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Zcash Shielded Assets

Zcash Shielded Assets (ZSA) are a proposed improvement to the the Zcash protocol that would enable the creation, transfer, and burn of custom assets on the Zcash chain.

If you are familiar with the ERC-20 token standard on the Ethereum blockchain, ZSAs are to Zcash as ERC-20 tokens are to Ethereum.

Zcash Shielded Assets would enable the creation of custom tokens on the Zcash blockchain, thereby allowing tokens other than ZEC to benefit from the anonymity and privacy of shielded transactions on the Zcash blockchain.

A major potential use of ZSAs would be for the issuing of stablecoins on the Zcash protocol. Stablecoins are cryptocurrencies that peg their value to a fiat currency, such as the US Dollar or Euro. Currently, some of the most widely circulated stablecoins are ERC-20 tokens such as USDC and Dai .

Another potential use of ZSAs would be for the issuing of governance tokens. For example, Zechub (the publisher of this wiki) is a Decentralized Autonomous Organization (DAO) and could create and issue to its members a ZSA for the purpose of voting on proposals and governance decisions.

ZSAs are being developed by QEDIT , under a major grant from the Zcash Foundation in collaboration with the Electric Coin Company . As this project is still being actively developed, updates are posted on this thread of the Zcash forum. The ZSA grant application by QEDIT is available from the Zcash Foundation grants website.

As a reference, QEDITs original forum post about their proposal can be found here .



Grant Milestones

Below is the list of grant milestones status as of April 28th, 2023

MilestoneFeatureStatus
1Transfer Functionality ZIP✅ - Paid - 2/18/22
2Issuance Mechanism ZIP✅ - Paid - 5/18/22
3Issuance Mechanism Implementation✅ - Paid - 10/24/22
4Fees Structure ZIP✅
5Transfer Protocol Implementation PR✅
6Transfer Circuit Implementation PR❌
7ZSA Protocol Specification✅
8Fees Structure Implementation PR❌
9Node Wallet State Implementation on Zcashd❌
10Strengthening Protocol Security and Efficiency✅
11Preparing Protocol for Integration and Deployment✅

NOTE:
✅ -> Completed
❌ -> Not completed
TBD -> To be determined

The ZSA Proposal

The ZSA proposal for Shielded Assets (ZSA/UDA) was presented by the QEDIT team to build generic shielded assets on the Zcash blockchain. These are usually referred to as User Defined Assets (UDA) or as Zcash Shielded Assets (ZSA).

With this proposal, the team at QEDIT plans to bring DeFi to the Zcash ecosystem, and at the same time enable the use of the best privacy technology within the existing DeFi ecosystem with regards to a pool survey, where the team asked, and the community answered: generic shielded assets (ZSA/UDA) are the most requested feature at the moment

This proposals are technically adherant to the Zcash Improvement Proposal (ZIP) specification and are defined in ZIP 226 & ZIP 227.

  1. ZIP 226 : Transfer and Burn of Zcash Shielded Assets
  2. ZIP 227 : Issuance of Zcash Shielded Assets