Grant Proposal: ZEX for Zcash: CEX Speed, DEX Security, Simple and Global Access to ZEC

Community Grants Applications
1

Hey this is Cotabe, I’m part of the team building ZEX, and we are here to propose a collaboration that feels like coming full circle.

We have been building a DEX that aims to offer a significantly better solution for the trade-off between CEX-level speed and DEX-level security. We achieved this using an MPC architecture that is actually based on the Zcash Foundation’s implementation of the FROST signing algorithm. In many ways, ZEX’s core security model was made possible by the pioneering work of this community.

Now, we want to bring that value back to Zcash.

We are proposing to integrate Zcash natively into ZEX. Our goal is not just to “list” ZEC, but to provide a high-performance, non-custodial gateway that connects Zcash to Bitcoin, Ethereum, Solana, Tron and any blockchain using the EVM, SVM or TVM without wrappers and without compromising privacy. We believe ZEC deserves a venue where it can be traded at 150,000 TPS while remaining a bearer asset held by the user, not a centralized exchange.

Below is our full proposal. We are eager to hear your feedback and refine this roadmap with you.

Title

ZEX for Zcash: CEX Speed, DEX Security, Simple and Global Access to ZEC.

Application Owners:

Cotabe

Organization Name:

ZEX

How did you learn about Zcash Community Grants*

Looking into the Zcash website

Project Overview

Requested Grant Amount (USD)*

75,000 US Dollars

Category*

Integration

Team Information

Project Lead*

  • Name: Cotabe Moral
  • Role: Head of BizDev
  • Background: 4+ years in Web3 providing BizDev and grant management services to BrightID, Giveth, General Magic, Unitap, Shutter Network, GoodDollar, Funding the Commons, Nounspace, Porters, and Eth.limo.
  • Responsibilities: Project management, business development, partnerships, and grant reporting.

Additional Team Members*

  • Name: M. R. Yazdani

    • Role: Product and Marketing
    • Background: 7+ years in Web3, Core-team member at BrightID, founder of Unitap.
    • Responsibilities: Product strategy, user acquisition, and marketing campaigns.

  • Name: Mahdi Heydari

    • Role: Tech Lead
    • Background: 9+ years in Web3. Founder of Zellular.
    • Responsibilities: Technical architecture, leading the engineering team, and overseeing Zcash integration.

  • Name: Lafa

    • Role: Advisor
    • Background: Simyo Founder with 9+ years in Web3.
    • Responsibilities: Strategic guidance and ecosystem alignment.

Project Details

Project Summary

ZEX is an order-book DEX secured by EigenLayer that delivers CEX-level speed (150K+ TPS) with full self-custody. We propose integrating Zcash into ZEX to provide ZEC holders with private, high-speed, trustless trading and seamless interoperability with Bitcoin, Ethereum, Solana, Tron and other blockchains compatible with EVM, SVM and TVM.

Project Description

ZEX is designed to resolve crypto’s UX vs security trade-off. The speed and usability of Centralized Exchanges (CEXs) versus the security and self-custody of Decentralized Exchanges (DEXs). We built a lightning-fast order-book DEX that eliminates complex wallet setups in favor of email and web2 logging via MPC, charges zero gas, and aggregates unified liquidity. Secured by EigenLayer with over $9 billion in economic security, ZEX delivers a tested throughput of 150,000+ transactions per second.

This project focuses on integrating Zcash into ZEX, transforming it into a high-performance gateway that seamlessly connects ZEC with Bitcoin, Ethereum, Solana, Tron, and other EVM/SVM/TVM compatible chains. ZEX is deeply aligned with Zcash in terms of ethos and technology. We believe that great UX shouldn’t come at the expense of security or privacy. Technically, our MPC architecture currently utilizes the Zcash Foundation’s implementation of the FROST signing algorithm with a few modifications. The Zcash integration feels like a natural fit to come full circle.

Our primary goal is to lower the barrier to entry for crypto trading across all ecosystems. Through this integration, we want to drive significant user acquisition and TVL growth for Zcash. We aim to deliver the following concrete outcomes:

  • Seamless Integration: Full mainnet support for Zcash deposits and withdrawals, verified by on-chain transactions.

