diff --git a/pkgs/by-name/ze/zed-editor/0002-fix-duplicate-reqwest.patch b/pkgs/by-name/ze/zed-editor/0001-fix-duplicate-reqwest.patch
similarity index 100%
rename from pkgs/by-name/ze/zed-editor/0002-fix-duplicate-reqwest.patch
rename to pkgs/by-name/ze/zed-editor/0001-fix-duplicate-reqwest.patch
diff --git a/pkgs/by-name/ze/zed-editor/0001-linux-linker.patch b/pkgs/by-name/ze/zed-editor/0001-linux-linker.patch
deleted file mode 100644
index 5deef7339a72..000000000000
--- a/pkgs/by-name/ze/zed-editor/0001-linux-linker.patch
+++ /dev/null
@@ -1,19 +0,0 @@
-diff --git a/.cargo/config.toml b/.cargo/config.toml
-index 717c5e1..0bb7b6c 100644
---- a/.cargo/config.toml
-+++ b/.cargo/config.toml
-@@ -5,14 +5,6 @@ rustflags = ["-C", "symbol-mangling-version=v0", "--cfg", "tokio_unstable"]
- [alias]
- xtask = "run --package xtask --"
- 
--[target.x86_64-unknown-linux-gnu]
--linker = "clang"
--rustflags = ["-C", "link-arg=-fuse-ld=mold"]
--
--[target.aarch64-unknown-linux-gnu]
--linker = "clang"
--rustflags = ["-C", "link-arg=-fuse-ld=mold"]
--
- [target.'cfg(target_os = "windows")']
- rustflags = [
-     "--cfg",
diff --git a/pkgs/by-name/ze/zed-editor/package.nix b/pkgs/by-name/ze/zed-editor/package.nix
index 29dc13b403bc..0811b18ce66d 100644
--- a/pkgs/by-name/ze/zed-editor/package.nix
+++ b/pkgs/by-name/ze/zed-editor/package.nix
@@ -99,7 +99,7 @@ let
 in
 rustPlatform.buildRustPackage (finalAttrs: {
   pname = "zed-editor";
-  version = "0.204.5";
+  version = "0.207.4";
 
   outputs = [
     "out"
@@ -112,38 +112,36 @@ rustPlatform.buildRustPackage (finalAttrs: {
     owner = "zed-industries";
     repo = "zed";
     tag = "v${finalAttrs.version}";
-    hash = "sha256-P3mD4jaoQA4zWHjWtrvRBG25lgmudbkuFLP+Cy6xaDg=";
+    hash = "sha256-IKACHMKHIyq8UuqWlA6U/cdCi+wrevZwl2CINSWmmRc=";
   };
 
-  patches = [
-    # Upstream delegates linking on Linux to clang to make use of mold,
-    # but builds fine with our standard linker.
-    # This patch removes their linker override from the cargo config.
-    ./0001-linux-linker.patch
-  ];
-
   cargoPatches = [
-    ./0002-fix-duplicate-reqwest.patch
+    ./0001-fix-duplicate-reqwest.patch
   ];
 
-  postPatch =
+  postPatch = ''
     # Dynamically link WebRTC instead of static
-    ''
-      substituteInPlace $cargoDepsCopy/webrtc-sys-*/build.rs \
-        --replace-fail "cargo:rustc-link-lib=static=webrtc" "cargo:rustc-link-lib=dylib=webrtc"
+    substituteInPlace $cargoDepsCopy/webrtc-sys-*/build.rs \
+      --replace-fail "cargo:rustc-link-lib=static=webrtc" "cargo:rustc-link-lib=dylib=webrtc"
 
-      # Zed team renamed the function but forgot to update its usage in this file
-      # We rename it ourselves for now, until upstream fixes the issue
-      substituteInPlace $cargoDepsCopy/reqwest-0.12*/src/blocking/client.rs \
-        --replace-fail "inner.redirect(policy)" "inner.redirect_policy(policy)"
+    # Zed team renamed the function but forgot to update its usage in this file
+    # We rename it ourselves for now, until upstream fixes the issue
+    substituteInPlace $cargoDepsCopy/reqwest-0.12*/src/blocking/client.rs \
+      --replace-fail "inner.redirect(policy)" "inner.redirect_policy(policy)"
 
-      # The generate-licenses script wants a specific version of cargo-about eventhough
-      # newer versions work just as well.
-      substituteInPlace script/generate-licenses \
-        --replace-fail '$CARGO_ABOUT_VERSION' '${cargo-about.version}'
-    '';
+    # The generate-licenses script wants a specific version of cargo-about eventhough
+    # newer versions work just as well.
+    substituteInPlace script/generate-licenses \
+      --replace-fail '$CARGO_ABOUT_VERSION' '${cargo-about.version}'
+  '';
 
-  cargoHash = "sha256-Mlcpcp9/+ZoUdQUYpYX33uxNoAE4gAFh0twGFxi4tNw=";
+  # remove package that has a broken Cargo.toml
+  # see: https://github.com/NixOS/nixpkgs/pull/445924#issuecomment-3334648753
+  depsExtraArgs.postBuild = ''
+    rm -r $out/git/*/candle-book/
+  '';
+
+  cargoHash = "sha256-jv8ytsttXFG5VlFWI885zLJsZn8rFkiFdPhUvNKOwpY=";
 
   nativeBuildInputs = [
     cmake