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There is an ever-troubling tag on privacy tokens, with government crackdowns specifically directed at them. For this reason, Grayscale-backed protocol Horizen (ZEN) has unveiled plans to deprecate its mainchain shielded pools, an event that implies its privacy features will be removed from the Horizen main blockchain at the consensus level.
The deprecation of #Horizen mainchain shielded pools means privacy features will be removed from the Horizen main blockchain at the consensus level. This means $ZEN will no longer be a privacy coin after this change. Learn more about this upcoming change: https://t.co/HSno4RJaqO pic.twitter.com/GbMMrX9T48
— Horizen (@horizenglobal) June 27, 2023
When the deprecation is completed, the protocol's native token, $ZEN, will no longer be a privacy coin, dissociating itself from the likes of Monero (XMR), Dash and ZCash, among others.
Key reasons for this rebrand
Unlike the main reasons that many believe inspired this move, Horizon revealed in its blog post that it decided to scrap the privacy feature in order to help drive sustainable ecosystem growth. The update reads:
The purpose of the deprecation is to ensure Horizen does privacy technology the right and sustainable way to drive ecosystem growth and minimize risks. It proposes a solution to eliminate technical debt and avoid regulatory threats that can prevent the greater Horizen community from fully and freely participating in our ecosystem.
Considering the regulatory landscape in the industry as of today, tokens that are tagged securities and those that employ privacy features are most often targeted by regulators like the United States Securities and Exchange Commission (SEC). The pivot from privacy may save Horizen many enforcement actions in the near term.
According to Horizen, the changes are set to go live on testnet in August, and the mainnet will record the changes in September of this year.
Potential impact on ZEN price
It remains unclear how the proposed changes will impact the price of ZEN in the long term; however, the revelation has forced the price of the digital currency down by 2.86%, and it is changing hands at a spot price of $7.03.
For ZEN users, counting the potential benefits in the long term might help fuel interest in the token moving forward.
Gamza Khanzadaev
Yuri Molchan
