It appears that for the first time in its history Zcash (or maybe Zashi) may have found Product-market fit (PMF). The resulting price action enables our community to allocate significant additional resources. I believe we would be wise to focus our resources on reinforcing this newfound PMF.
We offer what nobody else in Web3 does: a usable, permissionless bank account.
A bank account that exposes your entire financial history to your coffee shop is not usable. A bank account where your stablecoin balance can be frozen is not permissionless. A bank account that can only be used with other customers of that same bank is not a usable. No one else has our anonymity set, which is measured in the millions. Nobody else in the privacy space has our ecosystem integration, with support NEAR intents, Brave, a shielded hardware wallet and too many others to mention.
We should reinforce the Zashi experience and develop for massive scale and broad ecosystem integration. We should also use the breathing room afforded by the favorable policy landscape and additional resources, to make our network as resilient as possible. Just as the winds have turned before, they may well turn again.
However, I think we should be cautious not to go too broad, too fast and lose our PMF. I know that some of the proposals on this forum, like a 'Starknetâstyle L2â and ZSAs are well-intentioned and interesting from a technical perspective. In my opinion, however, they stray too far from what is just starting to make us successful. The future is not the Zcash-everything-chain with private smart contracts, private stablecoins, private ENS and a private trading platform. That is not what we see in the non-private Web3 space either: Ethereum just is not simultaneously taking moneyness from Bitcoin and meme coins from Solana; to the great dismay of its supporters.
The future is us improving what our real users already use our network for today. We should integrate with all the aforementioned projects as they arrive (and in the meantime, their non-private precursors). At least that is my opinion and I think it should be discussed so that we donât waste development resources.
I understand @joshs most recent tweet to be in the same spirit. This reinforces my belief that an open discussion about the fundamental direction of Zcash is warranted. We should come to a joint decision on whether we want to become a private Ethereum or reinforce our apparent PMF as a SoV like Bitcoin. And once we decide, we can come together and really push forward in whichever direction is chosen.
(Note: I just finished reading âHijacking Bitcoinâ and itâs cautionary tale of ossification and entrenchment, if you havenât read it yet you need to!)
A few thoughts:
It seems that positive market movements tend reinforce the idea that âwhat we are doing is working, so donât change anythingâ.
Zcash is finally, after years downtrend, hitting a mainstream wave of Privacy and Quantum awareness, so naturally we are reluctant to risk breaking that stride.
So where can we improve Zcash to keep the momentum?
It seems that for a few years now there has been broad support for ZSAs, primarily with the thought that they will add utility and use cases for Zcash. I also think support for Crosslink (ways to stake and earn with ZEC) has been supported in a similar vein: adding more use cases for Zcash.
Moving forward we need to ask ourselves: has the underlying motivation behind adding these to Zcash been to build better machinery for peopleâs lives and freedom? Or has it been to add utility to ZEC with the hopes that number go up?
Personally I donât think that they are mutually exclusive, you can build things to make peoples lives better while also enjoying the recognition of that labor.
So how do we strike the balance of not stagnating at the base layer (1MB blocks is enough for a SOV! ala BTC), but also explore the other opportunities for Zcash to grow?
Do we take the BTC maxi approach where Zcash keeps it simple at the base and builds utility as second layer solutions? (BOLT network anyone?)
Or can we continuously grow and adapt the base layer code for these additional use cases? With our recent market improvements we certainly have more resources to attract and hire talent to our teams than we had a few months ago.
Iâm not buying or selling either approach, but I do think we need to have an open dialogue about it. I donât want Zcash to fracture like BTC did.
True. And not just throw some âtrust me bro itâs going to be so awesomeâ. Iâm open to everything but just present some real use cases.
ZSAs: completely useless (but again please prove me wrong with concrete examples).
Starknet: I didnât really understand anything but I admit I didnât put too many efforts into it either (donât care much about L2s).
Crosslink: not a big fan of POS but I donât trust standalone POW either. Its probalistic finality is not enough in my opinion so something has to be done. Rollbacks are a real threat.
For example, like Bitcoin, our security budget is exponentially decreasing. This may not be sustainable in the coming decades. ZSAs may bring in fees to mitigate, or in the best case, solve this problem (although there are more immediate steps available).
I donât know enough about consensus to comment on Crosslink.
I have the exact opposite view. The future is private programmability, but not on the main chain, but on a FHE-enabled L2. Zcashers recognize that we need privacy when we transact, and that need doesnât disappear when we want to do slightly more complex transactions that require on-chain computation.
Edit:
I will add that I afaik we are still a few cryptographic breakthroughs away from having the technology to create a good FHE-based L2, so in the mean time I think we should just get the ZSAs over the finish line and put private programmability on pause until someone else has figured out how to efficiently create ZK proofs for FHE computations.
Hi! Yeah I saw that tweet from @joshs and it surprised me too! But itâs good, itâs an important conversation.
Personally I want to see the vision of Satoshi happen. Itâs simple, itâs: electronic, private, cash. Ultimately Iâll back whatever is going to be best for that long term vision. Anything else is noise.
PoW or PoW+PoS (Crosslink)? Whichever solves the long term security problem.
ZSAs? As long as it does not impede the network in any way whatsoever. It would take just one negative impact for me to want to drop it.
But if thatâs the future, donât projects like Aztec have a huge head start? It will be much harder to compete with Ethereum because itâs a moving target.
Thatâs why NSM is important to fix the security budget.
Aztec isnât actively working on FHE and their programmability is either off-chain or transparent. There are 3 kinds of private programmability: Off-chain, Trusted hardware (SGX) and FHE. I donât really consider the off-chain model private because you deliberately reveal transaction amounts to some off-chain entity. That leaves trusted hardware and FHE which both can perform the computations on-chain and can therefore be called âprivate smart contractsâ. I think it will take centuries to develop trusted hardware that can resist nation state attacks, and itâs not really the expertise of anyone involved in Zcash anyway. That leaves just FHE, and the leading teams working on private smart contracts with FHE are Zama, Fhenix and Sunscreen. All of these are much less known and established than both Aztec and Zcash.
If we ignore that these FHE protocols are much less established, the bigger issue is still that none of these are hardcore privacy protocols like Zcash.
They donât want to have encrypted sender and receiver addresses, just encrypted transactions amounts (Zama and Fhenix at least, not really sure about Sunscreen to be fair). This is because they are targeting big institutions and are therefore focusing on being compliant up the wazoo.
They aim to be private L2s to a transparent L1 (No way FHE will be implemented on L1 Ethereum or Solana). This is dangerous because the private L2 can be thrown under the bus by people on the transparent L1 who care more about their bags than they do about privacy as a human right. We saw this on Ethereum when validators began censoring Tornado Cash transactions due to OFAC sanctions. 70% of Ethereum validators were willing to censor Tornado Cash at one point. Privacy must be on the L1, because our risks and values are not aligned with transparent L1s who prioritize speed and institutional approval. I also suspect that the FHE L2s I have mentioned will prioritize speed over decentralization. An FHE L2 on Zcash would hopefully go for prioritizing both privacy and decentralization, even at the cost of speed, and we would be differentiated in that way.
This is really impressive work, the product looks clean and solves a long-standing pain point for privacy-minded users.
At Zswitch, weâre building something aligned with the same philosophy: enabling privacy-preserving cross-chain value transfers without exposing user data or relying on centralized intermediaries. Our focus is on creating a seamless bridge where users can move value between ecosystems while maintaining strong privacy guarantees and minimizing metadata leakage.
Great job to the team, also would be good to connect!
