(Updated) Arculus Cold Storage Wallet Zcash Shielded Transaction Support

Title:

(Updated) Arculus Cold Storage Wallet Zcash Shielded Transaction Support

Applicant name:

Jonah - Arculus

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

Arculus seeks to add Orchard Shielded Transactions for Zcash into our cold storage wallet ecosystem, and create an evergreen fund for Zcash.

Total Request (USD):

$225,000.00 USD

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

No

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

No

Applicant background:

I (Jonah) am a Technical Project Manager and Partnerships Lead at Arculus. Arculus is an evolved cold storage wallet experience, and is made up of a small team of engineers that have successfully implemented a multitude of chains and their holistic functionality into our wallet system.

Description of Problem or Opportunity:

The opportunity is expanding shielded support (Orchard) into Arculus’ hardware wallet solution and manufacturing a Zcash edition hardware wallet to create an evergreen fund for Zcash, to result in a net positive on the treasury.

Combining this development with a Co-Branded Zcash edition hardware wallet is an opportunity to create industry buzz, increase transactional hardware wallet use with Zcash, and most importantly make this entire project a net positive on the treasury.

Proposed Solution: Describe the solution at a high level.

Our proposal is divided into two portions: Development and Hardware.

The development portion of our project will expand Shielded support onto our hardware wallet solution, offloading Synchronization and Orchard ZKP onto the mobile. Details of this are listed in the milestones section.

The Hardware portion of our project is outlined below ↓

We understand that the treasury is not at it’s strongest currently. With that in mind we have created financial model to make this project an overall net positive on the treasury’s funds, while still providing Arculus with the necessary grant funds to perform the development portion of the project. This project, at it’s finality, is an effective negative $70,000 ask on the foundation, with an evergreen fund set up to fund the foundation well into the future. We are seeking a real, truly mutually beneficial relationship between Arculus and Zcash.

Since we are providing a wholesale price of $70 per unit to Zcash, and selling to consumers for $129.99 per unit at presale, we will remit $295,000 to the foundation post presale. Initial grant ask is $225,000 for development, therefore the grant is an effective negative $70,000 ask.

We will accomplish this by manufacturing a co-branded or white-labeled Zcash edition Arculus hardware wallet. Cost will be $129.99 for the hardware wallet with Shielded txn capability.

The hardware portion of this project’s dependencies: Development and Testing complete for Orchard Shielded transactional capability on our hardware wallet.

Step 1: Design and Presale.

Agree on design. Arculus will host the presale site and handle all B2C interaction including logistics and flow of funds. A minimum 5,000 cards for presale will be required to begin manufacturing.

Step 2: Manufacturing, shipping, permanent listing, and affiliate code

We will perform presale logistics, list the zcash edition card as an item we sell indefinitely, and provide Zcash an affiliate code which will benefit $20 of every zcash edition card sale to the foundation moving forward.

Step 3: Payout Remission

We will payout the remission of $295,000.

Step 4: Evergreen fund

We list the item and provide an affiliate code for Zcash’s use. $20 per card to be paid to the foundation on an agreed time schedule.

Financial Table ↓


Technical Hardware Details ↓

It will be required to update our firmware for this project. Due to the nature of our wallet, we cannot perform in-field firmware upgrades, so we will need to create a new version of the firmware specifically to handle the math for Zcash orchard transactions and load it onto a new set of cards. This is actually an opportunity rather than a setback; because Arculus controls every aspect of our hardware wallet, from manufacturing to releases.

In prose; to fund this proposal and net your treasury funds at the end, we propose to manufacture a Zcash edition Arculus card loaded with the updated firmware to handle Orchard transactions and full Zcash support, providing these cards to Zcash at a wholesale rate, beginning with a 5,000 card preorder. Arculus handles all logistics, and future cards benefit $20 to the foundation treasury; an evergreen fund.

Pre-Sale Supply Proposed: 5,000

Total Development Budget: $225,000

Total Grant Request: $225,000


This would allow for full integration of Orchard transactions into our ecosystem, card design sessions, a new firmware specifically for Zcash edition card users, and a 5,000 Zcash edition card pre-order.

With ~759,000 Zcash addresses, we would need to sell to 0.6% of them for the 5,000 pre-sale.

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

Subject of this grant is Arculus full support for Zcash Orchard (ZIP-224) shielded transactions and Zcash support holistically for store, send, receive, and volume packaging for a Zcash Branded Hardware Wallet.

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

The component of the Arculus key card’s firmware that relates to Zcash will be extended to fully support Zcash Orchard shielded transactions onto a new card loaded with this updated firmware.

Our developers will integrate backend, front end, UI changes, and node efforts to have a successful shielded user experience for ZCash, offloading to the mobile what the computational and memory capability the card cannot handle.

For a technically detailed look at steps for integration, please see milestones.

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?

Our holistic workflow is entirely internal.

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?

We don’t expect any hardships in this process. It’s possible, during testing, that unknown factors come up, and as usual we will iron out any bugs and release to the public a fully functional update providing Zcash and shielded transaction capability combining our app and the Zcash edition Arculus card.

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.

No foreseeable negative consequences.

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?

We offer an active communication channel via Slack to ensure smooth collaboration throughout the project.

