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$ZEC Crash: What's Up With Zcash?
That's a ~20% crash in a single day.
And this isn't some random memecoin. That's Zcash.
What is Zcash? It's often described as private Bitcoin.
It's an L1 like Bitcoin. It doesn't support smart contracts. But unlike Bitcoin, it enables private transactions. Users can send and receive funds without revealing the sender, receiver, or transaction amount.
(Fair warning: the monetary history of ZEC is nowhere near as clean as BTC. Its status as "money" is still debatable.)
$ZEC had a massive run in Q4 2025. From around $75 on October 1st, it pumped more than 800% to nearly $700. It became the market leader for the privacy narrative.
So why the crash? The developer team behind Zcash collectively resigned from the project.
Yes. The entire team.
It sounds worse than it is, but to understand what's happening, we need to look at the structure behind Zcash.
The Players Involved:
- Zcash Foundation: Focuses on ecosystem tools, education, and running independent nodes like Zebra. It aims to remain neutral and does not control core protocol development.
- Electric Coin Company (ECC) was initially started as a for-profit company. They are the primary developer of Zcash's core protocol. It used to receive ~7% of the total Zcash block reward (part of the dev fund) to support the development.
- Bootstrap is a nonprofit organization created to transparently manage the funding received by ECC. All the shares of ECC were freely given to Bootstrap. Now, Bootstrap board controls the ECC.
(A history note: when the project started in 2016, they created two entities: Zcash Foundation and Zcash Company, a for-profit company which later rebranded to Electric Coin Company (ECC). Bootstrap came online in 2020 only.)
Here's what happened: the entire ECC team left, claiming that they were "constructively discharged" by Bootstrap board members.
In legal terms, constructive discharge occurs when an employer makes working conditions so intolerable that employees are effectively forced to quit.
As of now, the exact details of the conflict are not out yet. We'll have to wait for the tea. But it likely has to do with the "dev funds" that Zcash emits for development. The board doesn't seem to be enthusiastic about allocating the funds shared by the Zcash protocol.
The old ECC team is creating a new company. It'll be a wallet for Zcash.
My take? When the ECC team quit, everyone panicked, and ZEC crashed. Many worried Zcash won't be able to deliver on the roadmap.
But this team hadn't left the Zcash ecosystem. They're still building in it. It's just that they got tired of their overbearing bosses and are now building as an independent startup.
This does highlight serious governance issues. But Zcash isn't unique here. Everyone from Aave to the Ethereum Foundation deals with similar problems.
If you had already been bearish on ZEC, it's understandable. It's not everyone's cup of tea. Many would prefer privacy solutions on existing ecosystems.
But if you were bullish, and this event alone made you bearish, I think it's an overreaction.
Sponsored by edgeX
edgeX: The Leading Pre-TGE Perp DEX
Perp DEX is the winning sector of this cycle.
Hyperliquid is the obvious proof. It became the most successful chain of this cycle. It also gave out one of the most rewarding airdrops ever.
The airdrop built a very passionate community around $HYPE.
One reason for its success was using objective metrics like trading volume to identify their target users/community much better than other apps. So other
Perp DEXes started doing it as well.
What's the best perp dex to participate now?
edgeX is the best perp DEX that doesn't have a token. Among pre-TGE perp dexes, it is
- #1 native mobile app that went viral in Japan and Korea
- #1 in 30-day perp volume. It did ~$88.02 billion while HL only has ~$148.6B.
- #1 in open interest at $1.029 billion. For comparison, HyperLiquid only has approximately $ 9.1 billion.
- #1 in 7-day revenue at $3.97 million. HyperLiquid revenue for the same period is ~$12.34M.
- edgeX official memecoin $MARU is at 500m FDV and 150M MC.
So, it's the leading non-TGE perp dex by a mile.
Additionally, they've announced their biggest pre-TGE season. They've allocated up to 5% of the upcoming Edge token. Here are some ways to earn those points:
- Trade perps on the platform
- Using mobile apps.
- Hold $MARU
- Spot deposit
Using the mobile app is also a very pleasant experience. It has CEX-level UX and top-tier liquidity across perp markets.
So, users can easily trade perps from their phones as well.
Now, there was another key ingredient for the success of $HYPE: great token distribution.
