A Solana cat memecoin has turned its transaction-fee system into a lucrative Zcash distribution program, paying holders nearly $3 million in ZEC as the privacy coin stages a massive rally.

Anonymous Cat, or ZCAT, takes a 3% cut whenever the token is transferred. Most of the fees are then swapped into Zcash (ZEC) and distributed among wallets holding at least $20 worth of ZCAT, according to the project’s dashboard.

The sharp rise in ZEC has dramatically boosted the value of those payouts. The project has distributed around 2,320 ZEC, worth roughly $2.8 million as of Monday morning in Asia, through more than 470,000 separate payments.

There is an important distinction, however: the rewards are not generated by a business, lending activity or an investment strategy. They come from ZCAT’s own transaction fees. That means distributions are closely tied to trading activity. If fewer users trade or transfer ZCAT, the rewards could shrink considerably.

Zcash has been among the market’s biggest gainers, climbing more than 2,300% over the past year. ZEC broke above $1,200 late Sunday as traders renewed their interest in privacy-focused cryptocurrencies.

The Zcash network allows users to shield information such as transaction amounts and the identities of senders and recipients. Its rally has consequently offered traders a way to bet on privacy coins potentially returning to the center of the crypto narrative.

Investors seeking Zcash exposure through traditional financial markets can also use Grayscale’s spot Zcash ETF, which began trading on NYSE Arca in late August. The product allows investors to gain exposure to ZEC without directly buying or storing the cryptocurrency.

ZCAT itself trades against ZEC through StonkFun, a Solana launchpad that supports trading pairs involving assets beyond SOL and stablecoins.

The memecoin has posted a major move of its own. ZCAT was trading near 13 cents on Monday, putting its market capitalization at approximately $124 million and its 24-hour trading volume at about $22 million. The token briefly approached 19 cents over the weekend before suffering a steep pullback during Monday’s early trading.

Memecoin Mania Expands

ZCAT’s rise comes as cat-themed memecoins continue to attract traders despite having little connection to conventional fundamentals.

Cash Cat is another recent example. The token gained momentum following the July launch of Robinhood Chain and developed a following partly because the name was linked to Robinhood before the brokerage adopted its current branding.

One trader reportedly turned an initial position of about $800 into more than $1 million during Cash Cat’s first week. At the same time, memecoin trading quickly became one of the most active uses of Robinhood Chain, even though the network was originally designed to support tokenized stocks.

The activity has since grown further. Memecoin applications now account for a large portion of transactions on Robinhood Chain, while Pons, a token-creation platform, recently recorded more than 22,000 new tokens launched in a single day and generated millions of dollars in fees.

For ZCAT holders, the key risk is that its reward engine depends on continued market activity.

In other words, buying ZCAT is ultimately a speculative bet on the token maintaining enough attention, volume and liquidity to keep generating ZEC rewards.