ZCash shielded pool climbs to 23% of supply as network usage surges

ZCash's shielded pool has reached 23% of total supply, up from 18% in October, marking a steady progression in network privacy adoption.

The shielded pool functions by obscuring transaction details, making the entire network more difficult to trace as more ZEC enters this private state.

As covered in previous issues of The Block's Data and Insights newsletter, shielding requires direct interaction with the chain, making it a useful indicator of genuine network usage rather than pure speculative positioning.

The growth in shielded supply offers an interesting parallel to Ethereum's staking dynamics. Approximately 30% of ETH is currently staked to secure the network, and it will be worth monitoring whether ZEC experiences similar behavior or resistance as it approaches this threshold. 

Both metrics reflect active participation in network operations rather than passive holding.

The increase in shielding coincides with significant price appreciation as ZEC surged from approximately $400 on Nov. 1 to as high as $750 last Friday, accompanied by substantial trading volume across exchanges.

At the time of writing, ZEC ranks second among Coinbase's most traded assets by 24-hour volume, surpassing Ethereum with $345 million and $288 million, respectively.

The alignment between price performance and fundamental network activity represents a positive development. Rising shielded supply during a price rally suggests that increased attention is translating into actual protocol usage, not just speculative trading.

This contrasts with many other tokens, where traders have largely taken positions through derivatives rather than buying spot.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.