Hardware/Software total budget:

$0.00 USD

Please provide justification for the total hardware/software budget:

N/A

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

$0.00 USD

Please provide justification for the total services budget:

N/A

Compensation total budget:

$225000.00 USD

Please provide justification for the total compensation budget:

Considering the duration, complexity, and value of the project, we have devised a proposed framework with a rate of $19,011.8 USD per month of work. As the project spans 12 months, the total cost amounts to $228,141.6 USD.

For payment distribution and timeline details, please refer to the milestones outlined below.

Do you require startup funding?

No

Milestone 1 - estimated completion date:

01/26/2024

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

$18240.00

Deliverable 1.1

Basic project structure • Pallas curve and other primitives implementation • Unit tests of these primitives.

Milestone 2 - estimated completion date:

03/29/2024

Milestone 2 - USD value of payout upon completion of deliverables:

$34200.00

Deliverable 2.1

Adding Zcash to mobile environment (shielded and unshielded txns) • ZIP32 Orchard shielded addresses generation • Unified addresses (transparent + Orchard) • Viewing a unified address on display • Incorporate encryption and decryption operations for Orchard notes with outgoing viewing keys. • Generate proof for Action statements in Orchard transactions. • Build & test structure for offloading heavy operations to mobile

Milestone 3 - USD value of payout upon completion of deliverables:

$49229.76

Milestone 3 - estimated completion date:

05/24/2024

Deliverable 3.1

Add Orchard (Shielded) key generation to the Arculus Key Card hardware. Incorporate necessary cryptographic functions: PRFexpand, PRFockOrchard, and PRPd. Implement the Orchard-specific key derivation function for deriving internal keys. Include the key agreement scheme for secure key exchange. Implement the commitments scheme for generating commitments. Integrate the DiversifyHashOrchard function for diversifying payment addresses. Implement the signature scheme for creating spend authorization signatures. Utilize conversion functions for proper byte sequence conversions. Ensure randomness and uniformity in key generation and utilization based on specified algorithms and constraints outlined in the Zcash Protocol Specification. Add Orchard (Shielded) signing capability to the Arculus Key Card in combination with offloading heavier functions onto the mobile.

Milestone 4 - USD value of payout upon completion of deliverables:

$104538.80

Milestone 4 - estimated completion date:

07/26/2024

Deliverable 4.1

Implement Orchard spending key and derived key generation. Include KAOrchard for secure key exchange. Implement diversified address generation with DiversifyHashOrchard. Support value commitment and note commitment operations. Enable creation of spend authorization signatures for Orchard notes. Implement balance and binding signature scheme for note value verification. Incorporate encryption and decryption operations for Orchard notes with outgoing viewing keys. Generate proof for Action statements in Orchard transactions.

Milestone 5 - estimated completion date:

10/25/2024

Milestone 5 - USD value of payout upon completion of deliverables:

$18791.44

Deliverable 5.1

Write project report • Prepare and coordinate submission • Review and release to public

Total proposed USD value of grant:

$225,000.00 USD

How was the project timeline determined?

Based on our current lineup of features and updates planned, we have allocated this timeline as our best estimate of when this project would be completed, given the complexity.

Application submission date:

12/03/2023

4 Likes

Hi @JonahatArculus - Thank you for submitting your updated grant proposal! We will review it in the upcoming weeks and reach out if we have any questions.

In the meantime, if you have any questions for us, you can post them to this thread or DM us at @ZcashGrants.

Zcash Community - We want to hear your feedback on this grant! You can post your comments to this thread or DM us at @ZcashGrants if you’d like to provide feedback in private.

Thanks!

1 Like

I’m a bit confused… Is the grant for 490 k or less because of the presale?
Or are you saying that ZCG fronts 490k but then gets the profits from the presale?

Thanks
–h

1 Like

No offense, but I’ve never heard of this wallet until just now:

This is a lot of money for a rather unknown contender in the cold storage space, when we’ve already fumbled with Ledger and Trezor.

However, the former, while being resurrected from the boneyard, will not include Orchard support, so that part of this grant is compelling.

Curious to learn more.

No. I vote for less spendings towards proprietary wallets and more spending towards Android hardened wallets.

Hey Hanh, it’s been updated.

The Grant is for 225k. We will remit back to the foundation $70 per unit, which for the presale at 5000 cards is 295K, making this grant an effective negative $70,000 ask, while also producing a shielded txn capable hardware wallet.

Hi Jelly.

While the upfront grant is for 225k. We will remit back to the foundation $70 per unit, which for the presale at 5000 cards is 295K, making this grant an effective negative $70,000 ask, while also producing a shielded txn capable hardware wallet.

The main draw is the lack of risk on the treasury’s end, as not only is this grant an effective -$70,000 ask, but we also set up an evergreen fund to give the treasury $20 for each future card sold with the shielded txn capability.

We do this by remitting $70 per unit back to the treasury post presale. At 5,000 units, that’s 295k. Our grant ask is 225k.

What if the presale doesn’t sell enough units?

4 Likes

@JonahatArculus Thank you for your submission. After consideration from @ZcashGrants and sufficient time for the community to provide feedback on the forum, the committee has decided to reject this proposal as it is not a priority right now.

The committee appreciates your grant submission efforts and encourages you to continue as an active member of the Zcash community going forward, both here on the forum and in the below avenues as well:

1 Like

Hey Hanh, in this case, we would still move forward, as that would be a risk for both parties.