Zcash Sees Developer Slowdown as ZEC Extends Two-Month Slide

Zcash (ZEC) has seen a sharp decline, dropping nearly 40% over the past two months. This price drop follows a significant period of growth in late 2025, when its market capitalization surged approximately 15 times. The recent slide has raised concerns among investors about the project's sustainability and momentum.

On-chain development activity for Zcash has also declined, reaching its lowest level since November 2021. Santiment data indicates that developer effort is a key indicator of a project's vitality. A slowdown in this area may suggest reduced innovation and long-term potential.

The decline in development activity has coincided with internal governance issues. The Electric Coin Company (ECC), the core development team for Zcash, has resigned en masse. Josh Swihart, the former CEO of ECC, cited constructive discharge as the reason for the exit, alleging misalignment with the Bootstrap nonprofit board.

Why Did the ECC Team Resign?

The ECC team's resignation followed a governance conflict with Bootstrap, the nonprofit organization responsible for overseeing Zcash. According to Swihart, the board's actions created working conditions that were no longer viable for the team. He described the situation as a clear misalignment with the original mission of Zcash.

Zcash founder Zooko Wilcox addressed the situation, stating that the protocol remains unaffected and that the dispute does not impact Zcash's technical integrity. However, the leadership change has introduced uncertainty about the future direction of the project.

How Did Markets React?

The Zcash token experienced a significant price drop following the resignation announcement. ZEC fell by approximately 16% over the 24 hours after the news was released. The broader cryptocurrency market also saw a correction, with a nearly 3% decline in the same period. However, the drop in ZEC was more pronounced than the general market trend.

The governance dispute has raised concerns among investors and traders. Liquidation data from the derivatives market shows that ZEC had a liquidation imbalance of 9,780% in one hour after the news broke, indicating strong short-term volatility. Long positions were hit with forced selling as the price dropped nearly 10%.

What Are Analysts Watching Next?

Analysts are monitoring the impact of the governance crisis on Zcash's development and long-term viability. While the protocol remains operational, the departure of the core development team raises questions about who will lead future upgrades and innovations. The ECC team has stated that it plans to form a new company to continue its work on privacy-focused technologies.

The Zcash Foundation has emphasized that the open-source nature of the protocol ensures its resilience. However, the loss of a primary development team could slow progress on key upgrades and features. Investors are now watching whether the community can rally to fill the void left by the ECC team.

Monero (XMR), another privacy-focused cryptocurrency, has seen renewed interest. XMR recently reclaimed the top position in the privacy coin category by market capitalization, surpassing ZEC for the first time in months. This shift reflects a broader reallocation of capital away from Zcash during a period of uncertainty.

Bloomberg Intelligence estimates that stablecoin flows could reach $56 trillion by 2030, highlighting the growing importance of stablecoins in the global financial system. While Zcash faces governance challenges, the broader crypto market continues to evolve, with institutional adoption and regulatory developments shaping the landscape.

Zcash's performance in 2026 will be closely watched by investors and analysts. The coin saw a strong rally in 2025, surging 816.7% for the year. However, 2026 has been more challenging, with ZEC down approximately 18% year-to-date. The governance issues and developer exodus have added to the pressure on the token.

The resolution of the governance dispute will be a key factor in determining Zcash's future. If the community can establish a clear and sustainable development path, the project may still have strong long-term potential. However, if the dispute leads to prolonged fragmentation, Zcash could struggle to maintain its position in the privacy-focused cryptocurrency space.