ZkStable Whitepaper
zkStable:
A Privacy-Focused Stablecoin Protocol
Abstract
zkStable is a novel stablecoin system designed to achieve the “holy grail” of stablecoin design: a USD-pegged token that is price-stable, decentralized, and privacy-preserving. The protocol issues $pUSD, a stablecoin pegged 1:1 to the U.S. dollar, fully backed by native Zcash (ZEC) collateral via a zero-knowledge proof-of-reserve model. Uniquely, zkStable does not wrap ZEC or rely on centralized custodians; instead it uses zk-SNARK proofs to verifiably prove reserves on the ETH Chain without revealing sensitive information. This approach allows users to collateralize shielded ZEC and mint pUSD on ETH Chain, combining the transparency of cryptographic proof with the confidentiality of Zcash’s shielded pools. The protocol also introduces $PRIVACY, a governance and utility token that facilitates decentralized decision-making, staking, and fee distribution. Together, $pUSD and $PRIVACY empower a self-governed ecosystem that prioritizes financial privacy, censorship-resistance, and compliance in equal measure. In this whitepaper, we detail zkStable’s motivation in the context of the stablecoin trilemma, the system architecture bridging Zcash and ETH Chain, the zero-knowledge collateral model, token economics, privacy mechanisms, and the roadmap toward a fully decentralized, privacy-centric stablecoin. We also explore real-world use cases, compare zkStable to existing stablecoins like DAI, USDC, and Haven’s xUSD, and discuss the risks and mitigations involved. zkStable’s vision is to provide a stable, private, and decentralized digital currency – a foundation for economic freedom in the Web3 era.
Introduction: The Stablecoin Trilemma and the Need for zkStable
Stablecoins have emerged as critical assets in the crypto ecosystem, offering the price stability of fiat combined with the programmability of cryptocurrencies. However, stablecoin designs face a well-known “stablecoin trilemma,” wherein achieving price stability, decentralization, and capital efficiency simultaneously has proven extremely challenging. According to this trilemma, any stablecoin can reliably optimize for at most two of these properties at the expense of the third. For example, fiat-backed stablecoins like USDC prioritize price stability and capital efficiency (1:1 backing with minimal reserves) but sacrifice decentralization by relying on a central issuer. Crypto-collateralized stablecoins like MakerDAO’s DAI emphasize decentralization and stability but are capital-inefficient – users must often lock $1.50+ of collateral to mint $1 of stablecoin, tying up excess capital to maintain the peg. Meanwhile, experimental algorithmic stablecoins have attempted to maximize decentralization and efficiency by forgoing full collateralization, only to suffer catastrophic failures in maintaining their pegs (as seen in historical examples like Terra’s UST).
An often overlooked aspect in this trilemma is privacy. Virtually all major stablecoins today operate on public ledgers, meaning users’ transaction histories and balances are fully transparent to anyone. This lack of privacy not only compromises individual financial confidentiality but also enables pervasive surveillance and blacklisting by authorities or corporations. For instance, regulators and blockchain analytics firms like Chainalysis can easily track flows of popular stablecoins, undermining their utility for users in oppressive regimes or anyone who values financial privacy. Centralized issuers have frozen stablecoin funds on specific addresses, as evidenced by millions of dollars in Tether (USDT) being frozen on Ethereum addresses without due process. While DAI avoids direct blacklists through decentralization, it still inherits the transparency of Ethereum – every DAI transaction is traceable, and typical usage links to a user’s known wallet, offering “very little to offer in terms of privacy” for the end-user. To date, Haven Protocol’s xUSD (built on a Monero fork) has been one of the few stablecoins focusing on on-chain privacy. However, xUSD achieves its USD peg through an algorithmic mint-and-burn of a volatile token (XHV), introducing significant economic risk and requiring users to operate within a separate isolated network.
