# Zcash: Trusted Setup Leak

{% hint style="info" %}
[**Book an audit with Zokyo**](https://www.zokyo.io/)
{% endhint %}

**Summary**

Related Vulnerabilities: 7. [Trusted Setup Leak](https://zokyo-auditing-tutorials.gitbook.io/zokyo-tutorials/tutorial-16-zero-knowledge-zk/common-vulnerabilities-in-zk-code/trusted-setup-leak)

Identified By: [Zcash Team](https://z.cash/)

The Zcash zero-knowledge proofs are based on a modified version of the Pinocchio protocol. This protocol relies on a trusted setup of parameters based on the Zcash circuit. However, some of the parameters generated as part of this trusted setup allow a malicious prover to forge a proof that creates new Zcash tokens.

**Background**

For zero-knowledge protocols such as Pinocchio and Groth16, a trusted setup is required. The trusted setup is a way to generate the proper parameters needed so that the prover can generate a proof, and the verifier can properly verify it. The trusted setup process usually involves parameters that must be kept secret, otherwise malicious provers can forge proofs. These parameters are known as “toxic waste” and kept private through the use of multi-party computation. Therefore, it’s very important the trusted set-up process generates the correct parameters and keeps the toxic waste hidden.

**The Vulnerability**

The trusted setup for Zcash’s implementation of Pinocchio generated extra parameters that leaked information about the toxic waste. These extra parameters allowed malicious provers to forge proofs that would create Zcash tokens out of nothing. The use of the extra parameters essentially allowed users to counterfeit tokens. However, this vulnerability was never exploited.

**The Fix**

Since the toxic parameters were visible on the trusted setup ceremony document, it was impossible to ensure no one had seen them. The issue was fixed by the Zcash Sapling upgrade which involved a new trusted setup. The new trusted setup was ensured to not release any toxic parameters. Please see the Zcash explanation in the references section for more details on the timeline of events.

**References**

1. [Zcash Explanation](https://electriccoin.co/blog/zcash-counterfeiting-vulnerability-successfully-remediated/)
2. [Pinocchio Protocol](https://eprint.iacr.org/2013/279)
3. [Zcash’s Modified Pinocchio Protocol](https://eprint.iacr.org/2013/879)
