentals. With ZEC trading near $1,130 and market cap sitting near $19 billion—making it the ninth-ranked asset on CoinGecko—Wang said the valuation lacks on-chain justification.
ZEC posted gains exceeding 2,300 percent over one year, with the rally accelerating in August after Grayscale converted its Zcash Trust into a U.S. spot exchange-traded fund. The token dropped nearly 7 percent in the 24 hours surrounding Wang's comments.
Wang's core argument centers on Zcash's launch structure. The network allocated 20 percent of early block rewards to founders, employees, advisers and investors over its first four years—2.1 million ZEC, representing 10 percent of the planned 21 million maximum supply.
He also flagged Zcash's optional privacy model—shielded transactions remain opt-in rather than default—ongoing governance friction, and a recently disclosed Orchard vulnerability. Wang contended privacy narratives alone don't drive the real-world adoption seen in networks like Solana and Hyperliquid.
Wang's critique omits structural changes to Zcash's funding since launch. The Founders' Reward ended with the Canopy upgrade in November 2020. A new development fund then claimed 20 percent of block rewards through the first halving, split among Electric Coin Company (7 percent), the Zcash Foundation (5 percent) and Major Grants, later renamed Zcash Community Grants (8 percent). Miners continued receiving 80 percent.
This second-phase funding added 1.05 million ZEC—5 percent of eventual supply—meaning combined founder and development allocations directed up to 15 percent of max supply toward insiders and ecosystem work over eight years.
The funding structure changed again in November 2024. Zcash still allocates 20 percent of block rewards for ecosystem support, but recipients shifted. Zcash Community Grants now receives 8 percent while 12 percent flows into a protocol-tracked lockbox without immediate withdrawal access. Direct payments to Electric Coin Company and the Zcash Foundation ceased.
