Key Highlights
- The Zcash Foundation denied any connection to ZRC-20, saying it had no prior knowledge of the project or its $CASH token.
- ZRC-20 is designed to create and transfer tokens using Zcash transactions and encrypted memo fields.
- The project presented $CASH as its first token with a maximum supply of 21 million, but several parts of the ZRC-20 system are still being worked out.
The Zcash Foundation has denied any connection to a new token project called ZRC-20 after a post claimed that Zcash had launched its own token standard.
The Foundation said it had no prior knowledge of ZRC-20 or its $CASH token, adding that the project is privately developed and not part of the official Zcash protocol.
The issue began with an X post from the Zcash Foundation account saying, “Zcash now has a token standard.”
The post said ZRC-20 would soon allow users to create, mint and transfer tokens directly on the Zcash blockchain without needing a protocol upgrade or permission. It also presented $CASH as the first token under the proposed standard, with a maximum supply of 21 million.
The Foundation later pushed back against the claim. In its response, it said, “We have no prior knowledge of ‘ZRC-20’ or the $CASH token.” It explained that the project is a private initiative and is not an official Zcash token standard or a built-in feature of the network. The Foundation also told users to do their own research before interacting with the token.
The available information does not explain how promotional material for the private project appeared through the Foundation’s account. There is also no confirmation that the account was hacked or compromised, meaning the incident should not be described as an account breach without further evidence.
How the zrc-20 project works
Behind the confusion is a separate project that is trying to build a token system using Zcash transactions. Its technical documents describe ZRC-20 as a draft standard for fungible tokens, meaning tokens that can be deployed, minted and transferred.
The proposed system does not try to change how Zcash itself works. Instead, it uses encrypted memo fields attached to shielded Zcash transactions to carry instructions for the tokens. These instructions cover three main actions: deploying a token, minting new units and transferring tokens between users.
Indexers would track token balances
Independent indexers would then read those instructions and keep track of token balances. In simple terms, Zcash would process the transactions, while separate software would keep the records needed to know how many ZRC-20 tokens each user holds.
That difference matters because Zcash nodes would not directly check or approve the token balances. The project’s documentation says ZRC-20 would not require a consensus change or smart contracts. As a result, the token system would operate on top of Zcash rather than becoming part of the network’s core rules.
Zrc-20 follows the brc-20 idea
The idea takes some inspiration from Bitcoin’s BRC-20 system, although the two use different ways to store token instructions. ZRC-20 proposes using Zcash’s memo fields, while BRC-20 uses Bitcoin inscriptions.
Some parts are still being worked out
Several parts of the project are still being worked out. Its documents list questions around larger data payloads, structured memos, naming conflicts and atomic trading. The material also provides limited information about the team or legal entity behind the project.
This is also where the difference between a private project and an official Zcash feature becomes important. Official changes to the Zcash network follow the Zcash Improvement Proposal process, where proposed changes can be documented and reviewed by the wider ecosystem.
For now, the Foundation’s position is clear: ZRC-20 and $CASH are not official Zcash products. While the project says it can use Zcash infrastructure to create and track tokens, that does not mean the Foundation created, approved or operates the system.
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