Kamino has introduced Zcash-backed credit on Solana, enabling ZEC holders to borrow USDC against their holdings while the privacy coin trades near its strongest levels since 2016.

The new ZEC lending market, curated by Allez Labs, operates as an isolated market. Users can supply ZEC as collateral, borrow USDC, and use Kamino Multiply to obtain leveraged ZEC exposure of up to 1.7x. Kamino announced the launch on X.

ZEC Gains New Utility on Solana

The integration gives ZEC holders access to dollar liquidity without having to sell their underlying position. Because the market is isolated, it is separated from Kamino’s broader collateral pools, keeping liquidation and credit exposure contained within the dedicated ZEC market.

ZEC reaches Solana through cross-chain infrastructure before being deployed within Kamino’s lending system. Once transferred, the asset operates inside Solana’s account and smart-contract environment rather than Zcash’s native shielded transaction system. That distinction matters for privacy-focused users: collateral held on Solana does not benefit from Zcash’s shielded-pool privacy, a trade-off that has historically kept privacy assets largely outside major DeFi lending platforms. Kamino’s market is a notable case of a privacy token being accepted as borrowable collateral on a large lending protocol.

The launch extends ZEC beyond its traditional role as a privacy-focused currency into collateralized DeFi borrowing. Higher leverage carries additional liquidation risk, particularly following the extreme volatility that has accompanied Zcash’s recent rally.

Zcash Breaks $1,200 as Privacy Coins Surge 213%

ZEC recently traded above $1,200, reaching roughly $1,249 before pulling back. On September 8, the token was changing hands near $1,134, with a market capitalization around $19.1 billion and more than $1 billion in 24-hour trading volume.

The move has pushed privacy-focused cryptocurrencies 213% above their combined market value at the time Bitcoin reached its October 6, 2025 peak. The sector has expanded from roughly $7.1 billion to $33.6 billion over the past year, and ZEC now accounts for about 62% of that total.

The rally accelerated after Grayscale converted its Zcash Trust into the ZCSH ETF on August 25. Assets under management reached approximately $463.2 million by September 4—less than two weeks after trading began—compared with roughly $260 million around the time of conversion. The conversion placed ZEC alongside the small group of digital assets with a US-listed spot ETF wrapper, a channel previously limited largely to Bitcoin and Ethereum.

Institutional demand had already been strengthening during Zcash’s August ETF push, when ZEC broke through $800 as the NYSE Arca listing moved toward completion.

Garrett Jin Expands ZEC Short Despite $24M Loss

The rally has also produced one of the market’s largest visible short squeezes. A Hyperliquid wallet associated with trader Garrett Jin increased its bearish position by another 7,000 ZEC near $1,195, bringing the total to 39,760 ZEC—worth roughly $47 million at the time—according to on-chain data.

The additional position raised the average short entry from about $444 to $576.30, while the trade carried an unrealized loss near $24 million. The same wallet had previously opened a new ZEC short after earlier bearish trades against Zcash generated more than $11 million in realized profit.

ZEC’s current rally follows a turbulent summer that included a critical Orchard vulnerability and the subsequent shielded-pool restoration. The network later moved forward with Ironwood to strengthen supply verification after the security episode.

As of September 8, ZEC remained near $1,134, the tracked Jin wallet still held its 39,760 ZEC short, and Kamino’s new ZEC-USDC credit market remained live on Solana.