Hi Zeeps!
As I was having coffee this morning, a family member asked, “Are you trying to figure out how to save crypto today?” I smiled and said, “No, I’m trying to figure out how to save the world.” Many days, it feels that heavy.
I was actually thinking about the crypto apps versus the infrastructure debate in crypto. Maybe I’m just simple, but I believe Haseeb has it right—crypto’s killer app is money. And despite stablecoin growth, regulated fiat-based tokens won’t bring the freedom we need. What we need is private, non-state controlled electronic cash.
Bitcoin was supposed to be electronic cash. However, it’s not as simple as building a protocol that sequences transactions and stores data across a peer-to-peer network. Satoshi didn’t design Bitcoin to be a surveillance tool, but that’s what happened. Its transparency gave birth to a crypto-surveillance industry. Add in Bitcoin’s scaling problems and high fees, and we ended up with “digital gold” instead of the peer-to-peer electronic cash it was meant to be.
Zcash is cash-like, using cryptography to support transactions that reveal as little information as possible. But Zcash isn’t yet ready for mass global adoption. It doesn’t yet scale, and the application stack needed for all the normies around the world who need this today and will increasingly need it tomorrow is not complete. Maybe it’s a good thing the whole freakn’ world hasn’t figured out they need Zcash yet.
We gotta move fast, though. Let’s embrace the brutal facts for a sec. We can whine about why the market doesn’t seem to care about privacy, or we can build things people want, with privacy baked in. They may prefer private transactions over bare-ass exposing alternatives, but they REALLY want apps they enjoy using.
Viral apps that stick are habit-forming. True, some of them manipulate people and are a net drag on humanity, gutting our souls and filling the emptiness with hour after hour of mind-numbing content. That’s not what we’re building, but there are some good lessons to be learned.
Habit-forming apps are simple and enjoyable to use. They fit within the cue-routine-reward system, where a trigger drives us to the routine and delivers the reward that reinforces a feeling like we want to do this again. They have clean and intuitive UIs that are personalized to our tastes and needs. They often provide rewards for actions, stimulating endorphins. They are frequently social because we’re social creatures. They fit in and become part of our everyday lives, part of our rhythms.
Yes, we’d love to see the world habitually use private and secure digital transactions. However, we can’t just build the infrastructure and shout, “You should use this because it’s in your best interest and your human right!” and then ignore more practical incentives.
Follow me?
Look, you Zeeps are a hardcore tribe. I love you all, even you Zeeps who occasionally troll me. 
But you all are exceptional, and the masses won’t use ZEC voraciously without the right incentives.
Here are incentives I think matter:
- Increased wealth
- Reduced time commitment
- Reduced hassle
- Rewards for behavior
- Low risk of loss or other harm
- Social reinforcement
- Fun
That means the apps we build on Zcash must be infused with these things, and the protocol must support them. What are some ideas for doing that? I’m glad you asked. Here are a few ideas for privacy-protecting non-custodial Zcash apps:
- Price and wealth tracking against legacy state-issued currencies of the user’s choice.
- See who past spends were to, what they were for, what the relative price was then, and what it would be at today’s exchange rate.
- Contribute, along with others, to paying towards one bill or pool.
- Create automated payments that don’t require a login to confirm.
- Earn for using shielded ZEC using rebates generated through third-party partnerships or mechanisms encoded in the protocol, as described below.
- A single recognizable address, ideally one that I can share easily, that obfuscates different types or address rotation.
- Spend ZEC with someone who wants to accept a different form of currency. FYI, Flexa integration provides one piece to this puzzle.
- Send ZEC to someone who may not yet have a wallet that supports ZEC.
- Zero latency. I can immediately see my balance and send or receive a payment in less than two seconds.
- No seed phrase but with social or cloud-based key recovery.
- Biometric 2FA.
- Theft protections that include whitelists, multisigs, and timelocks.
- Transferability so that family or friends can access funds I control should something happen to me.
- Payments for the use of capabilities hosted on other chains without having to think about bridges.
- Access to yield through delegation to validators or by providing liquidity to a DEX like Maya.
- Swaps with low spreads and latency.
- Online spending as easy as Shop.
- AI integration/bots to issue payments on our behalf, especially as micro-payments become more pervasive.
- Auto top-ups to purchase more ZEC if balances reach a certain threshold.
Yes, we can do all these things! I’m sure you all have other ideas, too.
Some of these can be handled at the app layer, but a number can be enabled or augmented in the Zcash protocol.
We might consider how the chain itself might be used to incentivize use through rewards. Credit card companies use a standard tool to provide cash back on purchases funded by annual payments, fees, and interest payments. With Zcash, this might be tied to other community objectives.
A simple reward mechanism might be to allocate a portion of transaction fees to reward users on a per-shielded transaction basis, where the reward is less than the transaction fees paid to discourage attacks.
In this model, only shielded ZEC transactions receive rewards. Fees generated by transparent transactions or Zcash Shielded Assets (ZSAs) are not eligible.
I believe @nathan-at-least once suggested that we might tax the storage of ZEC in legacy pools (transparent, Sprout, Sapling, etc.) or ZSAs to incentivize the movement of funds to the most current shielded pool. Those funds could be used to reward the use of shielded transactions in the most current pool.
Rewards might also be distributed for voting in future on-chain governance mechanisms or by serving as a trusted delegate.
The community might also consider creating a mechanism for collateralizing ZEC so that users can use credit rather than liquidating their ZEC holdings. A portion of the interest paid on the credit could be used to reward users.
There are likely other solutions to providing rewards without disclosing spending habits or volumes. My rough thinking might have flaws, but using incentives to drive behavior should be considered.