The need for zkStable arises from these gaps. zkStable’s mission is to deliver a privacy-focused stablecoin that does not compromise on decentralization or stability. It attempts to solve a quadrant of challenges: maintain a strong USD peg, use sound decentralized collateral, and ensure end-to-end privacy for users – all while employing robust risk controls even if it means reduced capital efficiency. By using Zcash (ZEC) – a proven privacy coin – as collateral and leveraging zero-knowledge proofs, zkStable aims to demonstrate that the stablecoin trilemma can be addressed without ignoring privacy as a core principle. Users of zkStable can transact in a stable USD value on the ETH Smart Chain (a high-performance, EVM-compatible blockchain) while keeping their collateral and identity hidden. This design empowers individuals in high-surveillance environments (who might use stablecoins to escape inflation or capital controls) to do so without leaving an obvious trail. It also caters to DeFi traders and institutions who wish to protect their trading strategies and financial data from public view, something not possible with transparently tracked stablecoins.
In summary, zkStable is motivated by the convergence of three needs:
Stable Value: A reliable USD peg for use in everyday transactions and DeFi, addressing the “price stability” arm of the trilemma.
Decentralization: No reliance on fiat bank reserves or trusted custodians; the system is governed by users via code and a governance token, ensuring censorship resistance and self-sovereignty.
Privacy: Strong financial privacy by default, leveraging Zcash’s shielded transactions and zk-SNARK verification to keep user balances and activities confidential.
By combining these elements, zkStable represents a next-generation stablecoin protocol for the era of Web3, where user sovereignty and privacy are increasingly paramount. The following sections provide a detailed overview of the system’s architecture and mechanisms.
System Overview
zkStable comprises two primary on-chain environments working in tandem: the Zcash blockchain (for collateral management) and the ETH Smart Chain (for stablecoin issuance and usage). At a high level, users lock native ZEC into Zcash’s shielded pool as collateral, and in return they can mint an equivalent value of $pUSD on ETH Chain, subject to collateralization ratios and protocol rules. The innovation lies in how these two chains communicate: rather than “wrapping” ZEC via a centralized bridge, zkStable employs zero-knowledge proofs to attest to the presence of collateral on Zcash without revealing its details. The ETH Chain smart contracts maintain a running proof-of-reserve, ensuring that every pUSD in circulation is provably backed by sufficient ZEC on the other side, even though those reserves remain confidential.
Figure: Cross-chain zkStable stablecoin issuance and redemption via ZK-Proofs.
In the diagram above, the lifecycle of pUSD is illustrated. A user who wants to mint pUSD first deposits ZEC into a special shielded address/pool on the Zcash chain (Step 1). This ZEC deposit is fully encrypted by Zcash’s protocol (using zk-SNARKs in Zcash’s own consensus), meaning outsiders cannot discern the amount or sender. The user then generates a zk-SNARK proof of this deposit (Step 2) – essentially a cryptographic certificate that “I have locked X ZEC in the pool” – without revealing which ZEC UTXO or address is theirs. This proof is submitted to zkStable’s ETH Chain smart contract, which verifies it using an on-chain zk-SNARK verifier (Step 2, continued). Upon successful verification, the contract mints the corresponding amount of $pUSD to the user’s ETH Chain wallet (Step 3). At this point, the user holds pUSD tokens on ETH Chain, which they can use freely in DeFi applications, transfers, or payments, while the ZEC collateral remains locked and unseen in Zcash’s shielded pool.
The reverse process is redemption. When a user wants to redeem pUSD for the underlying ZEC, they send their pUSD back to the zkStable contract on ETH Chain for burning (Step 4). The protocol then requires a proof that an equivalent amount of ZEC can be unlocked to the user. This can be done in two ways depending on the implementation: (a) the protocol might have retained control of the shielded ZEC (via a pool or multi-signature) and now generates a proof that the corresponding ZEC note can be spent to the user, or (b) the user presents a zk-proof-of-burn (Step 5) and a withdrawal request such that the system releases the ZEC from the shielded pool to the user’s Zcash address (Step 6). In either case, zero-knowledge proofs ensure that the burn of pUSD on ETH Chain is tied to a valid release of ZEC on Zcash, without linking the two events in a way that compromises privacy. Throughout this cycle, observers can verify that the total supply of pUSD never exceeds the proven reserves of ZEC (thanks to the proofs), but they cannot see individual collateral deposits or user identities – preserving confidentiality even as the system remains cryptographically auditable.