They didn't have VCs. So they were able to distribute the tokens to real believers in the community. Tokenholders won't have to worry about VCs dumping on them.
$EDGE token distribution is great as well.
- 25% for Genesis distribution. A large chunk of it will be airdrop for the community. Only this will be unlocked at the start.
- 25% for the core contributors. This will be locked up for 2 years. Plus, another 2-year vesting period.
- 40% to the ecosystem & community. These will be used for growing and developing the protocol.
- There's a 10% for the foundation as well. That's a reasonable allocation as well.
TLDR: For perp farmers, EdgeX is a great option.
But EdgeX isn't just a perp platform. It's a lot more than that.
#1. They'll soon integrate crypto, stocks, and prediction markets in an all-in-one platform.
#2. $MARA is the memecoin of their community. Currently, it's trading at approximately ~$500M FDV.
#3. They also have an NFT collection of 2,999 items called the EpicSer. Holding it signals being a core member of the edgeX community.
#4. eStrategy is their liquidity provision and strategy trading protocol. eLP will be the first vault to launch. Its primary revenue sources are market-making yields, transaction fees, and liquidation fees. You can dig more into their strategy here.
eStrategy is edgeX's first steps into onchain asset management. In the future, they'll select top-performing trading strategies in the broader market to give users diverse investment options.
#5. From just a perp platform, they're upgrading to EDGE Chain. It's a unique Ethereum L2 designed for financial settlement.
- Firstly, it has a great UX that simplifies multi-chain complexities into a single, feature-rich trading experience.
- It leverages the security of Ethereum for final settlement. That's the maximum onchain security anyone can get.
- With cross-chain messaging, edgeX V2 will connect seamlessly to more than 70 blockchains. The vision is to leverage this interoperability to become the hybrid liquidity layer.
- They've created a specialized high-performance trading engine that can process over 200k orders per second. It'll also have matching latency under 10 milliseconds. That's top-tier performance.
So, edgeX isn't another generic slop that's looking to run the PerpDEX narrative. It's a well-developed ecosystem of products.
Most L2s on Ethereum are low-effort copies of existing L2 stacks like OP Stack and ZK Stack. The upcoming EDGE Chain isn't anything like that. The team has developed its own technology from the ground up.
If you want to develop some intuition surrounding their technology, check out the diagram below:
As far as users are concerned, edgeX will be much more performant than generic L2s. It also has many tech optimizations for onchain trading.
To recap, if you're interested in perp dexes, you should be on edgeX. They've great metrics, products, tokenomics, and tech.
And most importantly, they're running a juicy pre-TGE season.
🚀 DeFi Catalysts
Optimism Foundation has proposed to direct 50% of incoming Superchain revenue to regular OP buybacks.
Polymarket was announced as the exclusive Prediction Market Partner of the Wall Street Journal & the Dow Jones.
Solana Mobile has announced the conclusion of the first Seeker season and the launch of SKR on January 21st.
Drift Protocol introduced Auto-Signing. It allows users to long or short, set TP/SL, and close positions with just one click.
Tempo, the L1 chain from Stripe, introduced TIP-20, Tempo's native token standard.
Tether Gold introduced Scudo. Its value is 1/1000 of an XAU₮ (Gold Ounce). Theoretically, this should make Gold more accessible.
ADI Chain, a UAE L2 chain, has partnered with African payment leader M-Pesa. It's potentially 60M users coming onchain.
📰 Industry News
MCSI decided not to exclude Digital Treasury Asset companies like Strategy and BitMine from its indices.
Wyoming Stable Token Commission, a public entity in the US, made the Frontier Stable Token (FRNT) available for public purchase through Kraken.
Morgan Stanley has filed for Ether Trust. This comes days after the bank submitted paperwork for spot Bitcoin and Solana ETFs.
Ethena has selected Kraken as a custody partner for USDe Backing Assets. Anchorage Digital, Copper, and Ceffu are other custodians.
Nike has sold RTFKT, the NFT Studio company that it had acquired in 2021. Its flagship Clone-X collection has pumped 200% on the news.
🐦⬛ X Hits
- a16z on privacy trends for 2026
- Why the Venezuela takeover will pump BTC?
- Rate exchange layer: the missing piece for fixed-rate lending
- Risk Premium model: Aave v4 deep dive
- Vitalik rejects low-latency for Ethereum
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy and Yayya.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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