Minor Grants: Research on Zcash's KYC-free infrastructure

Hi everyone, I wanted to publish my ZF Minor Grants application in the forum to gather feedback from the community. I would like to spend some time researching Zcash’s KYC-free (aka non-KYC) infrastructure, understand where we have gaps, and present actionable findings to the community at Zcon4.

Please see my application below.

What is the name of your project?

  • Research on Zcash’s KYC-Free infrastructure

Who is the primary contact or organization for this project?

  • Ian Sagstetter

What USD ($) amount are you requesting?

  • $6000.00 USD

Are you requesting payment up front or upon completion of the grant?

  • We are happy to receive the grant funding after the grant deliverables have been met.

Describe your grant

Pitch: A one-liner elevator pitch version of your proposal

Funding a research grant to research, analyze, and document non-KYC options available to Zcash users, and present further recommendations to the community.

Description of Problem, Opportunity, and Solution:


I believe that most Zcashers acquire Zcash through buying it on a centralized exchange. This means that they submit identification verification (aka Know Your Customer {KYC}) and the exchange, who is susceptible to data hacks and leaks, knows how much Zcash you have purchased.

I also believe that Zcash needs to have focused efforts on increasing its peer-to-peer adoption. We can’t just Zodl, we need to spend!

If Zcashers are onboarded only through centralized exchanges, there are a large number of people that are looking for a return on their investment. This means there are less incentivized people who’d use Zcash in a peer-to-peer fashion.


Due to a functioning, Orchard-first, Zcash wallet being widely available on major app stores, it is easy to onboard new Zcash users. Also, there are a number of tools we can use to help onboard new users without sending them to a centralized exchange (the main one being Free2z). There are also a number of non-KYC exchanges that can help users swap ZEC into other tokens should they choose to.

With infrastructure in place, we can create resources that encourage peer-to-peer, shielded Zcash adoption. A simple thought exercise:

When we want money IRL, we create a bank account and then submit bank details to an employer who pays us through a bank transfer.

In Zcash, you could download a wallet, complete work online for someone and then give them a shielded address to send the payment.

Why Zcash over centralized banking? No KYC and potential censorship!

But, these tools are segmented, and it’s difficult to understand how all of them fit into the ecosystem. We also need better documentation on the various privacy guarantees that each solution has.


I propose that I spend 3.5 months researching and analyzing Zcash’s current non-KYC infrastructure, analyze and document current solutions, and present further recommendations to the community.

The main purpose of this research would be to show Zcashers what options are available to them, creating onboarding documentation on the best way for users to join Zcash via non-KYC infrastructure, and manage a comms sprint going into, and following, Zcon4.

The solution will be structured as:

-Research site (similar to this structure, albeit less technical)
-User guides (similar to ZecHub)
-Zcon4 presentation on research and recommendations
-Comms sprint (similar to ZecHub style comms while I managed it)

Solution Format: What is the exact form of the final deliverable you’re creating?

The format of the work will be:

A simple research website documenting the research

-Contains research on:
–Current Zcash non-KYC infrastructure
–Other ecosystem’s non-KYC infrastructure
–Gaps and potential solutions to said gaps
–User guides similar to ZecHub

-Contains guides on:
–How to acquire ZEC w/o KYC
–How to spend Zcash w/o KYC
–How to exchange Zcash for other cryptocurrencies to spend

-A comms sprint leveraging the ecosystem’s communication channels
–Twitter Spaces, Free2z Live Streams, ZFAV meetups, etc.

-Zcon4 presentation
–If speaking application accepted

Dependencies: What external entities is your project dependent on? What involvement is required from ZF, ECC, and/or other external organizations? Who would have to incorporate your work in order for it to be usable?*

No dependencies to complete work. However, it would be nice to do meetings with community members and ecosystem partners, so they’d have to be willing to meet with me for that to happen!

Execution risks: What obstacles do you expect? What is most likely to go wrong? Which unknown factors could jeopardize success? Who would have to incorporate your work in order for it to be usable?

One execution risk is that this would be my first research project. But, I’ve consistently proven that I can deliver results for Zcash-specific work, even if I lack experience in the domain. I.e. role at ECC, ZecHub.

Another is organizing calls for research. It’d be great to speak with community members on current infrastructure and understand where they feel gaps are, what they think are good solutions, and what solutions they’d want to see built.

I’d also like to speak with partner organizations, who provide non-KYC infrastructure, to understand why they support, or don’t support, Zcash. I was pretty good at cold outreach back in the day, so I don’t doubt I could organize some meetings through cold outreach and community introductions.

Schedule and Milestones: What is your timeline for the project? Include concrete milestones and the major tasks required to complete each milestone.

