Hi, Zcash community. I’m Emmanuel, former Dash incubator dev and Ethereum CAT contributor. I’m submitting this proposal as a full-stack blockchain developer with over seven years of experience building decentralized applications. I have a passion for censorship-resistant projects and enhancing user experience, for this reason, I’ve contributed to several open-source decentralized projects focused on these principles. I’m putting in this proposal, to build a decentralized platform that allows users to acquire Zcash from peers without relying on a centralized platform. Please feel free to give feedback.
Applicant name: Emmanuel
A one-liner elevator pitch version of your proposal: A decentralized, non-custodial P2P marketplace for purchasing Zcash without KYC requirements and driving user adoption.
Total Request (USD): $17,497
Description of Problem or Opportunity:
In regions like Venezuela, Turkey, Pakistan, Bolivia, India, Amenia, and others where Zcash seeks to grow peer-to-peer (P2P) marketplaces are often the most accessible way to acquire cryptocurrencies. Decentralized P2P exchanges are unique in that they enable direct transactions between users without relying on intermediaries unlike centralized exchanges, which require a third party to manage and control trades. However, the current landscape is dominated by centralized exchanges like Binance and Paxful, which compromise user privacy and security through mandatory KYC (Know Your Customer) procedures and custodial wallet owned by the platform, which means you have to move your funds into their wallet to make a trade. These platforms are also increasingly subject to government restrictions and stringent regulations, making it difficult for users to access their services. A cryptocurrency like Zcash, which respects users’ privacy, faces the constant threat of being delisted for one reason or the other, while customer assets are increasingly frozen or confiscated under allegations of fraud or non-compliance with KYC requirements.
The situation highlights the urgent need for an in-house solution, a decentralized, non-custodial P2P exchange that protects user privacy while providing a reliable way to acquire Zcash without KYC requirements. While Zcash is known for its robust privacy features, it does not yet have its own marketplace for users to acquire it directly without compromising their privacy, in a lot of cases the benefits of Zcash’s privacy features can be undermined when users are required to obtain it through exchanges that enforce strict KYC. The majority of Zcash transactions occur on these centralized platforms, contradicting the core principles of decentralization and privacy. This creates a gap for a decentralized platform that offers a privacy-focused solution, enabling users to transact directly without intermediaries or the risks associated with centralized exchanges.
Proposed Solution: Describe the solution at a high level.
A Decentralized P2P Exchange for Zcash
Accessibility and Adoption
This could introduce Zcash to a new user base, serving as an entry point for those seeking to purchase cryptocurrencies without the need for KYC. Many people in unbanked countries lack government-issued IDs, to perform KYC, which is a significant reason they remain unbanked. This could drive adoption by making it easier for users to acquire and use Zcash directly.
Peer-to-Peer Transactions, Privacy and Autonomy
A peer-to-peer (P2P) marketplace dedicated to Zcash would make it more resistant to censorship, allowing Zcash in a way to own a major means of its distribution and address various challenges by providing a secure, privacy-preserving, and censorship-resistant platform for trading. This setup would mitigate concerns like delisting or asset seizure, ensuring that users retain full control over their transactions. The functionality of on-ramps and off-ramps facilitates the conversion between fiat currencies and digital assets and is vital for bridging traditional finance with Zcash. These mechanisms not only provide essential liquidity but also expand the practical, real-world applications of Zcash, making it easier for users to engage in everyday transactions.
Solution Format: What is the exact form of the final deliverable you’re creating?
A web-based fully integrated P2P marketplace that includes both frontend and backend components, optimized for mobile responsiveness.
Technical Approach: Dive into the how of your project. Describe your approaches, components, workflows, methodology, etc. Bullet points and diagrams are appreciated!
1. Architecture Overview:
Frontend (User Interface):
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Responsive Web Application: Developed using Vue.js.
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Features: User dashboards, offer creation, trade management, transaction history, chat functionality, reputation system, and access to community forums.
Backend (Server-Side Components):
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2-of-3 Multi-Signature Escrow: Transactions are managed by a 2-of-3 multi-signature escrow system, where at least 2 out of 3 designated parties (e.g., buyer, seller, and Zcash Arbitrator) must approve before a transaction is finalized.
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APIs: Developed using Node.js to facilitate interactions between the frontend and backend. These APIs handle data retrieval, transaction processing, user management, and communication features.
Database and Storage:
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MongoDB: For storing application data and user metadata.
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IPFS: For decentralized storage.
Security Mechanisms:
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2-of-3 Multi-Signature Escrow: Ensures secure transactions by requiring approval from at least 2 of the 3 parties before funds are released.
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Encryption: SSL/TLS for secure data transmission and encryption techniques for protecting user data and transactions.
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Bug bounty: For quality assessment
2. Workflow:
User Registration and Setup:
- Users create an account by selecting a username and password
Offer Creation:
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Users list offers for buying or selling Zcash.
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Offer Controls: Users can create, edit, pause/activate, and archive offers. Offers include terms, amounts, and payment methods.
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Offers are stored in DB with essential details securely recorded.
Trade Initiation:
- When two users want to start a transaction, the “Maker” sends Zcash to the 2-of-3 multi-signature escrow address of that trade. Funds are held until the fiat payment is confirmed (made off-chain).
