Let's bring stablecoins to ZSAs!

[zBruh]

if i remember correctly, i remember matthew green at zcon saying a stable coin would send zcash to the shadow realm. in other words, it would be attacked by regulators

[ryan.taylor]

@zBruh

matthew green at zcon

The Zcon videos are all on one Zcon playlist now.
Maybe you can find this and share it.

[hanh]

What is planned for NU6?

[vivek]

The ZSA functionality as of now, and also with the Swaps functionality, maintains the fully shielded nature, so as it stands, we would not be able to perform compliance, including freezing or blacklists.

That’s what this proposal is aiming to improve – we are suggesting adding functionality that will let some compliance requirements be met. Importantly, we are doing this in a “per-Asset”, sandboxed way; this functionality will only be present for Assets that switch it on, and Assets that do not do so would continue to function with the privacy that is currently present on Zcash. The assumption is that stablecoins over ZSAs would switch it on so they meet regulatory requirements.

[daira]

I have a technical question for Qedit: can an Orchard-like circuit that implements verifiable encryption be implemented within the current k = 11 circuit size? Could it do so with further optimization? What’s the minimum part of the plaintext that needs to be verifiably encrypted?

I am quite skeptical given the cost of circuit-friendly ciphers that have had adequate cryptanalysis. But maybe it can be done with a wider circuit, so that we don’t incur a full doubling of circuit size. Or stablecoin transfers can be in a different indistinguishability set, but that’s not ideal.

If we think that it might be possible to stay within k = 11 but don’t know how to do it yet, then that would motivate activating ZSAs without stablecoin support in, say, NU7, and leaving that support to a later upgrade such as NU8. That might be necessary anyway because my intuition is that including the verifiable encryption changes (which also changes the algorithm outside the circuit) is likely to exceed the complexity budget for one upgrade.

[vivek]

@james_katz

How can ZCG commit to this proposal if they don’t know the duration, hence they don’t how how much it will cost then in the long run?

I could have been clearer: the timeline is for approximately a year. Our proposal to ZCG will follow our usual format of breaking up the overall task into multiple milestones (as described), with specific amounts for each deliverable, it will not be open-ended.

@Shawn

why not find other pressing matters that they could apply their skills to? Like testing upcoming POW/POS structure? Or adding other Zebra functionality?

Seems like a good place to plug that we recently completed a transaction testing tool for Zebra that helps generate transactions for Zebra nodes, that we hope wallets find useful while testing on Zebra

@noamchom

In the generic sense, I think its a good precedent that if a grant is for more than a half of a million dollars (pick your favorite magic number), then there ought to be a soft assumption that the grantee(s) would be expected to stay in the ecosystem longer/ work under additional big ticket grants.

We at QEDIT (and I, personally) have really enjoyed working in the Zcash ecosystem, and the opportunity it gives us to design and build things that align with our views on privacy.

[vivek]

We’re looking into this, we’ll get back to you and discuss in our meeting on Tuesday.

[Jgx7]

Based on ECC response, they did not intend to add ZSA to ZcashD, which means ZcashD must be deprecated. So that is your plan B.

Qedit is ready for plan A or plan B, but sounds like they are working more on Zebra only based on ECC guidance.

Foundation is ready for plan A and plan B.

It sounds like deprecating ZcashD should be a top priority for all; is it? Should Qedit step in to help deprecate ZcashD if ECC has other priorities?

Its hard to see anything more important than deprecating ZcashD (which includes ZSAs/Stablecoins) and programmability.

[zerodartz]

lets wait a bit imo. i get everyone want to rush.
but lets say market gets stronger end of year - we could use less ZEC to get stablecoins done then.

[Jgx7]

we have been waiting for at least 3 years; and some people longer this is not even close to a rush…it feels more like a very very slow walk (intentionally in the past to prioritize zec is fiat vision). zsas/stablecoins and programmability is what will help make it go up. That is value added development.

i agree to wait until the price goes up for so many things. non critical, non development projects (and many are not needed at all ever);
we should not be waiting on ZSAs, stablecoins, programmability. the rest of the world is building out DeFi at light speed while we try not to rush.

[noamchom]

@Jgx7

It sounds like deprecating ZcashD should be a top priority for all

For god knows what reason (this is sarcasm, I know they have a rationale behind it), ECC is building the 8th ZEC-only wallet for the ecosystem, rather than going all hands on deck to deprecate zcashd/ take Zcash to the Zebra era (programmability, et al).

[conradoplg]

I’ve been skeptical about Zashi, but it involved a lot of work on the Rust wallet backend to make it more usable, and it’s likely that it will be an important piece in providing the wallet functionality that is required to deprecate zcashd. So the effort on it hasn’t been completely “wasted” even if you think Zashi is useless. (But I do believe it’s shaping up to be a good wallet)

[dismad]

@silentZcollector

i don’t think that this will get used anywhere near as much as stables would.

there is no real incentive for ETH users to bridge their ETH to zcash, Aztec for example will have a shielded pool themself and will most likely provide an even larger shielded pool than Zcash does.

So will Namada, but they both don’t have orchard, and that is a huge incentive.

