Private Data Market

Hello everyone,

We have a brand new grant proposal. Feedback is highly appreciated.


Private Data Exchange

Applicant name:


Team member names:


Dr X

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

We build a privacy preserving market place for transaction data with full control of individual data and fair distribution of gains.

Total Request (USD):

$350000.00 USD

Have you previously received a grant from Zcash Community Grants (formerly called ZOMG) or ZF?


Are you seeking or have you received funding from other sources for this proposed project?


Applicant background:

We are team of three economists and computer scientists with academic backgrounds who work in faculty positions at different universities. One of us works in Applied Microeconomics, Business Economics, Digital Economy, Industrial Organization and has published extensively on these topics in leading academic journals in economics and marketing. He holds editorial positions at several journals. His responsibilities in the project are:

– economics and econometrics modelling.

– data analysis.

One of us works on mechanism design and voting questions, often with applications to decentralized systems such as blockchains. He is a lead researcher for a web 3 company and regular participant of programming competitions, such as Google Hashcode, where he participated in several finals and obtained a 3rd prize. His responsibilities in the project are:

– technical architecture of the system.

– supervision of software developers.

One of works on market design and related questions and has published his research in various economics and computer science outlets. His responsibilities in the project are

– market design, seller and buyer reputation design, pricing

Description of Problem or Opportunity:

A centralized market is a market in which all buyers and sellers meet on a common platform and trade is facilitated by a market organizer. There are certain advantages of centralized marketplaces: they help consumers to save search costs (time and money) when searching for desirable goods and they facilitate the listing of products by sellers. In the past, typical “centralized” marketplaces were supermarkets and store chains. The shift to online retail markets organized by platform providers such as Amazon, eBay, Taobao, etc., has dramatically changed the retail landscape by allowing for lower search costs for buyers and unlimited listing capacity for sellers. However, such centralized marketplaces suffer from several inefficiencies: First, the market organizer can exert market power through its exclusive access to trading information generated on its platform. Second, trading such information puts either buyers or sellers at a disadvantaged position. Third, and most importantly, the platform can replace sellers once it has learned about the demand side and as a consequence completely capture the market by its own.

Amazon is a typical example of a platform that takes advantage of using both consumers’ and sellers’ information. On the demand side, Amazon collects data from users when they navigate their website, such as the time spent browsing each page, as well as detailed information on consumer purchases. Furthermore, Amazon monitors what consumers look at, uses their shipping address (e.g., Amazon can take a surprisingly good guess at a consumer’s income level based on where the consumer lives), and information derived from reviews and feedback in case the user provides it. Amazon’s recommendation technology is based on collaborative filtering, which means that Amazon decides on what it thinks a consumer wants by creating a profile of the consumer, then offering the consumer products that people with similar profiles have purchased. On the supply side, Amazon uses sellers’ information to find and replace popular products and manage the prices of the products, i.e., offering discounts on similar best selling items, to attract more customers and to eventually increase the net profit.

To mitigate this problems, several solutions have been developed recently, in light of development of decentralized applications as blockchains. Examples of privacy preserving transaction systems are ZCash, Tornado Cash, Panther Protocol, etc. Examples of data marketplaces are Ocean Protocol, DataPace, etc.

Proposed Solution: Describe the solution at a high level.

We propose to create a market place for buyers and sellers. After connecting buyers and sellers they continue their business on any (messaging) platform they wish, where they can agree on the terms of trade. Our platform has no control on price negotiation and other agreements between the buyer and the seller. In case that an agreement is reached, the buyer and the seller issue an encrypted transaction on a blockchain that provides privacy preserving transactions. A transaction includes information about the trade, and can be de-crypted either by the seller or by the buyer. Our platform only knows that a certain seller and a buyer have agreed on a trade, but does not know the terms of trade. Everyone monitoring the blockchain can obtain the same information as the platform and it therefore has no privileged access to information.

Examples of decentralized exchange markets that can benefit from a platform such as ours are markets for digital goods and file exchange systems. These systems have been studied from a technological, and a game theoretical point of view, see Dziembowski et al. (2018). The authors propose that such markets can be organized without trusted third parties, using escrow mechanisms.


Stefan Dziembowski, Lisa Eckey and Sebastian Faust, FairSwap: How To Fairly Exchange Digital Goods, Proceedings of the 2018 ACM SIGSAC Conference on Computer and Communications Security, CCS 2018, Toronto, ON, Canada, October 15-19, 2018, pp. 967–984, ACM, 2018

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

The solution format is a website and an application to be installed on different types of devices. Through the website and application, sellers and buyers meet and make transactions in both product and data markets.

Technical Approach: Dive into the how of your project. Describe your approaches, components, workflows, methodology, etc. Bullet points and diagrams are appreciated!

• Website: Javascript (frameworks: viewjs, react), CSS, PHP (e.g., for admin panel) and other front-end programming languages/frameworks.

• Maintaining publicly available database, similar to e.g. Etherscan, using open source databases, e.g., MongoDB.

• Web-services (JSON, XINS) and web protocols (TCP/IP, https).

• Reading and recording from the blockchain, using custom made API, built with REST API.

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?

Besides the above listed systems, two additional dependencies are required:

• The ZCash privacy preserving transaction system, in which only transaction owners can disclose transaction information.

• A private-public key encryption system, in particular, for aggregating information on multiple transactions (e.g., all transactions of one user in some time interval).