Milestone 1 - estimated completion date: 05/31/2023
Milestone 1 - USD value of payout upon completion of deliverables: $0
Deliverable 1.1: Zcash non-KYC Research Report

  • This month is focused on organizing calls with community members, non-KYC infra providers, structuring research documentation, and creating a site (or leveraging a community site) to host the non-KYC user guides

Milestone 2 - estimated completion date: 06/30/2023
Milestone 2 - USD value of payout upon completion of deliverables: $0
Deliverable 2.1: Zcash non-KYC Research Report

  • This month will focus on creating the introduction section to user guides, analyze research calls, present research outline to the community, and begin writing the research documentation

Milestone 3 - estimated completion date: 07/31/2023
Milestone 3 - USD value of payout upon completion of deliverables: $6,000
Deliverable 3.1: Zcash non-KYC Research Report

  • This month is focused on finishing user guides, publishing research, and presenting my findings at Zcon4.

How was the project timeline determined?

The work will be done and delivered from April 17th to August 1st, 2023.

Application submission date: 03/06/2023

Please introduce the team that will be responsible for delivering the grant.

Ian Sagstetter:

  • Current: Member of the Zcash Community Advisory Panel, Advisor at ZecHub
  • Prev: Communications and Community Manager at Electric Coin Company, Founder at ZecHub

Are any members of the team currently members of ZCAP?

Yes, one or more team member on our team is a member of ZCAP.

Please provide the names of all team members that are on ZCAP

Ian Sagstetter

Final thoughts:

Throughout my time in the Zcash community, there hasn’t been as much conversation around acquiring and spending Zcash via non-KYC avenues. This isn’t to say that it doesn’t exist, or that it’s not possible, it’s just not as widely documented as other areas.

I want to focus my next few months on determining what gaps our community currently has, understand what solutions are possible, and present these findings to the community.

I firmly believe that if Zcash does not have sustainable ways to acquire, exchange and spend Zcash, without KYC, then it will not gain adoption at the rate we hope, and it will miss a huge opportunity in giving the world a censorship resistant, private, digital cash.


PS. I am no longer with ECC. If the forum @moderators could reflect that change, it’d be greatly appreciated.

What will be the geographic focus of this project? The practical non-KYC channels which exist will be dependent on the country, and you surely can’t cover the whole world.

One thing I would like to see researched is the EUs TFR regulation, and whether it will require KYC to buy goods and services from businesses with crypto.


:point_up_2: This, 100%.

We need much more focus on using ZEC, less on holding ZEC.


This is important research to protect Zcash users and dig into the risks of these third party exchanges. I’ve generally stayed away from kyc-free exchanges because

  1. who is behind them? what custodial risk is there? if i send them zec and get another coin, is there a greater chance of that other coin having a bad history, since it went through a kyc-free service?
  2. some of the services like ChangeNow are kyc-free until they’re not. I’ve heard stories about users getting funds held hostage because btc had coinjoin in the history. it will often say in the terms kyc-free but they reserve the right to do kyc.
  3. With Zcash, there is less need to acquire coins kyc-free. Bitcoin, for example, has 2 classes of coin - kyc coins and kyc-free coins. But with Zcash, fungibility and safety can be achieved easily and at any point with shielding.

I was thinking on focusing on the EU, US and digital economies. Part of the research would be to speak to regulatory professionals and determine those climates for KYC-free usage.

I agree WRT exchanges, and would imagine that research points to the risks you’ve mentioned. I have avoided non KYC exchanges as well. And you’re right, we need to have those risks analyzed and presented to the community so they’re aware of said risks. (If this is the case)

I will say that purchasing coins is not the only way to acquire ZEC and a big area of focus would be on presenting effective ways to acquire ZEC outside of traditional “I gave random entity fiat for ZEC tokens”. This can give users a potentially safer way to acquire ZEC.

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Why not just join the ZecHub community and do it for their site?

Great question!

While content will originally be a part of my own github repository, ZecHub (or anyone) is free to use my content for the own site. I could submit the user guides to ZecHub’s “Using ZEC” section if the team finds it valuable. cc @ZecHub

The standalone site (for research) is important, in my mind, as the research would be quite long and I like the organization that technical documentation sites have.

Thanks for raising this!

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I don’t think that ZF should finance this project, excuse my bluntness. It doesn’t bring any value to new users and it’s borderline… incitement to tax evasion.

This is a great point. I’m not sure I have seen a comprehensive non-KYC map that someone could use to navigate world wide.

Overall I love the taboo nature of this research will vote in favor from a purely academic standpoint. I think @januszgrze is resourceful and support this bold initiative.

I agree with this. I’m a fan of users either forking ZecHub and submitting PR’s or creating content elsewhere in a format that works for them.


Glad you made these points. I’m sure others feel the same. Will write a response and reference it if this comes up again.

Legal stuff:

I emailed ZF prior to applying to ensure that there was no legal issues with submitting the grant. They confirmed they are good with it should ZCAP choose to fund it.

Re value to new users

Having better infra for KYC-free ZEC gives Zcash a competitive advantage + market opportunities for growth. For example, in the US, Flexa is the most common way to use ZEC IRL. I remember when we did a demo at Crypto In Context and one of the students couldn’t download Flexa because her app store IP was showing a different country. This example showed crypto as an exclusive system in an event where we were showing its potential as an inclusive system.

These examples are really common. So if we want borderless, digital cash to gain more adoption, then we need more stuff that actually enables that.