- Grayscale’s Zcash Trust filing enables regulated exposure to ZEC, highlighting privacy-focused ETP demand.
- Zcash uses zk-SNARKs to protect transaction amounts and identities, balancing privacy with regulatory compliance.
- Shielded z-addresses enhance security against quantum attacks, though zk-SNARK key generation carries some quantum risk.
Grayscale has submitted the first paperwork for its new Grayscale Zcash Trust (ZCSH) using Form S-3. This move is meant to create the first Zcash-based ETPs, showing that more investors are now looking for privacy-focused digital assets.
Craig Salm, Grayscale’s Chief Legal Officer, emphasized the significance of Zcash in modern crypto portfolios. “Zcash, shielded transactions and zk-SNARKs broadly serve a critical role in privacy-preservation on crypto networks,” he stated.
Zcash launched in 2016 as a Bitcoin look-alike but added a powerful upgrade called zk-SNARKs. This technology lets people hide both the amount they send and who they send it to. In simple terms, it gives users strong privacy without breaking the rules.
Because of this feature, Zcash lets users choose what to keep private and what to disclose when needed for regulations. Grayscale says this privacy-focused design makes Zcash a valuable addition to a crypto portfolio because it blends confidentiality with transparency in a balanced way.
Understanding Zcash and zk-SNARKs
On the ZEC network, shielded transactions utilize zk-SNARKs, while unshielded transactions remain publicly visible. This dual system allows users to control what information is shared. Moreover, shielded transactions—processed via z-addresses—provide enhanced security against potential quantum computing attacks.
Salm noted that z-addresses do not expose public keys, reducing risks from quantum algorithms like Shor’s. However, zk-SNARK key generation mechanisms may still carry some quantum vulnerabilities, creating a nuanced quantum-risk profile for Zcash.
Grayscale has already converted several crypto trusts to ETPs, including XRP, Dogecoin, and SOL. The firm began this trend following its successful Bitcoin ETF debut after a legal challenge with the SEC.
The Trump administration has been pushing for clearer rules around digital assets. Because of that, launching Zcash ETPs fits well with both the clearer regulations and what the market is now asking for.
