Privacy-Preserving Perpetual Trading on Zcash

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I’m exploring an idea for a privacy-focused decentralized perpetual trading platform built around the Zcash ecosystem.
The main idea is to combine:

  • Zcash shielded assets and private notes
  • Zero-knowledge proofs
  • Private positions and collateral
  • Leveraged perpetual trading
  • On-chain/verifiable settlement
  • Multisig for governance and emergency controls

The goal is to make trading activity private while keeping the protocol itself verifiable and trust-minimized.

I’m currently exploring the best technical architecture and would love feedback from people experienced with Zcash, ZK, and DeFi.

What do you think would be the biggest technical challenge with this approach?

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Honestly, you will have to implement a Layer-2 approach, such as with Stacks/cbBTC using a DAO or something. Shielded Zcash is incredibly limited; the number of supported transaction circuits is in the single digits.

Seriously, though. It doesn’t support Schnorr signing, it doesn’t support timelocks. It’s fundamentally just a commit-reveal (nullifier-based) system, a glorified Tornado Cash.

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This overlaps with something we’ve been building (Ballast: funds a Hyperliquid account from shielded ZEC or Monero, trades behind a single-use identity, cashes back out to privacy). A quick note from that experience.

The hard part usually isn’t the ZK layer, it’s liquidations. If collateral and position size are both private, a liquidator can’t easily tell a position is underwater without either an expensive proof generated under time pressure, or a trusted keeper set that can see into positions, which quietly reintroduces the thing you were avoiding.

We sidestepped that by not building the venue. Ballast uses Hyperliquid’s existing matching and liquidation engine and keeps privacy on the funding side only: coins move from a shielded wallet through a bridge into a fresh, single-use identity, trade, then cash back out to privacy. The position itself isn’t private on-chain, what’s private is that nothing ties it back to you. Real tradeoff of course (trusting Hyperliquid plus hyperunit’s bridge), but it ships today.

Worth stress-testing your “multisig for emergency controls” line early.

Happy to compare notes if useful. hyperballast.xyz/docs.html has the rail writeup if it’s a helpful reference point.

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