Kamino has launched Zcash-backed credit on Solana, allowing ZEC holders to borrow USDC against their positions as the privacy coin trades near its strongest levels since 2016.
The new ZEC lending market is curated by Allez Labs and operates as an isolated market. Users can supply ZEC as collateral, borrow USDC and use Kamino Multiply for leveraged ZEC exposure of up to 1.7x.
The integration gives ZEC holders access to dollar liquidity without requiring them to sell their underlying position. Isolated lending also separates the market from Kamino’s broader collateral pools, containing liquidation and credit exposure within the dedicated ZEC market.
ZEC reaches Solana through cross-chain infrastructure before being deployed inside Kamino’s lending system. Once transferred, the asset operates within Solana’s account and smart-contract environment rather than Zcash’s native shielded transaction system.
The launch extends ZEC beyond its traditional role as a privacy-focused currency and into collateralized DeFi borrowing. Higher leverage carries additional liquidation risk, particularly after the extreme volatility accompanying Zcash’s recent rally.
ZEC recently traded above $1,200 and reached roughly $1,249 before pulling back. The token was changing hands near $1,134 on September 8, with a market capitalization around $19.1 billion and more than $1 billion in 24-hour volume.
The move has helped push privacy-focused cryptocurrencies 213% above their combined market value when Bitcoin reached its October 6, 2025 peak. The sector has expanded from roughly $7.1 billion to $33.6 billion over the past year, while ZEC now represents 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 conversion.
Institutional demand had already strengthened during Zcash’s August ETF push, when ZEC broke through $800 as the NYSE Arca listing moved toward completion.
The rally has also created 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, taking the total to 39,760 ZEC, worth roughly $47 million at the time.
The additional position raised the average short entry from about $444 to $576.30 while leaving the trade with an unrealized loss near $24 million. The same wallet had previously built 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 the critical Orchard vulnerability and subsequent shielded-pool restoration. The network later moved forward with Ironwood to strengthen supply verification after the security episode.
ZEC remained near $1,134 on September 8, while the tracked Jin wallet held its 39,760 ZEC short and Kamino’s new ZEC-USDC credit market remained live on Solana.
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