ZPAQ (or zpaq) is a compressed archive format, and associated software. It is a member of the PAQ family of formats.
Apparently, a capitalized ZPAQ usually refers to the format, while zpaq refers to the software.
To the best of our understanding, ZPAQ decompression algorithms are written in a special programming language called ZPAQL (which apparently uses the .cfg file extension), compiled to bytecode, and stored in each ZPAQ archive. This allows ZPAQ to use practically any compression algorithm.
Most or all ZPAQ archives begin with ASCII "
zPQ", or "