Centi and Zcash Shielded Assets - A Co-Creation Project

Community Grants Applications
23

  1. If we would stop accepting it or our partners/merchants would, e.g. due to a bankruptcy of Centi, you have a direct claim in the bank guarantee, meaning you will be paid by the bank. There is even a pre-defined process for this which you can see on the last 3 pages here: https://centi.ch/wp-content/uploads/2024/08/Centi-Franc-CCHF-Introduction-Token-Terms-v1.1-2024.pdf

  2. In practice the bank could give you the guarantee like you stated… e.g. if the company is credit worthy. The guarantees are usually made by the credit departments in the bank. Basically what matters for the user is the bank guarantees and they can also check the balance sheet of the bank etc. see if it is stable. In practice Centi provided 100% liquidity of the entire guarantee amount to the bank on a pledged account. The bank guarantees themselves with his, in case there would be claims. This model may change in the future as the treasury grows, what will not change, however, is that the full amount of all issued tokens will be 100% guaranteed by a Swiss bank.

  3. Today there is no market liquidity on any multi-lateral exchange. We talked to a few but they want huge money even more for airdrops, give always, trade competitions etc. We did not have the means nor wanted to pay that much for that, since our use cases so far all can work closed loop. If of course ZSA will be adopted by some exchanges, then it is also easier and cheaper to get it listed. But in my experience for new token protocols they ask even more money than for a simple listing (which they already take quite some money even if it is an off the shelf ERC-20)

  4. I understand this concern and to be totally honest, I can only tell you that yes, indeed today this is possible in Switzerland. It is even possible to have the same concept on paper, and we do have a very similar product on paper that is still circulating in Switzerland called the REKA Check.

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As Centi we can only have very limited influence on future regulation and therefore it is hard to give a guarantee into eternity. We are convinced that if we embark on this project, then we can make it happen swiftly.

What could also be done, is to prioritize the Stablecoin side (at least legal) in the project. Provide the ZSA security review to the bank together with a draft of updated terms. If they don’t mind us extending the terms and issuing on ZSA, then we would have this risk mitigated as far as possible.

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24

Super interesting proposal! I would love to see a real world application of ZSAs out in the wild, however I have a couple of concerns…

Mainly I’m not so sure that ZCG funds should be used to build out a commercial enterprise. Centi will largely be the beneficiaries of this proposal rather than zcash as a protocol. 350k is quite a lot of money to give away.

I would like to see a clause that ZCG recoups at least half of the $$ through the platform fees, that way everybody wins, at the moment this proposal is too lop sided in favour of the business Centi imo

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25

Are you advising a stablecoin project that is going to launch on zcash or just a general stablecoin project?

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26

I have like others some concerns over how long such a project would last if it gained traction due to animosity towards private transactions by EU regulators, who have significant leverage over Switzerland.

I also have some doubts about the current utility since the Centi app is not available in Africa or Latin America, and it is these people who need a stablecoin, not the people in Europe. Do you have timeline for when the Centi app might become available in Africa?

Regardless, if this is funded I think recouping some of the costs as @zkcroc suggests is a good idea.

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27

Just the fact that the Centi is built on BSV and promoted by CoinGeek/Calvin Ayre is a hard pass for me on this one.

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28

I am sorry to see you think that way and would ask you to reconsider:
Centi does have a minor shareholding by Ayre and this is public. While we understand he is a very controversial figure, let me state here what we do share with him:
The clarity, that in order for blockchain to succeed for every day use cases, and be useful for exactly for the people in e.g. Africa @Milton mentioned, the scale needs to be there. We need commercial grade blockchain applications if we want to grow beyond niches. We need great utility also.

That stated, 75% of Centi shares, thus control, are held with the founders and a local Zürich based angel investor. 25% is held with VC’s, Family Offices and other private investors. Centi is chain agnostic, and also token issuer agnostic, you will see us also sell more and more tokens from other issuers. As there are other tokens on ZSA, we could also easily integrate them.

We are very grateful for all inventors who support us, it takes a lot of money and resources to bootstrap what we have built. Therefore I would urge the community to consider the clearances and partnerships we have built and how this could help your community and users.

I will wait for some more feedback and then in a few days summarize how the proposal could be adapted based on all the received feedback to that point. Thank you.

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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30

All quotes from the most recent documents on github and in this thread:

Technical Implementation: We will develop a Zcash Wallet Proxy that seamlessly connects Centi’s existing application infrastructure to the Zcash network, enabling 25,000+ existing users to immediately access ZEC transactions.

Ultimately, Centi wants ZCG money to fund integration with their systems.

Milestone 1 Focus: Prioritize legal/regulatory validation with our bank

First Centi wants ZCG (about 1000+ Zec at this moment) to fund their lawyers, to make sure their integration will be compliant.

The integration extends Centi’s Direct Payment Protocol to support both ZEC and ZSA tokens, maintaining the platform’s peer-to-peer transaction model while adding privacy-preserving capabilities.

Then, if the legal consultations go okay, Centi wants more ZCG Zec to help accelerate integration with their systems, not because it isn’t possible, but because they didn’t do it yet.

Zec is supportable right now as it is, on various CEXes, and a few DEXes.

Has ZCG ever paid to help any of these entities to integrate with their systems? CEXes are a closer comparison because this would be centralized and administered through the Centi system. Zcash has a peer-to-peer transaction model while adding privacy-preserving capabilities. The only new thing here is it would be accessible somehow via Centi.

ZSA tokens are not yet supported anywhere beyond experimental settings, to my knowledge, including on zcash’s own full nodes and wallets.

Therefore, Centi wants funding to integrate the open source tech ZCG paid (a lot) for already, before it goes live, to get the inside track - without allocating significant in-house research and development or using their own funds to position themselves.

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

Centi wants ZCG to fund the scheme for their network, where ZCG would get revenue kickbacks for pilot funding.

Why not just build it themselves and keep the fees using our open source software? Because they are not sure if it will be worth it, and they are hedging by getting ZCG funds up front.

Option for ZCG: Name/brand the ZSA stablecoin if separate terms are created

They will consider allowing ZCG to put ZCG branding on it instead of theirs, in some way.

If I’m wrong about any of this please correct me.

I presume the value-add is the network they are bringing to the table.

25,000+ active users and 500+ merchants ready for ZSA on day one

so, 25k active users and 500 merchants who might use zcash, if it all works (ZSA and everything else), maybe, only if it appears on the Centi system. Using 325k or 350k (!) of ZCG Zec.

Why is this being considered?

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31

Or, to put it another way, unless I misunderstand things in a significant way, I urge ZCG to reject this application as it stands.

32

ZCG paid for Maya integration

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33

Did ZCG pay directly for Maya platform software?

IIUC Maya does support a variety of coins, and is decentralized in some way.

If there’s a comparison to be made, maybe we should assemble the relevant similarities and differences.

34

@BernhardCenti thank you for your submission. After consideration from @ZcashGrants and sufficient time for the community to provide feedback on the forum, the committee has decided to reject this proposal.

The committee appreciates your grant submission efforts and encourages you to continue as an active member of the Zcash community going forward!

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35

OK understand. Thanks for all the feedback and best of luck to all of you. We will keep an eye on ZSA. :waving_hand:

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