@silentZcollector

we don’t even have a single HWW that currently supports shielded ZEC

I think the better question to ask about this, is who is creating the red tape? We have grants, we have folks ready to make it, but alas, only transparent or “stablecoin” support. Governments around the world want us to use stablecoins, which will be steamrolled into the latest tech CBDC. Pin it.

“Crypto” stables are either too expensive to use on chain, or outlawed, how cute.

@januszgrze

Can just use Aztec on ethereum. will be live before ZSAs. Thinking ethereum users will use zcash is probs a bit optimistic.

Which would be cheaper to use?

I’m not sure why more folks aren’t jumping into the best tech now, while its cheap to accumulate and move. Won’t always be the case as the tide turns.

[Jgx7]

@dismad

Governments around the world want us to use stablecoins, which will be steamrolled into the latest tech CBDC. Pin it.

Governments do control the monetary policy. That wont change. You are going to need to wrap your head around it…Just like you want to control ZEC and its direction, governments want to control money (just like you do). But you are missing the most important part. People want stability (once you understand this, you will realize we need stablecoins because ZEC will never be stable in the short run even if we can get it to be a SOV in the long run). Properly collateralized stablecoins (or collateral backed ZSAs) offer stability for day to day transactions 100x better than ZEC, BTC, or anything else. It doesn’t have to be government bond backed as collateral; but government backed tends to offer the most stability in most developed countries whereas it offers very little stability in many undeveloped countries. The key is the collateral that backs the stablecoins and enabling people to create their own…The best tech doesnt win, a lot of scientists and engineers have learned this the hard way. I hope we dont fall into the we have the best tech trap. We dont have the best package…It’s the best bundle of which the product is one part that wins. I believe we need to create a marketplace of money (transaction speed, product attributes that meet customer needs matter). It seems to me that privacy based ZSAs, with programmability, and collateralized stablecoins get us to this place. Cheaper isn’t the best, sometimes its cheap for a reason. We need to offer the best value. So, we should be partnering with anyone, including governments, marketplaces, paypal, stripe, and anyone else that will allow for a basic level of privacy (the opt in scenario), and where the base layer also has total privacy. Importantly, we need ZSAs/stablecoins to get the scale required to keep costs low (i hope you dont think just because we charge customers almost nothing that the cost per transaction is low for Zcash; real costs for Zcash are high not low).

Yes. ZEC looks cheap. But we can still lose 100% if we continue thinking and funding the ZEC is fiat vision. (spoiler alert - for all the talk about privacy, ZEC is mainly not private: T address).

[Dodger]

@daira

In any case, I strongly believe that it is not safe or feasible to rush ZSAs into NU6… The auditing required for the circuit changes alone is very substantial.

C’mon, nobody’s suggesting what we rush to deploy ZSAs in an unsafe manner or without the approprirate audits.

This is about ensuring that ECC’s and ZF’s priorities are aligned with the Zcash community’s desire to see ZSAs prioritized.

[daira]

@Dodger

This is about ensuring that ECC’s and ZF’s priorities are aligned with the Zcash community’s desire to see ZSAs prioritized.

Indeed, but it seemed as though there were unrealistic expectations that it would be possible to activate them in NU6, so I wanted to adjust those expectations.

[Jgx7]

@daira

were unrealistic expectations that it would be possible to activate them in NU6

It would help at least some of us in the community who want to see Zcash become a blockchain of money if ECC provided the expectation that

a) deprecating ZcashD is our number 1 priority after Zashi is released.
b) Then ECC and ZCG along with the foundation are 100% focused on we have the resources to bring ZSAs, stablecoins, and programmability to the Zcash blockchain after ZcashD is deprecated.

yes. I have seen Josh’s roadmap; but 1Q25 is a year away to deprecate ZcashD, which means ZSAs are likely late 2025 and who knows when for stablecoins. Seems to me we need to move a lot faster on deprecation. Can ECC get aligned with the Foundation and Qedit to go all hands on deck to deprecate ZcashD? It seems like if all 3 orgs and Qedit aligned on this, the team/group as a whole could help get it done quicker. The current roadmap still looks like the ZEC is fiat (spending) theme is dominating the development pipeline. The focus is on payments and wallets, which means ZCG will want to spend on 3rd party wallets/marketing/media. So many of us want to see ZEC as SOV (saving) with ZSAs/stablecoins (spending) and smart money (programmability for ecosystem platform).

[joshs]

@Jgx7

yes. I have seen Josh’s roadmap; but 1Q25 is a year away to deprecate ZcashD, which means ZSAs are likely late 2025 and who knows when for stablecoins

The plan is to depreciate zcashd before ZSA activation in NU7, which is anticipated to be as early as Q1, pending audits and testing.

[noamchom]

@joshs

The plan is to depreciate zcashd before ZSA activation in NU7

Is my reading of the technicalities correct here, Zcashd “deprecation” whatever that technically means will not involve a network upgrade(?)

Is deprecation really just the act of specifying an end of services/ availability date on the calendar?

NU6 - Halving/ block reward determination
NU7 - ZSA

The “deprecation” of Zcashd can happen at any arbitrary point in between/ or outside of the scope of the two network upgrades(?)

[joshs]

That’s correct, but before ZSAs are activated because they won’t be supported in zcashd.