Quick Update: Last week, I contacted Binance to propose several alternative solutions that could potentially resolve their concerns. These alternatives are simpler to implement than Binance’s suggestion of creating a new transparent address type. I have requested Binance to review these alternatives and then arrange a call with their wallet and listing teams and me, @joshs, and @Beth.
Alternative Solutions
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Required return address (h/t: @squirrel)
a. Binance introduces a new policy requiring Zcash users to provide a return t-address on the “Deposits” page.
b. A deposit address dialog prominently displays a notification that failure to provide a return address will result in the funds that were sent from a shielded address being burned after a certain period of time.
c. Binance should communicate this policy change clearly to its users through announcements, emails, and notifications, ensuring that all users are aware of the new requirement.
d. If a return address is provided, any ZEC sent from a shielded address to the user’s Binance address is automatically returned to that address. -
Viewing key submission (h/t: @joshs)
a. Users have the option to submit a viewing key to detail the source of funds.
b. Funds from shielded addresses are not available for trading until a valid viewing key is received and verified.
c. If a valid viewing key is provided, the ZEC can be deposited directly on the exchange.
d. Users receive multiple email and UI warnings emphasizing that non-compliance will result in the burning of deposited funds after a specified grace period.
e. Note: This solution can work together with Alternative Solution #1: Required return address. -
Payment URI (h/t: @hanh)
a. Binance would need to integrate a payment URI into the deposit QR code, which currently reflects the t-address.
b. Transforming the URI into a QR code would take an estimated day or two of development time.
c. Zcash wallet developers would extend the payment URI specification with an “exclude” value to specify the desired pool for transactions.
d. The wallet would recognize the URI and exclude shielded ZEC from being sent to Binance.
e. Note: This solution can work together with Alternative Solution #1: Required return address. -
Payment disclosures (h/t: @nuttycom & @str4d)
a. Binance would need to support receiving funds from a shielded address, so that they could support receiving payment disclosers in the memo field.
b. Assuming Binance is using Zcashd, this change is relatively simple to make.
c. A payment disclosure would be provided in the memo field and would prove to Binance the source address of the funds.
d. Binance would need to implement a policy that requires all Zcash deposits include payment disclosures.
e. If payment disclosers are not provided, deposited funds are burned after a grace period. Alternatively, if implemented, Binance could donate those funds to the Zcash Sustainability Fund.
f. Note: This solution can work together with Alternative Solution #1: Required return address.