Zenrock, the developer behind zenZEC, has announced a significant milestone. Its wrapped ZEC token reached $15 million in trading volume since its launch on October 31. This development is crucial as it revives the presence of Zcash in the Solana DeFi ecosystem. The solution offers ZEC holders a new path for interoperability and access to Solana’s liquidity.
The $15 million volume, according to reports from Phemex, underscores the initial interest. The design of zenZEC is key to its security. It maintains a strict 1:1 backing with native ZEC. Furthermore, it utilizes a decentralized multi-party computation (MPC) network. This mechanism distributes private keys among multiple independent nodes. In this way, Zenrock aims to mitigate concentration risks and eliminate single points of failure. Currently, the project is focused on actively boosting liquidity on the popular decentralized exchange (DEX) Orca.
The arrival of zenZEC is crucial for privacy on Solana. A previous version of ZEC on the network, introduced by the Zolana bridge on October 16, only replicated balances in clear text. This implementation sacrificed the intrinsic privacy of Zcash. To fix this deficiency, Encifher introduced eZEC. It is an encrypted re-wrapper that restores confidentiality at the asset level. This solution is already operational on the Jupiter DEX, according to data from KuCoin, using advanced cryptography to protect the user.
Is this the definitive solution for private transactions on the Solana network?
The eZEC solution is technically sophisticated. It combines fully homomorphic encryption (FHE), which allows operations on encrypted data, with zero-knowledge proofs (ZKP). The confluence of zenZEC and eZEC facilitates private participation in swaps and yield strategies. This is achieved without exposing amounts or counterparties. Therefore, the attack surface for extractive practices like front-running is reduced. However, risks persist due to the operational complexity of MPC technology. Challenges also exist in auditing these encrypted solutions.
The sustained adoption of these solutions will depend on two key factors. First, the effective liquidity they manage to attract on Orca and Jupiter. Second, the trust generated by the MPC custody and the cryptographic security of eZEC. Zenrock is already planning its next strategic steps. These include expansion to other protocols and support for ZEC staking. Additionally, the firm will develop a wrapped Bitcoin called zenBTC. These future deployments will measure whether privacy gains sustained traction in the DeFi space.