Some key components of the zkStable system include:
ETH Chain Smart Contracts: These include the pUSD token contract (an ERC-20 token tracking balances and transfers), a collateral verifier contract (hosting verification keys and logic to verify Zcash deposit proofs), and a vault/state contract that records total issued pUSD vs. reserves. The contracts also implement rules such as minimum collateralization ratio, fee collection, and the interface for redemptions and proof submissions.
Zcash Shielded Pools: zkStable leverages Zcash’s latest shielded pool (Orchard or Sapling) to hold collateral. Zcash’s use of zk-SNARKs means one can prove membership and value in these pools succinctly. The protocol may designate specific shielded addresses (or a multisig shielded address, if applicable) as the “vault” where all collateral accumulates, or it may accept any shielded address deposit as long as a valid proof is provided.
zk-SNARK Bridges: A crucial piece is the cross-chain bridge via zk proofs. zkStable likely uses a custom zk-SNARK circuit that takes as input: a Zcash transaction or note commitment, the amount of ZEC locked, and a recent Zcash block header or Merkle root to ensure the note’s existence in the state. The circuit outputs a proof that “a UTXO of at least X ZEC is locked in the Zcash shielded address controlled by the protocol”. This proof is verified on ETH Chain. Periodically, the system may update the Zcash state root on ETH Chain (possibly via an oracle or a light client) so that proofs can be checked against the latest state. This mechanism is analogous to a trustless bridge – no single custodian needs to be trusted, only the validity of the math.
Price Oracle: Because ZEC’s value fluctuates, zkStable uses an oracle feed (e.g., Chainlink or a decentralized price feed) to determine the USD value of ZEC. This ensures that if a user deposits, say, 1 ZEC, the system knows how many pUSD can be issued (e.g., if 1 ZEC = $50, a fully backed position might allow up to 50 pUSD for 1 ZEC at 100% collateralization, or less if an over-collateralization policy is enforced). Oracles also trigger collateral ratio checks for safety.
Governance and Utility Token ($PRIVACY): $PRIVACY is introduced (detailed later) to govern system parameters and incentivize certain behaviors (like staking to earn fees or participating in collateral auctions if needed). While $PRIVACY is not directly involved in everyday minting or redemption, it underpins the decentralized governance that keeps zkStable automated and trust-minimized.
In essence, zkStable’s system overview can be summarized as a cross-chain MakerDAO-like vault, where Zcash acts as the vault holding collateral and ETH Chain hosts the stablecoin and governance logic. The twist is that all interactions with the vault (Zcash side) happen through cryptographic proofs rather than explicit messages or custodial escrow. This design aims to maintain the integrity and solvency of the stablecoin (every pUSD is backed by real ZEC) while minimizing information leakage about who owns what collateral or how much. The following sections delve deeper into how exactly the zk proof-of-reserve model works, the protocol architecture on each chain, token economics, and how zkStable addresses the balance between privacy and necessary compliance.
ZK Proof-of-Reserve Collateralization Model (Option B)
In designing a cross-chain collateral model for zkStable, two approaches were considered: Option A, a traditional “wrapped asset” bridge (where users send ZEC to a custodian or smart contract which then issues wrapped ZEC on ETH Chain, to be used for minting pUSD), and Option B, a zk-SNARK based proof-of-reserve approach. Option B was chosen for its superior trust minimization and privacy. Under Option B, zkStable never creates a visible pool of wrapped ZEC; instead, the system leverages zero-knowledge proofs to prove collateralization to the ETH Chain. This section explains how Option B works in practice.
