Using Zcash in DeFi
Near Intents
Zcash and NEAR Intents have been integrated, allowing users to swap Zcash (ZEC) with other top altcoins, including Bitcoin, Solana, NEAR, and XRP, without paying any fees. This integration is part of NEAR Protocol's efforts to create an infrastructure of autonomous and verifiable AI bots, which also brings benefits to Zcash by enabling AI-powered payment rails.
Zcash users are now capable of accessing smart contracts and wider DeFi applications while preserving their privacy via Near Intents .
Maya Protocol
Maya Protocol has integrated Zcash to enhance its decentralization, liquidity, and transaction privacy. This integration allows Zcash users to benefit from decentralized swaps, giving them greater flexibility and liquidity while preserving privacy.
Learn More: https://www.mayaprotocol.com/blog-maya-academy/zcash-integrates-maya
Note: It is also possible to bridge any ETH you already have to private store as Shielded Zcash using the "Release" Tab & entering your Transparent address. You may then use the 'Autoshield' in your mobile/desktop wallet.
For this application to remain private it is recommended not to swap from ZEC > ETH and back from ETH > ZEC.
Innovation around Zcash DeFi
Layer 1 Solution
Options are currently being explored to enable DeFi applications within the Zcash ecosystem using the current Layer 1. This could be possible by perofrming most of the contract operations off-chain with a sequencer & have the validation of those actions done on chain. A version of this was created in partnership with JP Morgan on their enterprise blockchain. As of NU5 a mechanism exists (TZE) to add this type of extension to Zcash.
zkEVM
This would bring native programmability to Zcash with an EVM-compatible virtual machine that supports zero-knowledge proof computation. This would allow Zcash to find growth through a more diverse developer community and foster an ecosystem of privacy preserving applications and tokens. This would make it comparable to other existing L2 privacy solutions.
Continuing research into Proof-of-Stake & the Cosmos Interblockchain Communication Protocol is led by the ECC. Next steps are being assessed along with the success of the Ethereum Merge to PoS with any issues that may arise.
ZSA/UDA's
Zcash Shielded Assets / User Defined Assets have been in development with the assistance of a dedicated team. Following the NU5 protocol upgrade they are significantly closer to fruition. Mechanisms for trustless & private cross-chain bridging of these assets enabling interoperability are currently in the works. A link to the Zcon3 presentation on this below.
Resources:
Zcon3 Private Cross-Chain Transfers
Zcon3 QEDIT Presentation on Defi / Drawing Board
Ian Miers on ZSA's & Stablecoins
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The unequivocal advantage Zcash has over other existing smart contract platforms is it's natively private Layer 1. This completely removes any possibility of information leakage while using any Layer 2 applications. Allowing for a fundamentally simpler and more secure application layer that can permission access to information much easier.