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?

• Speed of the system: scalability. With more users, the speed of the whole system may slow down (even) more than proportionally. Our goal is to keep the speed close to constant, which is usually achieved by parallelization of processes.

• Privacy and security of the users’ metadata and users’ credentials. If the system grows and achieves a certain level of success, outside attacks will become more likely.

• Website security: the same problem as before, but attacks can be directed to the functioning of the website.

Unintended Consequences: What are the negative ramifications if your project is successful? Consider usability, stability, privacy, integrity, availability, decentralization, interoperability, maintainability, technical debt, requisite education, etc.

The system, if successful, can disrupt the current centralized system. Therefore, it can become a target of attacks

• technological: hack of the website, creation of decoy buyers/sellers,

• economical: competition by cheaper alternatives,

• legal compliance,

from centralized marketplaces that own their users’ data, e.g., Amazon.

Evaluation plan: What metrics for success will you share with the community once you’re done? In addition to quantitative metrics, what qualitative metrics will you commit to report?

During the project execution, we provide github link containing all repositories, that will give a quantitative measure of how much work is done. We provide user experience feedback as a qualitative measure.

Hardware/Software total budget:

$0.00 USD

Please provide justification for the total hardware/software budget:

No justification needed.

Services total budget (cloud, hosting, etc.):

$50000.00 USD

Please provide justification for the total services budget:

Admin Costs, transportation, and other operation costs $5K per month.

Compensation total budget:

$300000.00 USD

Please provide justification for the total compensation budget:

2 Software Engineers (0-2 year experiences) $60 - 70K per year per person $120 - 140K

1 Software Engineer (4-6 year experiences) $100 - 120K per year per person $100 - 120K

Interface Designer (0-2 year experiences) $50 - 60K per year per person $50 - 60K

Do you require startup funding?


Milestone 1 - estimated completion date:


Milestone 1 - USD value of payout upon completion of deliverables:


Deliverable 1.1

Market platform design and algorithm

Deliverable 1.2

Demo version of the website

Total proposed USD value of grant:

$350000.00 USD

How was the project timeline determined?

Based on past experience with research and product designs.

Application submission date:


I have a few questions here. After reading over this several times, I’m still a bit confused over what exactly this proposal is intended to actually do - and I’m coming away with a sense that this might be a method to decrease information inefficiencies at the expense of privacy.

Does that mean that the details of who is transacting with who and for what becomes publicly available information? Sounds like the only thing being obscured or kept private here is the price and the settlement method.

Is this blockchain agnostic, or does Zcash play some kind of special role here? Do you see this promoting Zcash adoption in some specific way?

Is it a marketplace for users to sell their own data to interested parties? I’m not really seeing that in the more detailed description, but to me, that is what the grant proposal implies.

Can you give some examples of hypothetical use cases?


This is just an alternative method for data brokers and companies who collect and utilize data to meet and transact. Why should we support that at all?




yes, only price and quantity are kept private.

information about transactions can be written on any Blockchain, i.e., in this it is Blockchain agnostic, but the real transactions should be done over Zcash, so that the proof about transaction specific details can be shared to the data buyer. This promotes Zcash adoption.


literary any market can be organized like this, but we would probably start with file exchange or other digital goods as indicated in the proposal.

as already answered to the previous question, the real transactions should be done over Zcash, so that the proof about transaction specific details can be shared to the data buyer. This promotes Zcash adoption.

Well why dont we just organize and hack a bunch of peoples’ private stuff and sell it and then we can all be like “Zcash fixes this!” or some other shit to gain adoption? Because this is not what we’re doing here and this zebra, at least, has principles. If you want to protect your own privacy while peddling off that data which belongs to other people then do it on your own.

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Our proposal is pretty much the opposite of what you wrote. Users of our system have a choice to sell their own data. That is, users are in full control of their data, and only they are able to use/sell it.

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Hi @Private We have begun discussions about the proposal within the @ZcashGrants group. I think I understand the concept of a self managed data market. I have a few questions around this proposal.

  1. Am I correct in understanding you are making a marketplace where zcash users will be able to sell access to their sheilded transaction history to buyers?

  2. Are buyers, sellers, or both pseudonymous to each other; and will the information around the sale be complete private from the rest of the world?

  3. Are viewing keys or payment disclosures used to provide tx history to a successful buyer?

  4. Your budget is 350k, 50k for infra, 100k on first milestone. You said you dont need startup funds. When do you need the other 200k?


Thank you for your consideration and questions:

Yes, that is correct. We don’t mean full transaction history, though. More details in the following answers.

They can be pseudonymous, or they can choose to share some details. The information about price and quantity (and therefore final payment size) is completely private. However, the traders may want to disclose what they’re selling, to target specific data buyers.

Payment disclosure is exactly what data seller need to share. If there are too many transactions and they do not want to share payment disclosures one by one, they may opt for selling viewing keys.

The rest 200K are for Milestone 2 and Milestone 3. Full amount (300K) is to compensate engineers implementing the system. We can send full detailed budget if requested.

@Private, after consideration from @ZcashGrants, and taking into account the lack of support and interest from the community on the forum for this grant, the committee has decided to reject this proposal.

Thank you for your grant submission and I hope you stay an active member of the Zcash community going forward both here on the forum and the below avenues as well.

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