ZSAs: ECC progress and next steps

In line with ECC’s shift to a market- and user-driven product strategy, we continue to gather information to guide next steps with regard to Zcash Shielded Assets (ZSAs, or UDAs as labeled by the Zcash Foundation). We’ll share that information as it becomes available and provide recommendations to the community based upon our assessment. 

Our current efforts include:

  • economic research and modeling that aligns to our mission and the best interests of ZEC holders
  • scientific considerations through ECC’s Scientific Advisory Group
  • industry feedback
  • community feedback gathered, such as the polling the Zcash Foundation has done with its Zcash Community Advisory Panel (ZCAP) 
  • ZEC holder feedback
  • regulatory assessment
  • technical implications and risk
  • feature prioritization assessment

The intent of this post is to outline the steps we’ve taken and expect to take in the weeks ahead. I would like to note that this is our approach at ECC. The Zcash Foundation and others in the community may have different approaches or priorities.

Current state of information gathering

Economic research: As previously communicated, ECC has engaged with the Computational Experimental Economics Lab at George Mason University (GMU). During the last couple of months, they have been baselining and beginning to model different approaches and implications of ZSA support. Modeling for the use of hosting fees as a mechanism for providing value to ZEC holders is underway. Other models will follow and we will publish those results when available.

Scientific considerations: We have met with the world-class ECC Scientific Advisory Group (SAG) on three occasions to discuss various ideas and considerations. Their ideas and feedback have been surfaced to GMU for use in modeling and in support of our research on a possible approach.

Industry feedback: To assess market interest and feedback, we have begun meeting with known industry participants who might have interest in issuing ZSAs. It would be a shame to do the work to make the ZSA capability available only to have it fail because of insufficient market interest. To date, we have met with four different groups and will publish our findings when we complete this work. For those interested in issuing ZSAs, we will begin to engage in technical R&D to assess how best to meet their requirements in the protocol.

Zcash Foundation community feedback: The Zcash Foundation recently released the results of a poll of its advisory panel that indicated those polled strongly support the prioritization of ZSAs. Though there are issues with the poll (1, 2), we believe this is a clear indication of interest from the Zcash Foundation ZCAP members, and we thank the foundation for providing this important data.

ZEC holder feedback: We recently released a blog that outlined our assertion that ZEC holders should have a voice and do not currently have an adequate mechanism to express it. We have decided to pursue a path to poll coin holders in support of our recommendations to the community. While the tools we have available today are rudimentary, we believe our approach is a good first step to allowing them the option to express their beliefs. We plan to conduct a poll that includes ZSAs in late September. 

Regulatory assessment: As we have been meeting with possible issuers, regulatory questions have come to light. Though we haven’t yet begun this work, we intend to look at regulatory implications of different options prior to publishing our recommendations to the community.

Technical implications and risk: As mentioned above, we are assessing the technical requirements in concert with economic modeling, feedback from the ECC SAG and feedback from potential issuers. This work is fluid and we will provide additional detail in support of recommendations made back to the community.

Feature prioritization: We are evaluating feature prioritization for ECC-delivered products based on a host of considerations including positive potential impact for Zcashers and the level of effort required. Much of the information gained to inform that evaluation is outlined above. However, our assessment is more robust than a simple “we should do X first” and includes the level of effort, ordering of capability to maximize impact for Zcashers, user experience considerations, market timing, and potential reach.

What’s next

The ECC team is working hard on the efforts above to the greatest extent possible. Our first priority is the successful launch of Halo Arc with ecosystem support, our contributions for the successful activation of NU5, and related campaigns to bolster those efforts. We strongly desire others in the ecosystem to pursue some of the above work alongside us and welcome the research, industry engagement, and regulatory perspectives of others. We appreciate the love and support for our common mission of bringing economic freedom and opportunity to the world.

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