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.


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.


Hey everyone, providing an update on this grant!

I’ve structured my research into six different categories, with peer-to-peer exchanges and atomic swaps receiving the most attention so far.

I’ve reached out to a few members in the Zcash community to discuss some nuance around these items, and will likely schedule those meetings in the near future. I’ve found that most of the information is already present, and just needs to be aggregated and repurposed for a Zcash specific use case. The two areas where I do have questions, however, remain around regulatory climates and chain analysis identifying non-kyc users when they interact with transparent-only protocols and assets (which appears to be necessary in most instances).

For the research paper, I’ll simply host it on my Github account. I’ll host user guides on ZecHub. I’ll work with some community members on creating censorship-resistant copies.

I’ll spend the next week continuing initial research around peer-to-peer market places, atomic swaps, and non-kyc exchanges, and then I will write out drafts for those sections. I then plan on exploring other areas which include earning Zcash, mining, and peer-to-peer donations.

Thank you!


Nothing personal to you @januszgrze, but if this gets funded it further instills what a professor coin Zcash is…

I predict that the information will be quickly outdated and have a small target audience. Plus, it should be something that @joshs writes up in a blog post.

I get your perspective. But to be fair, I wrote a few blog posts at ECC, and was a part of the editing process for most (including the PoS research one which was pretty extensive), and this will take substantially more time.

I’ve reconsidered framing as well to address information being outdated in x amount of time.

Feedback about exchanging ZEC shielded to USDC (polygon).

Service: https://sideshift.ai/
Exchange Pair: ZEC / USDC (polygon).
Receives ZEC shielded: YES
Spread: 0.00$
Value in ZEC exchanged: 0.5
Time: 1+ confirmation.
Usability: Very easy
Amount correctly received in the Polygon wallet (1inch): YES


Sideshift is a great tool. Can be used to keep zcash as your private store of value and you can trade into whatever currency you need for spending.

I sometimes hold my spending cash in Zcash, and then swap into lightning when I need to buy stuff. I feel like the privacy you get from that is quite decent.

A fear I have with sideshift is that they deslisted Monero, so there’s a massive risk there. Having ZEC available on on-chain applications to do these types of trades is the goal imo.

1 Like

Hey everyone. Providing an update here (overdue). I’m going to cover a quick status update, my intended next steps and provide some context on delays.


The report for this is actually drafted. It was finished roughly 6 weeks ago. As some mentioned, for the current state of non-KYC Zcash, a simple blog post would’ve sufficed. ZecHub currently has a great piece on it. But, what is probably more interesting, is an ability to leverage blockchain communication / interoperability protocols (like IBC) to move newly-issued ZEC to other blockchains and leverage on-chain, decentralized governance protocols to distribute issuance. I think it ties nicely with ECC’s Proof-of-Stake research. People in the community are aware of this, but nothing has been formally covered in this area.

So, the report has transformed much more into a “let’s move to proof-of-stake and research better interoperability to create non-KYC grants programs” versus non-KYC specifically. In my opinion, more decentralized issuance of ZEC, that isn’t done by a single company, can enable non-KYC acquisition opportunities for devs and community members.

Next steps

I’m going to schedule a meeting with the Zcash Foundation to prioritize getting this paper released in the next three weeks. With regards to payment, I will have an open discussion with them to see if the original requested amount is justified relative to the work produced, and if the delay has any effect on that (don’t worry, I’m not going to ask for more). I want to make sure that any money I earn from this is representative of the quality / effort put into the paper. In a scenario that I am unable to be paid for this, I will still publish the paper as planned.

I will also reach out to Zcash Foundation board members, Electric Coin Company researchers, and community members to schedule meetings to discuss the report further. (You probably know who you are. Check dms haha)

I will also publish the report, in a drafted state, to HackMD. I am doing this to ensure review, critiques and potential edits are done in the open. If the paper sucks, tear it apart! I will further edit the paper based on feedback that I get. This open-review period will likely take 2-3 weeks.

I’ll also work with @ZecHub on a comms sprint around it.


Quite a bit has happened since the last update here. Some of which I can’t share. I guess the short version is that I ended up getting back into full-time work, which I didn’t expect, and some life stuff happened.

I have a lot of love for Zcash, and I hope some of the volunteer work I’ve done has shown that. This year, I built the ZecHub team, guided it through its ZCG grant process, passed off the project to the core team + community, helped it through legal processes and hosted + produced a podcast series, called Zcon Sessions, in collaboration with ZecHub and @ZcashFoundation’s AV Club.

I’ve done a lot of reflection on how I can help Zcash. Candidly, I was a bit discouraged after leaving ECC and passing ZecHub on to the community. I probably needed a bit a space from the project. Now, I think the best thing for me to do is get this over the line independent of its status as a grant, and then spend some of my time volunteering for community initiatives again.

Thanks for reading. Excited to wrap this up and share it with you all.


Hey everyone - I’m going to post the final draft this week. I’m not going to request the 6k in payment due to delays in getting this done. I’ll work with ZecHub on some comms for this.

Sorry for the delay on this.