  • 150K+ TPS Performance: Validating our sustained throughput capability while supporting ZEC.

  • Liquidity & Growth: Achieving $3M in total liquidity in ZEX pools and acquiring 25,000 total users in 2026H1.

  • Security First: Conducting audits on all Zcash-specific and other relevant components before production launch.

Key Features of this Integration:

  • Privacy Preserved: We will enable private (shielded) deposits and withdrawals from day one. Additionally, it is in our roadmap to include giving users granular control to choose between public or private transactions for their trades in future versions.

  • CEX-Like Experience: Users enjoy instant, 150K+ TPS order-book trading for ZEC without the lag of traditional DEXs.

  • Chain Abstraction: Users can trade ZEC against any asset without being deep in the ZEC ecosystem and without friction. No managing gas fees or switching networks.

  • Self-Custody: Assets are secured by MPC wallets utilizing Zcash’s own FROST implementation and the Zellular sequencer, ensuring users never surrender control.

Proposed Problem

Zcash, as well as crypto as a whole, is trapped in a liquidity and utility silo, squeezed between restrictive Centralized Exchanges (CEXs) and incompatible Decentralized Exchanges (DEXs). While many major CEXs list ZEC, their reach and utility are limited, frequently enforcing “transparent-only” transactions that strip Zcash of its core privacy value proposition and “geofencing” access in key jurisdictions. More critically, these platforms force users to rely on opaque custodial models where they have no visibility into the actual solvency of the exchange. This centralization turns a privacy-preserving bearer asset into a permissioned database entry, exposing holders to the constant risks of platform insolvency, account freezes, and seizure.

On the decentralized side, Zcash remains technologically isolated due to the difficulty of integrating its UTXO architecture with the EVM-dominated DeFi landscape. Consequently, most “Zcash DeFi” today is actually “Wrapper DeFi” (e.g., WZEC), which forces users to rely on fragmented liquidity and wrapping mechanisms. This reliance introduces significant bridge risk, where users must trust that the underlying collateral is safe from the frequent hacks and smart contract exploits that have plagued cross-chain bridges. Without a native, chain-abstracted solution, Zcash lacks direct, secure connectivity to high-volume ecosystems like Bitcoin, EVM/SVM/TVM ecosystems, effectively stalling its adoption and TVL growth.

Proposed Solution

We will integrate Zcash into ZEX, bridging the gap between performance and decentralization. This offers the best of both worlds:

  • Speed: We utilize an off-chain matching engine (Cora) validated by a sequencer (Zellular), enabling ZEC trading at speeds orders of magnitude above traditional DeFi (over 150K TPS).

  • Access: By adding Zcash to our supported networks (alongside EVMs, SVM, and Bitcoin), we break down silos, allowing ZEC to access liquidity from all major chains.

  • Security: Unlike CEXs, ZEX is non-custodial and verifiable, leveraging EigenLayer’s pooled security. Only users have control over their assets, not intermediaries.

  • Privacy: Deposits and withdrawals will be private from day one. Eventually users will have the option to choose whether their trades are public or private, leveraging Zcash key features.

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Solution Format

  • Software Integration: Full support for Zcash deposits, trading and withdrawals within the ZEX interface.

  • User Interface: A seamless trading terminal for ZEC pairs.

  • Infrastructure: Deployment of “Porta” (our D/W module) nodes compatible with the Zcash network.

Dependencies

EigenLayer: For shared security and sequencing (already integrated).

Technical Approach

ZEX operates through four interconnected components. We will adapt these to support Zcash:

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  1. Porta (The Gateway): We will upgrade Porta to monitor Zcash blocks for deposits and construct release transactions for withdrawals.

  2. MPC Wallets: We will implement Zcash-compatible key generation within our MPC architecture to ensure non-custodial management of ZEC.

