ZEC Contract Position on Hyperliquid Sees 51.6% Plunge from Peak, $145 million Position Liquidated Early

BlockBeats News, June 5th, according to Hyperinsight monitoring, Zcash theoretically faces infinite inflation risk due to the Orchard zk-SNARK vulnerability. Negative sentiment surrounding this issue has been fermenting due to its "black box" nature and has now erupted.

Amidst panic selling, as of now, the ZEC balance on the Hyperliquid platform has plummeted by 51.6% from its peak on June 3rd (around $371.8 million), with a significant amount of funds withdrawing $145 million during the early stages of this period.

The balance changes (based on UTC time, converted to Beijing time) are as follows:

- From May 29th to 30th 8:00 UTC: ZEC balance was around $223 million;

- From May 30th to June 3rd 8:00 UTC: the balance rose to a peak of $371 million, during which the price surged from around $530 to $630, seeing a simultaneous increase in volume and price;

- From June 3rd to June 4th 8:00 UTC: the price stabilized at a high level, and the balance dropped to $226 million;

- From June 4th to present: with the concentrated outbreak of negative sentiment, the balance further decreased to $180 million.

From June 3rd to the early hours of June 4th, when the vulnerability details were not widely disclosed and the price was still stabilizing, positions worth nearly $145 million had exited early, indicating a large fund's reaction to the vulnerability may have preceded public awareness of its severity.

Below is additional information corresponding to the event timeline (Beijing time):

- Late night on May 29th to early morning on the 30th: Security researcher Taylor Hornby discovered and privately reported the Orchard circuit bug to the Zcash core team, who, upon confirmation, began formulating a fix;

- Evening of May 31st: The team began confidential coordination with miners and exchanges;

- June 2nd, 10:00 AM: Emergency soft fork activation, halting Orchard transactions to mitigate risk;

- June 3rd, 12:05 PM: NU6.2 hard fork activation, bug fix, and Orchard transactions re-enabled, accompanied by the release of emergency upgrade instructions (not disclosing the full severity of the vulnerability);

- From the evening of June 4th to June 5th: According to information from the community and official sources, the severity of this vulnerability has gradually been reported. The main concern is: there was a possibility of unlimited generation of undetectable fake ZEC, the vulnerability has existed for 4 years, and due to the nature of the privacy pool, it cannot be 100% confirmed whether it has been exploited. Currently, this vulnerability is still in a "black box" state, and if it has been exploited, the supply level is in question.

Note: The chart is in UTC time

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