Native ZEC Deposits into Shielded Pools on Zcash
Collateralization starts on the Zcash blockchain. A user who wants to mint pUSD will acquire native ZEC (if they don’t already have some) and perform a shielded deposit. This involves sending ZEC to a shielded address associated with the zkStable protocol. The zkStable team or governance will have established one or more official shielded addresses (or a pattern of addresses) that serve as the “reserve pool.” When users deposit into this pool, their ZEC becomes part of zkStable’s collateral reserves. Importantly, because the address is shielded, the amount and sender of each deposit are encrypted. Zcash’s protocol uses zk-SNARKs (specifically, as of 2022, the Halo 2 proving system without a trusted setup) to ensure that even though transactions are encrypted, the network can validate they are correct and the totals balance out. For zkStable’s purposes, using shielded ZEC means no public ledger of deposits – outsiders cannot simply look up an address to see how much ZEC is held or from whom. All that is publicly known (to someone monitoring Zcash) is that coins moved into a shielded pool, but not their linkage or amounts.
The choice of Zcash is deliberate. Zcash is one of the most mature privacy coin networks, with a strong track record in zero-knowledge technology and security audits. By using native ZEC, zkStable benefits from the strong privacy guarantees Zcash offers (such as encrypted memo fields, shielded address balances, and diversified address types) and its liquidity as an asset. This is unlike using, say, Monero, where integrating an efficient proving system on another chain would be harder due to its ring-signature design. Zcash’s cryptographic toolkit allows a relatively clean “proof of deposit” to be extracted for external verification. Additionally, Zcash’s monetary policy and market presence make ZEC a robust collateral candidate (ZEC is widely traded and has a known USD value feed, critical for a stablecoin).
From a user perspective, depositing ZEC might involve using a custom wallet or interface provided by zkStable. The user would generate a shielded address (or get a deposit address from the protocol), and send their ZEC to it. Once confirmed, the ZEC is locked in the protocol’s shielded reserve. The user retains a secret (a spending key or note) that can later be used to withdraw that ZEC, but only under the rules of the zkStable protocol (i.e., upon burning the corresponding pUSD). At this point, the user is ready to mint pUSD on ETH Chain, armed with the information about their deposit.
zk-SNARK Proofs Verifying Collateral on ETH Chain
To mint pUSD on ETH Chain without trusting a custodian, zkStable employs a zk-SNARK proof-of-reserve system. In simple terms, before the ETH Chain will mint new pUSD, it must be presented with a valid proof that “the user has deposited X amount of ZEC into the reserve pool on Zcash and not withdrawn it yet.” This proof is generated off-chain by the user (or with the help of a proving service or relayer) and then verified on-chain by the zkStable smart contract.
The proof system works roughly as follows:
Circuit Design: A zero-knowledge circuit is constructed that encodes the logic: “Given the latest anchor (Merkle root) of the Zcash shielded pool, and given a note commitment and nullifier (the cryptographic identifiers of a shielded deposit), prove that this note of amount X ZEC exists in the pool and has not been spent, and that it belongs to the zkStable reserve address.” The circuit might take as private witness inputs the note’s secret key or commitment randomness (known to the depositor) and as public inputs the amount X and the Merkle root. If the note is valid and unspent, the circuit produces a proof π that convinces verifiers of this fact without revealing which note it is.
On-Chain Verification: The zkStable contract on ETH Chain holds a verifying key for this zk-SNARK (generated through a trusted setup or using a trustless proving system if possible). It also maintains the latest accepted Merkle root of the Zcash shielded pool’s state (which can be updated by an oracle or a set of watchers whenever new Zcash blocks are mined). The user (or a relayer) submits a transaction to the zkStable contract with the proof π and the claimed amount X. The contract runs the zk-SNARK verifier, which returns true only if the proof is valid relative to the known root.
Minting pUSD: If the proof verifies, the contract knows that “X ZEC is now locked in reserves for this user.” The contract can then mint pUSD to the user’s ETH address. Typically, the amount of pUSD minted will be equal to the USD value of X ZEC multiplied by a collateralization factor. For example, if the protocol requires 150% collateralization, depositing $150 worth of ZEC yields 100 pUSD. The user might choose to only mint up to a safe threshold to avoid liquidation risk. (The exact ratios and risk parameters are governed by $PRIVACY holders and are discussed in Token Economics.) The key here is that the ETH Chain is assured of collateral existence, but it learned only the amount X and nothing about who deposited or which Zcash note corresponds to this X.