  3. Cora (Matching Engine): No changes needed; once bridged, ZEC trades as a unified asset on our order book.

  4. Zellular Sequencer: Will order and finalize Zcash-related state changes.

Upstream Merge Opportunities

“Porta” as a Standalone Zcash Crypto Gateway: Beyond ZEX, the “Porta” module has the potential to be refactored into a general-purpose gateway SDK for the Zcash ecosystem. This would be a massive unlock for builders, allowing Zcash applications (wallets, privacy tools, subscription services) to accept deposits in ETH, SOL, or BTC and automatically settle them as ZEC on the backend. While our current focus is tightly coupling Porta to the ZEX matching engine, we see a clear path to decoupling this logic in the future. With additional resources and community coordination, this could evolve into a public good that solves the “onboarding friction” problem for every Zcash developer, not just our users.

The only potential requirement for forking would be to modify low-level Zcash libraries to support specific curves or signature schemas needed for our MPC solution.

As we are working on an entirely new exchange, coordination with Zcash maintainers is likely limited to the maintainers of libraries we utilize, such as FROST.

Budget

Hardware/Software Costs (USD)*

$18,000

Hardware/Software Justification*

Costs for cloud infrastructure (AWS/Ankr) to run high-availability Zcash nodes, the Porta bridge validators, and the Zellular sequencer test environments during development and beta. The cost is an estimation for six months of operation; we expect to pay for these costs ourselves after the initial period.

Service Costs (USD)*

$25,000

Service Costs Justification*

Allocated for security audits of the Zcash-specific integration code (Porta module and MPC signature logic) to ensure user funds are safe before mainnet launch. We are working with Sherlock and in the next two weeks, we will have the audit of the EVM and SVM.

Compensation Costs (USD)*

$32,000

Compensation Costs Justification*

  1. Development Phase (Months 1-4) We have structured the development sequentially to ensure focused execution.
  • Blockchain Engineer (Months 1-2): Focused on building the “Zcash Module”.
    • Rate: $5,000/mo × 2 months = $10,000
  • Backend Engineer (Months 3-4): Focused on integrating the Zcash Module into “Porta” (our bridging architecture) to enable cross-chain deposits/withdrawals.
    • Rate: $5,000/mo × 2 months = $10,000
  1. Maintenance & Stability Phase (Months 5-8) Post-launch, we transition both developers to a retainer model to handle immediate bug fixes, node updates, and stability improvements during the public beta.
  • 2 Developers (Retainer): Ensuring rapid response to any mainnet issues.
    • Rate: $1,000/mo (per dev) × 2 devs × 4 months = $8,000
  1. Project Management (Months 1-8)
  • Project Lead: Working part time on the Zcash integration dedicated to coordinating the engineering team, managing the audit process, and handling all reporting/communication.
    • Rate: $500/mo × 8 months = $4,000

Total Compensation Request: $32,000

Total Budget (USD)*

$75,000

Previous Funding*

No

Previous Funding Details

N/A

Other Funding Sources*

Yes

Other Funding Sources Details

We have secured a $400,000 grant from EigenLayer and raised over $1 million in pre-seed funding. This Zcash grant requests specific funding only for the costs related to the Zcash network integration, not platform core development.

Risk Assessment

Implementation Risks*

  • UTXO Complexity: Integrating Zcash’s UTXO model into our bridge architecture (Porta) is complex. However, we have successfully integrated Bitcoin (BTC), which shares a similar architecture, significantly de-risking this process.
  • Liquidity Bootstrapping: There is a risk of low initial trading volume. We mitigate this by aggregating liquidity and launching with a user acquisition campaign targeting existing ZEC, BTC, and other crypto holders, especially OGs that are DeFi and Privacy maxis.

Potential Side Effects*

  • Centralization Vectors: While our goal is decentralization, the initial “Porta” nodes are permissioned during the Beta phase for security. We plan to decentralize this validator ASAP.

Success Metrics*

  • TVL: $1M+ USD worth of ZEC
  • Trading Volume: $10M+ USD worth of ZEC on ZEX
  • Performance: Validated 100K TPS for ZEC pairs in a test environment.

Project Schedule

Startup Funding (USD)*

$28,000

Startup Funding Justification*

To cover the first two milestones of the grant in advance and get the product ready for an audit and the beta launch.

