Arkham Labels Zcash Activity as Majority Traceable in New Network Analysis

Highlights:

• Arkham data shows Zcash privacy faces new pressure as identified balances now cover a large share of the total supply.
• Arkham labels Zcash activity, and the disclosure shows how traders and institutions leave clear trails across the chain.
• Zcash developers plan a dynamic fee system that aims to reduce cost spikes and improve network efficiency.

Arkham Intelligence, a blockchain analytics firm, has released new data that challenges long-held views about Zcash privacy. The firm said it has labeled more than 53% of all Zcash transactions. The figure includes shielded and transparent activity across the network. Arkham also linked almost $420 billion in volume to known entities. The disclosure surprised many users because Zcash has promoted strong privacy for years.

Advertisement

Arkham announced the launch of Zcash on-chain tracking, labeling over 53% of Zcash transactions — including both shielded and transparent — representing around $420 billion in volume linked to identifiable individuals and institutions. About 48% of transaction inputs and outputs…

— Wu Blockchain (@WuBlockchain) December 9, 2025

Arkham provided additional details about the findings. It identified 48% of all inputs and outputs. It also connected 37% of all ZEC balances to real institutions and individuals. These balances equal roughly $2.5 billion. Analysts said the update gives a clearer picture of network flows and trading behavior.

The data alters the manner in which users learn about ZEC movement. Traders may now scrutinize big transfers with increased accuracy, and this change enhances market transparency. Nevertheless, it also creates new doubts regarding Zcash’s privacy assurances.

Arkham Labels Zcash Activity as Analysts Track Identified Network Flows

Arkham detailed how it built its dataset. The firm relied on behavioral patterns and long-term wallet clustering. It also used exchange information and past seizure records. These signals helped analysts link repeated actions to known users. Arkham said it did not break Zcash cryptography.

One example involves the U.S. Government’s ZEC holdings. These funds trace back to the AlphaBay case from eight years ago. Arkham shows authorities seized about $737,000 worth of ZEC. The value later doubled as the market strengthened. That wallet now appears on Arkham’s public dashboard.

Track Large ZEC holders: USG

The US Government seized $737K in ZEC from AlphaBay Founder Alexandre Cazes 8 years ago.

That $737K has now doubled in value, held by the US Government for the past 8 years. Track USG on Arkham:https://t.co/6h4l919qwB pic.twitter.com/TOF9riJ7Qh

— Arkham (@arkham) December 8, 2025

Another example shows activity during the October market decline. A large trader bought $4.49 million worth of ZEC during the drop. About five weeks later, the trader moved the funds to Gemini. Arkham said the profit could reach more than $6.6 million. The case shows how identifiable patterns emerge without viewing encrypted data.

These findings renewed debate about the strength of Zcash privacy. Shielded addresses continue to hide transaction details at the protocol layer. However, real activity often reveals patterns when users interact with exchanges. This pattern draws more attention as regulators examine privacy tools more closely.

Zcash Team Unveils a Fresh Fee Plan for a Busier Network

Zcash developers released a new proposal for a dynamic fee market. The plan shifts Zcash away from the long-standing static fee model. Developers said the old structure cannot support rising activity. They also noted reports of higher transaction costs during busy periods.

Zcash developers propose a dynamic fee mechanism to prevent users from being priced out of transactions, with ZEC rising 12% on the news.#Zcash #CryptoNews pic.twitter.com/LI2lNr7YzB

— THE BLOCKOPEDIA (@theblockopedia_) December 9, 2025

The update is based on previous amendments under ZIP-317. That step brought on board action-based accounting in order to cut down spam attacks. It was effective, though not a remedy to the fee pressure at the time of high growth. The developers now favor a less sophisticated and more liberal mechanism. They desire fees that are realistic and not overly complicated.

The design uses median fees from the previous 50 blocks. It also adds synthetic transactions to simulate constant congestion. This method creates a steady baseline for users. It also helps prevent extreme spikes when the ZEC price increases. Developers said the model aims to improve network efficiency.

Advertisement