Centi and Zcash Shielded Assets - A Co-Creation Project

Community Grants Applications
29

Response to Community Feedback on Centi’s ZSA Integration Proposal

Dear Zcash Community,

Thank you for your thoughtful feedback on our grant proposal. We’ve carefully reviewed all concerns and would like to address the most critical points while proposing modifications to better align with community needs.

Key Points & Proposed Changes

1. Grant Structure - Starting Small with Revenue Sharing

We understand the concern about the $350,000 total. Our proposal already includes a $50,000 pilot phase (see milestones on GitHub). Based on your feedback, we propose:

  • Prioritize legal/bank approval in the first milestone to validate ZSA viability
  • Implement revenue sharing: ZCG receives a percentage of transaction fees from ZSA-based transactions, creating aligned incentives and potential grant recoupment

2. Regulatory Clarity - Swiss Advantage

As a Swiss-regulated financial services provider for 5 years, we operate under stringent compliance standards. ZSA’s optional compliance features (issuer visibility, transaction approval) provide flexibility, though Centi Franc will maintain its current permissionless, cash-like properties. Swiss regulation allows global service without active solicitation abroad.

3. Immediate Impact - Real Users, Real Privacy Need

  • 25,000+ active users and 500+ merchants ready for ZSA on day one
  • Privacy isn’t theoretical: merchants currently expose all transaction data with traditional stablecoins
  • 127k CHF revenue in 2024 (92% from transaction fees) demonstrates real usage
  • With major players like Stripe, Walmart entering stablecoins, privacy-preserving infrastructure becomes critical

Detailed Responses to Additional Concerns

Market Expansion: East Africa (Kenya, Uganda) is our priority, pending local payment on-ramps. We currently serve remittances FROM Europe TO Africa; direct African access requires additional infrastructure.

Liquidity vs. Utility: Our direct-to-consumer model is intentional. Exchange listings are expensive and weren’t needed for our use cases so far. As the ZSA ecosystem grows (DEXes, other implementations) it will also be easy to get the coin listed.

Bank Guarantee Model: We’ve pledged 100% liquidity to the bank. Users have direct claims on the guarantee with a pre-defined redemption process - the gold standard for fiat-backed stablecoins.

Build First, Fund Later?: ZSA has zero field implementations today. Without ecosystem support, the rational business approach is “wait and see.” This grant jumpstarts real-world ZSA adoption rather than waiting for organic growth.

Proposed Grant Modifications

Based on your feedback, we propose:

  1. Milestone 1 Focus: Prioritize legal/regulatory validation with our bank
  2. Revenue Sharing Model: Define fair percentage of ZSA related transaction fees returning to the community grant. This creates shared success. While we’ll integrate, offer, and market the ZSA stablecoin to our user base, broader adoption success will depend on the ZSA ecosystem growth and the Zcash community’s overall strategy.
  3. Option for ZCG: Name/brand the ZSA stablecoin if separate terms are created

We’re committed to making ZSA successful and appreciate the community’s desire for aligned incentives. Let’s work together to bring privacy-preserving payments to the world.

Looking forward to your thoughts on these modifications.

Best regards, Bernhard Müller CEO, Centi Ltd

For detailed statistics or technical discussions, I’m happy to arrange NDA-based sessions. Our regulatory status is verifiable at FINMA.

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