Milestone Details*

Milestone 1

  • Amount: $0 (Covered with the startup funding)

  • Expected Completion Date: 2026-04-30

  • User Stories:

    • “As a Zcash Community Member, I want to see a successful testnet transaction between Zcash and the ZEX bridge, so that I have proof that the integration is technically viable.”

    • “As a Technical Auditor/Developer, I want to view the initial open-source bridge repository, so that I can verify the architecture aligns with Zcash security standards.”

  • Deliverables:

    • Zcash compatibility assessment document outlining required changes to the Porta module.

    • Initial codebase for the Zcash Porta (bridge) module committed to GitHub.

    • Fully operational Zcash testnet environment for internal development.

  • Acceptance Criteria: A public GitHub link to the initial repository and a technical report confirming the testnet environment is active.

Milestone 2

  • Amount: $25,000 (Allocated for Security Audit)

  • Expected Completion Date: 2026-06-30

  • User Stories:

    • “As a Zcash Holder, I want to generate a unique, non-custodial deposit address, so that I can prepare to move funds without relying on a centralized exchange wallet.”

    • “As a Privacy Advocate, I want to know that the deposit addresses are generated using FROST/MPC, so that I am assured there is no single point of failure for my funds.”

  • Deliverables:

    • Implemented MPC key generation logic compatible with Zcash specificities (FROST).

    • Functional “Listener” service that detects ZEC deposits on Testnet.

    • Functional “Broadcaster” service that constructs and sends ZEC withdrawal transactions.

    • Alpha testing report showing simulated high-frequency trades.

  • Acceptance Criteria: A video demo or log file showing a complete lifecycle: MPC address generation → Testnet ZEC Deposit → Internal Balance Credit → Withdrawal Request → Testnet ZEC Receipt.

Milestone 3

  • Amount: $5,500

  • Expected Completion Date: 2026-07-31

  • User Stories:

    • “As a High-Frequency Trader, I want to execute ZEC trades on the Beta platform with instant finality, so that I can test the 100K TPS speed claims.”

    • “As a Risk-Averse User, I want to see a completed security audit of the bridge module, so that I can feel safe depositing real assets during the public launch.”

  • Deliverables:

    • Security Audit Report covering the Zcash Porta module and MPC signature logic.

    • Deployed Beta version of ZEX with ZEC/USDT and ZEC/ETH pairs enabled.

  • Acceptance Criteria: Publication of the Audit Report and on-chain verification of the first 100 mainnet ZEC trades executed by beta testers.

Milestone 4

  • Amount: $11,000

  • Expected Completion Date: 2026-09-30

  • User Stories:

    • “As a Retail User, I want to trade ZEC against assets like SOL or ETH, so that I can easily diversify my portfolio.”

    • “As a Zcash Holder, I want to see a marketing push bringing new users to the ecosystem, so that the liquidity for ZEC increases.”

  • Deliverables:

    • Optimization patch deployed based on Beta user feedback.

    • Public Launch.

    • Marketing campaign execution (AMAs with Zcash community, social media push, referral program launch).

  • Acceptance Criteria: ZEX platform accessible to the general public with ZEC deposits enabled, plus a marketing report showing reach and engagement metrics.

Milestone 5

  • Amount: $5,500

  • Expected Completion Date: 2026-10-31

  • User Stories:

    • “As a Zcash Community Grant Committee Member, I want to review a final report of users and volume, so that I can verify the grant funds achieved the intended impact.”

    • “As a New User, I want to watch a video tutorial on how to bridge my ZEC to ZEX, so that I can start trading without confusion.”

  • Deliverables:

    • Final Close-out Report detailing technical achievements and lessons learned.

    • 3-5 minute video demonstration/tutorial of the integration.

    • On-chain metrics dashboard showing Total Value Locked (TVL), Volume, and Unique Users for ZEC pairs.

  • Acceptance Criteria: Submission of the Final Report and Video to the Zcash Community Grants forum, and a live link to the metrics dashboard.

Links & Resources

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