This zk-proof approach essentially functions as an automated, privacy-preserving audit. It’s analogous to a Merkle proof that shows an item is in a set, except done with zero-knowledge so the item itself (and its position) remain hidden. It provides a cryptographic proof-of-reserves: at any time, the total pUSD supply on ETH cannot exceed the sum of all proven ZEC deposits (the contract will refuse to mint beyond verified proofs). Unlike conventional “Proof of Reserve” audits where an exchange or custodian periodically publishes a list of addresses or gets an auditor’s attestation, zkStable’s proof is continuous and trustless. Every single issuance of pUSD comes with a corresponding zk-proof. This offers strong assurances to pUSD holders that the stablecoin is fully backed, without relying on any human attestation. Notably, even Binance (which has explored zk-proof-of-reserve for exchange assets) faced technical bugs; zkStable’s entire design is built around getting this right from the ground up, with extensive audits planned for the circuits.
Minting and Redemption Mechanics for $pUSD
Minting pUSD: As described, minting occurs once a deposit proof is verified. Let’s illustrate a concrete flow: Suppose Alice deposits 10 ZEC into zkStable’s Zcash shielded address. Assume the current market price of ZEC (fetched via oracle) is $30 per ZEC. That means Alice’s collateral is worth $300. If zkStable requires a minimum collateral ratio of 150%, Alice can mint at most 200 pUSD from this deposit (since $300/1.5 = $200). Alice might choose to mint only 150 pUSD to be conservative. She uses the zkStable dApp to generate a proof for her 10 ZEC deposit and submits it, requesting 150 pUSD. The contract verifies the proof and mints 150 pUSD to Alice’s ETH Chain address. Alice now holds a balance of 150 pUSD, and the contract internally records that her 10 ZEC (worth $300) is allocated against 150 pUSD of debt, yielding a collateralization of 200% for her position.
It is possible for Alice to repeat this process and deposit more ZEC or partially repay pUSD and re-mint, etc., similar to how MakerDAO vault owners manage their positions. However, a key difference is that the protocol itself does not necessarily track positions by user address – in fact, due to privacy, it might not know which ETH address corresponds to which Zcash deposit. The system could be designed to track overall system collateralization and allow anyone with a valid proof to mint new pUSD. This means positions are somewhat fungible from the protocol’s perspective (though the user of course knows their own situation).
Fees: During minting, the protocol may charge a small fee (e.g., 0.1% of pUSD minted or a stability fee accruing over time). Fees could be paid in pUSD or automatically deducted in the minting process, and are typically sent to a treasury governed by $PRIVACY holders or distributed to $PRIVACY stakers (see Token Economics). Such fees discourage abuse and provide revenue to the system.
Redemption of pUSD: Redeeming is the reverse. A user (say Bob) who holds pUSD can burn it to retrieve ZEC. If Bob was the one who originally deposited ZEC, he can present a proof-of-ownership of that ZEC (or simply an authentication that links his ETH address to a Zcash note, depending on design) when redeeming. If Bob is a secondary market holder of pUSD (he bought pUSD from someone else), redemption still works – pUSD is a bearer instrument; any holder can redeem as long as the system is sufficiently collateralized.
The mechanics: Bob sends, e.g., 100 pUSD to the zkStable contract on ETH chain and requests redemption. The contract will require that an equivalent amount of ZEC (valued via oracle) be released. If Bob originally deposited, he can create a Zcash transaction spending his note (which had, say, ~150% of that value) and send 100 pUSD worth of ZEC to himself, and provide a proof to zkStable that he has done so (a zk-proof-of-burn meaning the note corresponding to 100 pUSD is now spent). The contract would then mark those pUSD as redeemed (burn them) and update the reserve accounting.
