Bearish bets on zcash (ZEC) reached a record high after the token slumped up to 50% in 24 hours following the disclosure of a now-patched vulnerability in its Orchard privacy pool. The bug, which existed since May 2022, could have allowed creation of undetectable counterfeit ZEC. Liquidations were relatively small at $118 million, indicating spot selling rather than a leverage cascade, with only 14% of leveraged positions wiped out. Open interest in ZEC futures climbed to a record high in token terms, suggesting traders piled into short positions. The long/short ratio on major exchanges like Binance and OKX was heavily skewed bearish, while Bybit retail traders leaned long. Shielded Labs, the nonprofit behind Zcash development, admitted there is no cryptographic way to prove whether the flaw was exploited before the fix, creating uncertainty over the token's supply. Arthur Hayes of Maelstrom said he sold his entire ZEC position as a result.

Key facts

• ZEC crashed 50% in 24 hours after Orchard vulnerability disclosure.
• Bearish bets hit record high, open interest in ZEC futures surged.
• Liquidations were small at $118M, indicating spot-led selloff.
• Shielded Labs admits no proof the bug wasn't exploited before patch.
• Arthur Hayes sold all ZEC holdings due to supply uncertainty.