ECC is committed to supporting Zcash-Shielded Assets by aligning our engineering plans with the community in the best interest of the mission and ZEC users.
For some time, ECC has been considering the possibility of implementing Zcash UDAs (“User-Defined Assets”) to allow the creation of Zcash-“wrapped” tokens.
Instead of the term “UDA,” we advocate for the term “Zcash-Shielded Assets,” or “ZSAs,” for better clarity. For example, Zcash-Shielded Assets could include Zcash-Shielded Bitcoin, Zcash-Shielded USDC and Zcash-Shielded Ethereum. It might also include Zcash-Shielded NFTs, DAOs and other novel use cases.
We’re excited about the potential benefits of an economically extensible Zcash protocol made possible with ZSAs. We are exploring how this might be accomplished in a way that also supports the ongoing advancement of our mission.
As with any major Zcash network upgrade, software and protocol security assessments should be completed. ECC and others in the Zcash community may also advocate for scientific peer review in the case of new cryptography and an economic analysis to evaluate the potential impact of any economic change.
As ZSAs have the potential to affect Zcash economics, ECC is pursuing a study of decentralized markets on the Zcash blockchain which involve multiple assets. We’ve engaged the Computational Experimental Economics Lab at George Mason University, under the direction of Professor Kevin McCabe, to assist with this study. Our overall goal is to develop an economic mechanism that is consistent with the sustainability of Zcash and has an overall positive impact on current cryptoeconomics.
ZSAs should be implemented in a way that’s beneficial to ZEC holders and the community at large. We’ll publish additional blog posts as findings and recommendations become available. We look forward to sharing these updates with the broader Zcash community and together evaluating the different options and tradeoffs for rolling out ZSAs.