If Bob did not deposit initially, the system might allow any pUSD holder to redeem from a common reserve. In that case, who provides the ZEC? One approach is the protocol holds a pool of all ZEC collateral and can have a mechanism to send out ZEC when pUSD is returned. Perhaps the protocol’s shielded reserve address is controlled by a governance multi-sig or a smart contract (though Zcash itself does not have smart contracts, but a timetable or a “dummy” spending key held by governance might exist). A more decentralized approach is to require the redeemer to have a Zcash address, and the protocol will create a Zcash transaction from the reserve to that address, but that would break privacy if done naively.
A likely design is that redemption also uses zk-proofs: The redeemer Bob generates a proof that “some amount of ZEC in the pool equal to Y (the redemption amount) is being withdrawn to address Z”, and that the corresponding pUSD has been burned. Perhaps $PRIVACY governors or a subset of trusted operators have the spending key to actually sign the Zcash transaction once the proof is verified (this introduces partial trust – see Risks and Compliance on how this might be handled). Alternatively, the system might not allow arbitrary redemption unless you hold the original deposit note, in which case pUSD holders would usually trade back to original minters (similar to how some algorithmic designs work). However, that would harm fungibility and is not ideal.
The preferred mechanism is: any pUSD holder can redeem directly. To support this, zkStable could maintain an “anonymous set” of deposits and allow redemption proofs that do not require identifying a specific original deposit. For instance, Bob could present proof that “the total reserves exceed the total supply by at least X, therefore X pUSD is safely redeemable” – essentially allowing redemption from the aggregate pool. This would be accompanied by the actual movement of ZEC out of the shielded pool, which could be effected by a governance-controlled key or, in future, by a programmatic shielded transfer if Zcash implements hooks for that.
During redemption, a redemption fee might apply (e.g., 0.1-0.5%) to prevent continuous churn and reward long-term stability providers. After burning Bob’s 100 pUSD, Bob would receive ~100 pUSD worth of ZEC minus fees, delivered to a Zcash address he provides (likely a shielded address, preserving privacy on the withdrawal as well).
Maintaining the Peg: zkStable’s pUSD should trade around $1. The peg is enforced by arbitrage: if pUSD < $1 on the market, arbitragers can buy cheap pUSD and redeem it for $1 of ZEC from the protocol (assuming redemption is open to all), thereby profiting and reducing pUSD supply until price returns to $1. If pUSD > $1, users can mint new pUSD by depositing $1 of ZEC and sell pUSD at a premium, increasing supply until the price goes down. This arbitrage works only if the system reliably honors 1 pUSD claims for $1 of collateral. Therefore, a high priority is ensuring the system remains solvent and overcollateralized even in volatile conditions. If ZEC price plunges, the protocol might require additional collateral or partial liquidation of positions. zkStable could implement a liquidation module: if a position’s collateral ratio falls below, say, 110%, the system might allow other participants to submit a proof and buy that collateral by paying off the pUSD (similar to MakerDAO auctions, but proving a position’s state might be complex under full privacy). At minimum, zkStable will flag under-collateralized situations and could disable new pUSD minting or redemptions until resolved (this is a last resort to avoid bank runs). These safeguards ensure that pUSD holders can trust the peg’s integrity, even if it’s not as immediately simple as USDC’s 1:1 bank redemption.
Privacy Guarantees Throughout
Privacy is woven into every step of zkStable’s collateralization model:
During Deposit: When Alice deposits ZEC, the fact that she deposited and the amount are not revealed publicly. Outsiders just see an increased shielded pool size on Zcash, indistinguishable from any other shielded transaction. Multiple users’ deposits mix in the same pool, giving a large anonymity set. Alice’s identity remains zkStablenymous – linked only to a Zcash address which itself is shielded.
Proof Submission: The zk-proof that Alice submits to ETH Chain reveals only the necessary minimum: it might reveal the amount of ZEC (or the USD equivalent) she is proving, but it does not reveal which transaction or which note corresponds to that amount, nor anything about her identity. The proof is a short cryptographic blob that either verifies or not. So on ETH Chain, all observers see is “some address minted X pUSD with a valid proof.” If Alice is cautious, she can improve privacy further by using a fresh ETH Chain address to receive the pUSD (one not linked to her other activities). She might even route the proof submission through a relayer so that her ETH address is not directly associated with the transaction that included the proof. This would break any on-chain linkage between the deposit event on Zcash and the mint event on ETH.
