Zcash is facing renewed scrutiny after Ethereum co-founder Vitalik Buterin advised the project against adopting token-based governance. Buterin expressed concern that such a model could undermine Zcash’s fundamental mission of protecting privacy.
These remarks come at a time when the price of ZEC has been experiencing a steady decline over the past week.
ZEC Price Weakens Ahead of Governance Debate
Zcash has seen a downward trend, with its price falling from over $520 to approximately $447, indicating a decrease in market sentiment. Trading volumes remain moderate, suggesting a lack of strong buyer interest amidst growing uncertainty about the project's future direction.
Vitalik: “Token Voting Is Worse Than Zcash’s Status Quo”
In a communication on X, Vitalik cautioned the Zcash community that the implementation of token-holder voting could significantly compromise the project’s core principle of privacy.
He argued that governance decisions made by the "median token holder" could lead to a deviation from Zcash's original objectives. Buterin outlined that token voting:
- •Does not adequately protect minority interests.
- •Is susceptible to influence from large holders (whales).
- •Can create incentives that are not aligned with privacy-focused ecosystems.
He asserted that token voting represents a "dark hand" that could permanently weaken Zcash, deeming it a less desirable outcome than the project's current governance system.
I hope Zcash resists the dark hand of token voting.
Token voting is bad in all kinds of ways (see https://t.co/Cvl7CFVgtc ); I think it's worse than Zcash's status quo.
Privacy is exactly the sort of thing that will erode over time if left to the median token holder. https://t.co/NbRqGLOrpj
— vitalik.eth (@VitalikButerin) November 30, 2025
Privacy at the Core of the Debate
Vitalik highlighted that privacy is particularly vulnerable to the effects of token-based governance, unlike aspects such as chain fees or treasury allocations. He believes that if protocol choices are determined by whichever token holders participate in voting, Zcash risks a gradual erosion of its privacy guarantees through majority-rule decisions that do not prioritize long-term privacy integrity.
This situation presents Zcash with a complex challenge: to foster community engagement while simultaneously safeguarding a mission that necessitates more robust safeguards than typically found in Decentralized Autonomous Organization (DAO) structures.
What Comes Next for Zcash?
The ongoing downtrend in ZEC's price suggests that the market is already exhibiting caution. Governance uncertainties, coupled with Zcash's persistent challenges in user adoption and exchange liquidity, are creating pressure at a time when other privacy-related narratives are gaining traction.
Vitalik's commentary may significantly influence the community's upcoming discussions, potentially slowing or halting any move towards token-based voting. Zcash currently faces both ideological and market challenges, with its forthcoming governance decisions expected to shape market sentiment in the coming weeks.