In August, ECC shared its rationale for shifting Zcash from a proof-of-work consensus mechanism to proof-of-stake. Whereas most of ECC is targeted on the upcoming deployment of Halo and the shielded-by-default ecosystem within the impending NU5 replace, a couple of of us have begun the preliminary analysis part with a objective of manufacturing a concrete transition proposal to the Zcash group.
This replace describes the most important areas of analysis and open questions we’re investigating. In a subsequent put up, we’ll dive deeper into the continued technical analysis and our preferences.
Analysis areas
ECC’s proof-of-stake analysis focuses on key areas that immediately impression the protection, scalability, and ease of use for ZEC customers. The next is a listing of areas we’re presently reviewing and our preferences inside every space.
Analysis areas:
- Shielded pockets UX & safety
- Our focus is on sustaining current shielded, cell performance.
- We purpose to allow shielded, cell customers to simply delegate ZEC to earn staking rewards.
- Cross-chain interoperability
- We favor protocols with finality over dynamic availability to allow safer interoperability throughout blockchains.
- Proof-of-stake safety
- We favor protocols with finality over dynamic availability as a result of we consider the financial ensures of the previous current higher trade-offs for customers.
- We favor minimal out-of-band prices to run block choice infrastructure to decrease the fee for brand spanking new validators to compete.
- Issuance fee
- We favor an issuance fee strictly equal to or much less than the present Zcash issuance fee, which maintains the 21M ZEC provide cap, whereas probably having decrease issuance within the nearer time period.
- On-chain governance
- We favor to allow customers to simply categorical their preferences by coin weight in polls anybody can create.
- We favor to not enshrine coin-weighted polling to be binding on the protocol or governance layers, and as an alternative to make use of this mechanism as a further supply of suggestions for governance.
- Decreasing protocol complexity
- We favor to solely help newer shielded-transfer capabilities on the goal protocol, excluding t-addrs, Sprout, and Sapling switch protocols.
- We favor to develop a daily and constant retirement course of to allow Zcash protocol to repeatedly evolve with out accruing extreme complexity.
Our strategy:
- We favor to depend on a protocol that demonstrates real-world deployment success.
- We favor protocols with robust theoretical safety foundations.
- We favor to make as few alterations to a protocol as attainable to help Zcash.
- We favor to pick out a goal protocol previous to creating a transition plan.
Analysis targets
Our analysis, like all ECC efforts, are guided by our North Star: to ship a world-class person expertise for ZEC. This requires modern wallets and person interfaces, ubiquitous business choices for utilizing ZEC, safety and security (encompassing all the things from financial design to privateness to protocol and product safety to regulatory readability), steady innovation to evolve with the world, and group alignment round core values.
Provided that North Star, we’ve got 4 high-level targets for proof-of-stake product analysis:
- We purpose to enhance ZEC’s place as a number one non-public, international, permissionless cryptocurrency within the rising Web3 paradigm, in addition to extending its utility for the real-world economic system.
- We study all design selections with a lens of usability and product-market match for current or potential merchandise that combine ZEC.
- If our proposal is to be adopted by the Zcash group, it should fulfill and inspire a considerable financial majority of present and potential future contributors.
- We purpose to take care of ECC’s world-class requirements for designing and deploying protected, non-public, resilient, permissionless protocol designs and implementations.
- We purpose to pick out the very best “minimal viable” goal protocol, based mostly on the assumption that future enhancements could be made to the consensus protocol when needed.
Subsequent Steps
This analysis will finally produce a proposal that recommends Zcash transfer to a proof-of-stake protocol. This proposal might change the broader use case for the ZEC forex and place its underlying applied sciences on the forefront of Web3.
To supply ZEC customers with as a lot info as attainable, we will probably be releasing a collection of technical analysis blogs within the coming months. This may give group members an opportunity to offer suggestions and ask questions on our strategy, lengthy earlier than we start creating a selected proposal.
By releasing our analysis previous to a proposal, we hope Zcash group members perceive our imaginative and prescient for the ZEC forex, and why a change to proof-of-stake would profit ZEC’s utility. We consider this transformation will create a greater person expertise, extra utility, and extra adoption for ZEC, and sit up for suggestions from throughout the group.