Holding pUSD: Once pUSD is in circulation on ETH Chain, transactions with it are subject to the normal privacy (or lack thereof) of that chain. ETH Chain (being similar to Ethereum) uses an account-based model with transparent transactions. zkStable does not (at least in its initial design) obfuscate pUSD transfers on ETH Chain – anyone can see pUSD moving from one address to another. However, users who desire more privacy at the transaction level could use mixing services or privacy layers on ETH (for example, deploying pUSD on a DEX that integrates with a zk-rollup or using future privacy features of ETH Chain). One promising avenue is zkETH, an initiative by ETH Chain to create a ZK-rollup, which could potentially support private transactions. In the meantime, zkStable ensures that the linkage between the stablecoin and the user’s original holdings is broken. If Alice uses her pUSD within DeFi, no one can trace it back to “Alice’s Zcash stash” – at worst they see an address on ETH Chain. This is already a leap in privacy compared to something like DAI or USDC, where not only are all transfers visible, but in USDC’s case, the issuer can associate addresses with KYC identities and freeze them.
Redemption Privacy: When redeeming, if Bob redeems pUSD to ZEC, the ideal scenario is that Bob provides a shielded Zcash address to receive the ZEC. The transfer out of the reserve pool can itself be a shielded transfer, meaning the withdrawal does not reveal Bob’s address or amount to external parties. Observers on Zcash might just see a shielded transaction from the pool to another shielded address, with no clue it was a redemption from zkStable. On ETH Chain, the burning of pUSD by Bob’s address is visible, but if Bob used a fresh address to acquire and redeem that pUSD, it’s hard to tie that to his real-world identity. The protocol could also allow in-place redemption: if Bob originally deposited, he can simply withdraw his same note (plus any surplus collateral). That process just looks like a user spending their own Zcash note, which is the normal private operation on Zcash – again nothing linking it publicly to pUSD.
Overall, zkStable guarantees end-to-end privacy in the sense that one can go from ZEC to pUSD and back to ZEC without ever revealing one’s identity or transaction history on a public ledger. The only information that leaks is aggregate and non-personal: the total supply of pUSD is public on ETH, and each mint/redeem event’s sizes are public (though not linked to a persistent identity if users take care). This is a necessary trade-off, since the value of stablecoins comes from being widely usable and transferable on a blockchain. zkStable’s approach is to minimize what is public to just what’s needed for the system’s function, and keep everything else (collateral specifics, user linkage) private by default. This level of privacy is unprecedented for a collateral-backed stablecoin: even Haven’s xUSD, while private in transactions, had the sizes of conversions somewhat inferable from on-chain data, and DAI’s model exposes all vault details. zkStable proves that confidentiality and transparency can coexist via cryptography – you get the transparency of mathematical certainty that reserves are there, but the confidentiality that traditional bank stablecoins or physical cash would offer.
Protocol Architecture
zkStable’s architecture spans multiple components and layers to achieve its cross-chain, privacy-preserving stablecoin functionality. Here we outline the major architectural elements and how they interconnect:
Smart Contracts on ETH Chain
On the ETH Smart Chain, zkStable deploys a series of smart contracts that coordinate the issuance, management, and governance of pUSD:
pUSD Token Contract: This is a ERC-20 token contract implementing the stablecoin. It keeps track of balances, allows transfers, and conforms to standard interface so that pUSD can integrate with wallets, exchanges, and DeFi protocols on ETH Chain. The token contract is likely upgradeable or controlled by the main zkStable contract to allow for features like pausing (in emergencies) or blacklist (if absolutely needed for legal compliance, though ideally it’s immutable with no blacklist to maintain decentralization and fungibility).
