Key facts
- Cypherpunk Technologies acquired a Zcash mining fleet from Winklevoss Capital for $33.33 million.
- The new mining operation controls approximately 18% of the Zcash network's hashrate.
- Cypherpunk aims to hold 5% of Zcash's circulating supply.
- The Zcash Ironwood upgrade was implemented on July 28 to enhance security.
Cypherpunk Technologies has launched what it claims is the world's largest Zcash mining operation, acquiring a fleet from Winklevoss Capital for $33.33 million. This strategic move expands the company's involvement in the Zcash ecosystem beyond accumulating the privacy coin to actively producing it. The newly deployed fleet, operating across U.S. facilities, generates approximately 4.2 GSol/s of Equihash hashrate, representing about 18% of the entire Zcash network's computational power. The acquisition was funded through a pre-funded warrant agreement.
This expansion aligns with Cypherpunk's treasury ambitions, as the company is already the largest corporate holder of Zcash, with approximately 323,394 coins, or 1.92% of the circulating supply. The firm aims to increase its holdings to 5% of the total ZEC supply, leveraging mining to produce coins at a cost below the market price. The company has also appointed industry veteran Kevin Zhang as head of mining.
The launch follows a period of volatility for Cypherpunk's Zcash-focused strategy. Despite a recent surge in Zcash's price, the company's stock has been closely correlated with the cryptocurrency's performance, a risk that cuts both ways. The Zcash network recently implemented its Ironwood upgrade on July 28, introducing a new shielded transaction protocol to replace the Orchard pool and enhance network security following the discovery of a flaw.