Request for Input - Funding UA implementation and support for Shielded Address deposits & withdrawals on exchanges

The majority of exchanges that support ZEC trading pairs work with transparent Zcash for deposits and withdrawals with a few exceptions. Exchanges need to make underlying operational changes to support shielded ZEC storage, deposits, and withdrawals. In line with the increased growth of the Orchard shielded pool, the ZCG is open to funding the costs of development hours to exchanges that are willing to incorporate the shielded Zcash deposits and withdrawals.

Some of the exchanges that store ZEC in multi-signature wallets and hardware wallets would need to wait till the FROST design and implementations are completed. The ZCG is open to starting a dialog with exchanges that are interested in implementing privacy-preserving measures and features for their customers. Following the NU5 launch, exchanges can start reviewing support for Unified Addresses and support deposits and withdrawals directly to the Orchard Shielded address. By providing encrypted withdrawals, users take back control of their privacy and reduce information leakage when interacting with exchanges. Shielded ZEC withdrawals give users an added layer of financial privacy within a regulated and compliant framework. Additional educational material needs to be sourced in order to attract exchanges to provide shielded transaction support.

Zcash Community, Please share your views and ideas on the best approaches to get your favorite exchange & service providers to adopt support for Unified Addresses & Shielded ZEC.

11 Likes

I think the only way to make this happen is to threaten withdrawal of Zcash from these major exchanges and I think this would be a good thing… IMO, and this is bad for people who actively manage positions like myself, we should start demanding what we want or take our business elsewhere.

By withdrawal, I mean ECC or ZF enforcing the trademark such that if they do not give us shielded support they are not allowed to trade Zcash/ZEC on their centralized exchange…

People go out of their way to buy privacy and I do not believe this will hurt adoption in the slightest. Just my 2 Zats…

1 Like

My 2 zats as well… I do believe that this approach would hurt Zcash adoption. Ultimatums are generally not known to be the most efficient way of negotiating.

3 Likes

A couple of ideas:

  • Leveraging the Zcash Ambassadors to rally the community on Twitter requesting the targeted exchanges to enable UAs.
  • Offering preferential space on the Zcash website for exchanges that enable UAs.
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Modern custodians are using MPC CMP technology to do crypto custody. It would be worth funding an effort to work with popular custody providers like Coinbase Custody, Anchorage, BitGo, Fireblocks, Zero Hash etc. that support Zcash to add support for shielded pool. I don’t think this requires FROST. I have come to conclusion that FROST is not really a blocker.

Once you have crypto custodian support, it’s trivial development time for exchanges to support shielded pool.

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Currently the top 200 accounts have 8.2 million coins. Some of them are clearly the same entity (#88 to # 90) and (#98 to #104). Only 3 have mined blocks.

Ideally we would want a way to tag the biggest of these addresses (like Etherscan) and get a distribution of split between exchanges and others funds like DCG. Then we can see which entities best to focus on with regards to incentivizing a move to shielded pool. Even a conversion of 30% of these coins, will be a big boost.

1 Like

Viewing key support will need to be streamlined, it certainly doesn’t sound impossible but idk how trivial it would be on the CX developer end.

Being able to walk away from the table, is a powerful tool in negotiation. We are at the point where we should enforce this “card”. IMO the benefits and cashflow from offering zcash are enough to tip the scales here… :slight_smile:

We give a lot of weight for exchanges & assume that they won’t do something unless it makes them money, i can tell you, it’s not accurate. They will do whatever it takes to support an upgrade. Delisting a coin is something they take very seriously, if they do it, market & users feel they are incompetent when it is feasible to do it. That said, we should work closely with exchanges like Gemini with whom we already got good relations to support shielded pool. It is important to signal that transparent pool will be deprecated / not supported in the future with PoS upgrade.

2 Likes