Trade Lifecycle:
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Start trade
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Cancel trade
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Fund escrow
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Mark as FIAT paid
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Release escrow
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Open dispute
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Refund escrow
Trade Completion:
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Users confirm receipt of funds or Zcash.
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Dispute resolution mechanisms are available if issues arise, involving a Zcash Arbitrator for resolving disputes.
Governance and Updates:
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Community votes on platform upgrades and changes via decentralized governance mechanisms.
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Implement updates and new features based on community feedback.
Reputation System:
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Time of Trade Rating: Measures the efficiency of transaction processing.
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User Rating: Users rate each other based on their trading experiences to build trust and discourage bad actors.
Chat Functionality:
- Provides a way for users to communicate and exchange payment-related information securely.
Dispute Resolution System:
- In the case of a disagreement between the parties on a transaction, a dispute will be initiated and an Arbitrator elected by the community will settle the dispute.
Arbitrator Dashboard:
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View open disputes
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Resolve disputes to benefit either the Maker or Taker.
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 for it to be usable?
While the benefits of a decentralized P2P exchange for Zcash are clear, some challenges will be addressed to ensure the platform’s success:
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Regulatory Risks: The decentralized nature of Zcash P2P may attract scrutiny from regulators, particularly in regions with stringent cryptocurrency laws. To mitigate this risk, the platform could adopt a decentralized governance model that distributes control among a global network of participants, reducing the impact of any single regulatory jurisdiction.
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Security Concerns: Decentralized platforms are not immune to security risks. To address this, Zcash P2P will implement continuous security audits, offer bug bounties to incentivize community-driven security initiatives, and foster a culture of transparency and vigilance to identify and resolve vulnerabilities.
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Liquidity and Adoption: Achieving sufficient liquidity and user adoption is a common challenge for new platforms. To overcome this, Zcash P2P will pursue strategic partnerships with existing Zcash communities, decentralized finance (DeFi) projects, and other relevant platforms to bootstrap liquidity and attract a critical mass of users. Additionally, targeted marketing and educational campaigns will be implemented to raise awareness and drive adoption, an idea we have on how to go about this is by inviting users from the classified website to utilize the escrow protection system in acquiring Zcash without the need to perform KYC.
Solution Format: What is the exact form of the final deliverable you’re creating?
Budget and Justification
Total Budget: $17,496
UI/UX, Branding and Logo $1499 (8 days )
Frontend Development: $3,499 (3 weeks)
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Project infrastructure setup
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Design and Implementation: Creation of the static UI for a responsive, user-friendly web application.
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Technologies Used: Vue.js
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Features: User dashboards, offer creation, trade management, transaction history.
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Compensation Explanation: The front-end developers will be paid a flat rate for completing the design and implementation of the static UI. At an average hourly rate of $50 per hour, the total compensation is based on 70 hours of work.
Backend Development: $9,999 (2 months)
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Backend Development: Development and deployment of server-side components.
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Multi-Signature Wallet: Integration and management of a 2-of-3 multi-signature wallet for escrow.
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APIs: Implementation of RESTful APIs for frontend-backend communication.
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Integration: Integration of backend services into the front end.
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Database Integration: Use of MongoDB and IPFS for data storage.
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Compensation Explanation: Backend developers and engineers will be compensated based on their expertise and the complexity of tasks. With an average hourly rate of $75, the total budget covers 120 hours of development, including backend services and integration tasks.
Security and Compliance: $2,499 (1 month)
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Security Audits: Audits of platform and escrow wallet security (Bug bounty).
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Encryption Implementation: SSL/TLS encryption and other security measures.
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Compensation Explanation: Security specialists will be paid for conducting security audits and implementing encryption measures. The budget includes payments for audits and a bug bounty program. At an average rate of $100 -$500 depending on complexity.
Cloud and infrastructure
Mid-Range VPS Cost Estimates
*** Typical Specs:**
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RAM: 4-8 GB
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CPUs: 2-4
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Storage: 50-100 GB SSD
Monthly Cost:
- Average Cost per VPS: $30 to $50
*** We need two environments one for testing and another for production**
Summary
Monthly Cost for 2 Mid-Range VPS Instances: $60 to $100
Annual Cost for 2 Mid-Range VPS Instances: $720 to $1,200
which averages to about $999 for one year.
How was the project timeline determined?
The project timeline was determined through analysis of the project scope, complexity, and the tasks required to complete each major component. Here’s how the timeline was established:
Breakdown of Major Tasks and Components
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Frontend Development: Estimating the time needed to convert design mockups into a static frontend, ensuring responsive design, and conducting initial testing.
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Backend Development: Assessing the effort required to develop server-side components, integrate the multi-signature wallet, create APIs, and set up the database.
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Security and Compliance: Allocating time for security audits, implementing encryption, and ensuring the platform meets necessary security standards.
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Integration and Testing: Estimating the time needed to integrate frontend and backend components, perform comprehensive testing, and resolve any issues.
Conclusion
A decentralized P2P platform for Zcash could significantly drive its adoption and enhance its resistance to censorship. By emphasizing ease of accessibility, decentralization, and a positive user experience, this platform would provide a robust solution for individuals seeking a more secure and easily obtainable cryptocurrency. This approach aligns with Zcash’s core principles of privacy and autonomy, broadening its appeal to a wider audience.