Key Highlights
- Zcash (ZEC) dropped 21% in hours, sliding to $360 and triggering over $6M in long-position liquidations.
- Bearish sentiment grew as 13 of the 20 largest traders on Hyperliquid moved to short positions, some paying negative fees.
- Ethereum Co-Founder Vitalik Buterin urged Zcash to avoid token-based voting, warning it could weaken long-term privacy safeguards.
Zcash (ZEC) suffered a sharp drop on Monday, falling more than 21% within a few hours as the broader crypto market turned red.
According to CoinMarketCap, the coin slid to around $360, breaking through key support at $440, a level traders had been watching closely. The collapse also triggered more than $6 million in long-position liquidations, as leveraged bets on a continued rally unraveled.
The decline followed last month’s brief jump above $700, a rally that now seems unsustainable as trading volumes cooled after hitting $4.38 billion in mid-November.
The latest downturn has raised questions about what drove ZEC’s earlier rally, with analysts suggesting whale activity and short squeezes rather than lasting demand. Bearish sentiment strengthened on Hyperliquid, where 13 of the 20 largest traders moved into short positions, even accepting negative fees.
At the same time, some long-holding whales are sitting on steep losses, and Polymarket odds of ZEC hitting $1,000 this year have dropped from 42% to just 8%. Open interest across derivatives also fell below $500 million as short positioning increased.
Governance concerns
Alongside the market volatility, the Zcash community is debating the project’s governance model, specifically regarding the selection process for the Zcash Community Grants (ZCG) committee.
Ethereum Co-Founder Vitalik Buterin urged Zcash to avoid token-based voting, arguing that giving influence purely to token holders concentrates power and encourages short-term thinking. He warned that such a system is “worse than Zcash’s status quo” and could weaken the project’s long-term commitment to privacy.
His comments come as Zcash reassesses leadership and oversight. A few days prior, Zooko emphasized that Zcash’s committee model has grown through years of debate among independent members who share the same mission, even when they disagree.
“Zcash has evolved a resilient governance system over many years, made up of thoughtful and independent people,” he said, highlighting the importance of collective input and careful deliberation.
He confirmed plans to run again in the next election cycle and noted that the recent rise in ZEC’s price has brought both new opportunities and more low-quality grant proposals, making careful review more important than ever. He also warned that higher funding levels could make spending decisions too easy if discipline slips.
Community reactions
The discussion attracted feedback from the wider crypto community. AngelList’s Naval Ravikant argued that decentralized protocols should move to fully on-chain governance. This way, decisions are transparent and not reliant on trusted intermediaries.
However, Darklight countered that while blockchains must stay trustless, research and development still need human judgment. He noted that on-chain voting often results in capital concentration or voter apathy. In contrast, committees like ZCG serve as a quality filter, helping to protect Zcash’s long-term vision and main principles.
Also Read: Grayscale Moves to Convert Zcash Trust into Spot ETF