We should consider these options and consequences when designing the Zcash Sustainability Fund and Crosslink (PoW / PoS hybrid). FWIW, I’m don’t think that fees, distribution, and impact on long-term security and user incentives have been fully considered as we race ahead toward their implementation.
For example, the move to a hybrid PoW/PoS model will split fees between miners and validators. MEV will only be possible for transparent transactions. Will there be enough to pay miners, validators, and delegators adequately for their services, even before we consider money set aside for a “dev fund” or any possible reward mechanism?
Here are some very high-level, hand-wavvy numbers for the sake of conversation. Let’s say Zcash handles as many transactions as Visa, roughly two thousand transactions per second. At that volume, let’s assume the price of ZEC rises to $3,500 per token, based on increased demand, with a static transaction fee of .00001 ZEC. That would generate $2.2B per year in transaction fees. Is this enough? By contrast, Visa generates more than $32B annually in revenue. Of course, this doesn’t include block subsidies (trending toward zero over time), but I think someone should model this out, and I haven’t seen anything yet.
Qedit is currently working on a fee model for ZSAs, which I assume will include fees for minting and redeeming assets as well as transfers and swaps. I look forward to seeing what they come up with.
In addition to considering subsidies, fees, and distribution, we should, of course, continue to work on scalability to reduce current latencies and ensure that Zcash can deliver speed and capacity while maintaining low fees. Oh, and this must all be upgraded to post-quantum crypto. There’s that!
It’s easy to get caught up in the crypto industry’s madness and theoretical debates about this and that. As for me, I’m focusing on what will drive the adoption of Zcash as the best place to privately store and spend money outside of the legacy financial systems: peer-to-peer electronic cash.
We are still so early. We have so much to do.
If we get this right, we have got a shot at saving the world. That’s my incentive. What’s yours?
It’s late, and I’m also incentivized to get some sleep. Let’s wrap this up for today and get back after it tomorrow.
Here is what else the folks at ECC were figuring out this this week:
Zashi
Flippn’ Apple. Our latest release is stuck in review. They are AGAIN asking for more details about our partnership with Coinbase.
Design
- Finalized updated screenshots for AppStore
- Updated background of the welcome screen
- Progressing with Transaction History redesign
- Updating designs based on Product and Development feedback
- Working on Android screenshots for PlayStore
- Started working on updating the onboarding flows
- Started working on a secret design project
iOS
Unique Installs: 3.48k
Total Downloads: 4.12k
Rating: 4.9 ★
- Consolidated button designs across the whole app and adjusted many screens to follow the change (paddings, rounded corners, etc.)
- Finished 1.2.1 version and submitted to the AppStore (
release blocked by AppStore review atm) - Coinbase logo is visible in the Settings screen, part of the Integrations title
- Gradient background for the welcome screen implemented
- SDK 2.2.4 released and tested, issue with progress reporting forced us to revert to 2.2.3
- Fixed a bug reported about multiple scanned QR codes at the same time, which broke the navigation
- Implemented a solution that handles insufficient funds for Request ZEC scan flow
- Flexa 1.0.4 adoption & testing, identified a bug that freezes Zashi but resolved it on our side before Flexa finds a proper fix. The concept of Total vs. Available Balance has been implemented.
- Localized all new texts in Zashi
- Redesigned Settings flows:
- About
- Private Data Export
- Reset Zashi
- What’s New
- Recovery Phrase
Android
Total Install Base: 2.10k
Total Installs (incl. Open Beta): 7.36k
Rating: 4.690 ★
- Finalizing Address Book storage (
local + 
remote) - A new QR code detail screen has been added
- Redesigned Scan UI
- Transaction History item has been redesigned - added an option to create a contact from an unknown address
- Finalized ZIP 321 - added Pacu’s library
- Flexa 1.0.4 - tested and reported issues (blocker with transaction callback not firing)
- Working on the Request ZEC flow - UI partially implemented, business logic prepared
- Pushed the first build for team testing into Closed testing track
Zcash Core
- Repaired the testnet (and filed issues for the problems discovered: zcash#6959, zebra#8907)
- Released zcashd v6.0.0.
- Supports NU6 on mainnet
- Reduces the default block unpaid action limit to 0
- Released librustzcash crates to fix the note commitment tree bug and support NU6.
- In progress:
- Fix for a scan/recovery progress regression in the latest SDK. iOS SDK update (2.2.5) has been released.
- Fleshing out PCZT in support of Keystone
- Writing up Crosslink 2.
- Note management.
Other
We planned to release a revised Q4 roadmap this week but delayed it for a week to reevaluate product research activities. We currently plan to release something next week.
We are making some changes to our marketing approach in support of Zashi and education around Zcash. To that end, @adjychris and his Adjy team will depart in a little over a month. Chris, Richard, and the team are stars, and I deeply appreciate all they have done for Zcash, our mission, and ECC over the last 6+ years. We will soon open a full-time Director of Marketing and Communications role. Stay tuned. Spread the word.
ICYMI, the ZIP editors, released a best-case calendar for zcashd deprecation and NU7. This is a cross-functional effort across many parties working together. Super cool to see this level of collaboration. @pacu also posted a specific update on zcashd deprecation efforts. Keep in mind that this calendar is from an engineering perspective. I’m hoping that during this time we’ll see someone step forward to be the first to commit to issuing ZSAs.
@yasserisa is at it again. He published a wiki on how to setup your own lightwalletd infrastructure on Docker. Do it!
Oh, and don’t forget your video submission!
Incentivized.
Onward.
