ZachXBT Accuses zkSNARKs NFT Project of Extracting $17 Million From Auction

On-chain analyst ZachXBT has accused a newly launched zkSNARKs PFP project on Zcash of extracting $17 million from investors while offering what he described as little practical utility.

The allegations followed a blind auction that attracted 16,971 bids and raised $17 million, according to information shared by The project subsequently distributed 8,000 NFTs at a clearing price of 1.5 ZEC.

ZachXBT's comments are allegations rather than an established finding of misconduct, and the figures cited in the post do not by themselves establish whether investors were defrauded or whether the project violated any laws or platform rules.

zkSNARKs Project Raises $17 Million

The auction drew the project finalized its NFT distribution. According to Coin Bureau, 16,971 bids were submitted during the blind auction, resulting in $17 million being raised.

The project issued 8,000 NFTs at a clearing price of 1.5 ZEC. The auction structure meant participants bid without knowing the final clearing price before the distribution was completed.

ZachXBT questioned the relationship between the funds raised and the project's stated or observable utility. His criticism centers on the amount of capital generated compared with what he says was spent on the NFT minting process and how the proceeds were allocated.

Analyst Questions Project Fund Allocation

According to the claims cited by Wu Blockchain, 10% of the proceeds was reserved for the team, while another 5% was allocated to royalties.

ZachXBT also claims that only around $2,000 was spent on minting the NFTs. The post does not provide a detailed breakdown of the project's remaining expenditures or explain how the balance of the $17 million was allocated.

Those figures form the basis of ZachXBT's criticism markets that the project extracted a large amount of capital relative to its practical utility. Without additional information about development costs, treasury holdings, operational expenses or other uses of the proceeds, the figures alone do not establish the project's overall profitability or financial conduct.

ZachXBT Compares Launch to Ordinals Projects

ZachXBT characterized the project as following what he called a “quick money and run” model, comparing it with some previous Ordinals launches.

The comparison reflects his interpretation of the project's structure and economics rather than a confirmed classification of the project. The post does not establish that the zkSNARKs project has abandoned development or that it intends to cease operations.

The allegations come as NFTs and privacy-focused technologies continue to intersect within the Zcash ecosystem. The zkSNARKs reference relates to zero-knowledge cryptographic technology associated with Zcash, while the PFP collection represents the project's NFT component.

For investors and observers assessing the launch, the central unresolved financial issue is how the $17 million raised in the blind auction is being used and what ongoing utility or development commitments accompany the 8,000 NFTs. The available claims cited by Wu Blockchain do not provide a complete accounting of those proceeds.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.