Developer activity linked to the privacy-focused cryptocurrency Zcash has fallen to its lowest level in years, as a governance dispute and a prolonged price decline weigh on the project’s ecosystem.
Data from market intelligence company Santiment shared in a Thursday X post showed that developer activity tied to Zcash dropped to its weakest level since November 2021. Over the same period, the Zcash (ZEC) token has fallen about 40% over the past two months.
“Historically, rising development activity leads to standout altcoins being able to emerge above the pack. The opposite result holds true for those that ‘let off the gas’ and decline in their efforts to consistently innovate and improve,” said Santiment.
Source: SantimentRelated: Zcash governance in turmoil: How low can ZEC price go?
The slowing developer activity comes amid an ongoing governance dispute between the Electric Coin Company, the main development team behind Zcash, and Bootstrap, the non-profit supporting the protocol.
The Electric Coin Company recently said it would separate from Bootstrap and form a new company, citing what it described as “malicious governance actions,” Cointelegraph reported Thursday.
In its official response, Bootstrap said the board members engaged in discussions regarding “external investment and alternative structures to privatize” Zashi, the self-custodial crypto wallet built for private Zcash transactions.
On Thursday, the ECC developers announced that they are working on a new wallet, cashZ, which is set to launch in a “few weeks.”
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Zcash protocol’s open-source nature unaffected by dispute: Zcash Foundation
In its response to the governance incident, the Zcash Foundation assured investors that the privacy-preserving protocol will not be affected by the governance dispute, thanks to Zcash’s open-source codebase, which was designed for “resilience” so that no single party can control the protocol.
“This structure ensures that changes within a single organization or across many of them, while meaningful, do not compromise the integrity or continuity of the Zcash blockchain,” wrote the foundation in the response published on Thursday.
ZEC/USD, one-week chart. Source: Nansen.aiDespite the assurance, the Zcash token’s price fell 14% over the past week, and traded about $433 at the time of writing.
Still, whales were unfazed by the governance dispute, as they added a cumulative $1.17 million spot ZEC tokens across the past week, while fresh wallets added $2.14 million, according to crypto intelligence platform Nansen.
ZEC, XMR, market capitalization, one-month chart. Source: CoinMarketCap.comPrivacy coin Zcash competitor Monero (XMR) surpassed ZEC’s market capitalization on Thursday, regaining its position as the leading privacy-preserving cryptocurrency, according to CoinMarketCap.
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