Collateral Verification Contract (zkStableVault): This is the core logic contract. It handles incoming proof submissions for minting and requests for redemption. The contract stores important state variables: the current total outstanding pUSD, the system-wide collateral value (proved via all accepted proofs minus redemptions), and parameters like collateralization ratio, fees, and pause flags. When a user submits a zk-proof to mint, this contract invokes the zk-SNARK verifier precompiled contract (or an in-contract verifier if provided) to check the proof. If valid, it mints pUSD by calling the pUSD token contract to mint to the user’s address. Conversely, when burning pUSD for redemption, this contract verifies the corresponding proof-of-burn and then authorizes release of collateral.
ZK Verifier Component: The verifier might be integrated into the zkStableVault or exist as a library. ETH Chain (being EVM-compatible) can support zk-SNARK verification, typically using precompiled contracts for elliptic curve operations. The zkStable contracts would include verifying key constants and perform the pairing checks necessary for Groth16 proofs (or whichever proof system is used). Given the complexity, the verification might be a separate contract called by the main logic to keep things modular.
Oracle/Price Feed: zkStable relies on a price feed for ZEC/USD to determine how much pUSD to mint per ZEC and to check collateral ratios. Likely, a Chainlink oracle or similar is integrated. The architecture can include an Oracle contract that aggregates price data from feeders (could be multiple sources for decentralization). The zkStableVault reads from this oracle when needed (e.g., ensuring that at the time of minting, X ZEC * price gives Y USD value, and enforcing mint limits accordingly).
Governance Contract: Since zkStable uses $PRIVACY for governance, there is a contract (or set of contracts) governing how proposals are made and executed. This could be a standard governance module where $PRIVACY token holders vote on changes (like adjusting fees, collateralization ratio, adding new collateral types in future, electing oracle providers, etc.). The governance contract likely has timelocked control over certain parameters in the zkStableVault (for example, it can call an update function to change the minimum collateral ratio or to switch the oracle address, after a successful vote). It might also control an upgrade mechanism if contracts are upgradable.
Treasury/Reserve Management: Fees collected (in pUSD or $PRIVACY) need somewhere to go. A Treasury contract could hold these assets. It might allow $PRIVACY stakers or governance to later withdraw them or use them (for example, to buy back $PRIVACY from the market, or to fund development grants). If zkStable collects any ZEC as fees (e.g., maybe a tiny portion of collateral is taken), handling that cross-chain is complex, so likely fees are in pUSD or $PRIVACY on ETH.
Compliance Hooks (if any): Although zkStable is decentralized, the architecture can include optional compliance features. For instance, the pUSD token might have an admin key that can freeze transfers on specific addresses – a highly contentious feature in a privacy coin, but something regulators often demand. The whitepaper problem statement suggests “optional transparency,” so it’s possible zkStable’s contracts have a dual-mode: by default, privacy and censorship-resistance are paramount (no routine blacklisting or surveillance), but if required by law (through governance decision), certain addresses could be barred or flagged. The architecture might implement this by having the governance contract as the owner of the token contract with the ability to call freeze(address) in extreme cases. This power would be subject to decentralized governance (so not at the whim of a company, but a collective decision). Ideally, it’s never used, but existing as an option could make regulators more comfortable (discussed more in Privacy & Compliance section).
Performance-wise, these contracts will be optimized for ETH Chain’s environment. One big architectural consideration is that verifying a zk-SNARK on-chain can be computationally heavy (though Groth16 proofs are quite efficient to verify, often ~200k gas). zkStable might limit how many proofs can be verified per block or use batching if possible. There could even be a system where multiple deposits are aggregated into one proof (to amortize costs) if users coordinate – though that adds latency.
Zcash Integration via ZK Proofs
On the Zcash side, zkStable isn’t a smart contract (Zcash doesn’t support user-defined smart contracts), but rather a set of conventions and off-chain infrastructure:
Shielded Reserve Pool: As described, this is basically an address (or set of addresses) in Zcash that accrues deposits. It could be as simple as one shielded address whose private key is split among zkStable governance (so it can later spend from it for redemptions). Alternatively, each deposit could go to a fresh address derived from a viewing key so that the protocol can observe deposits without being able to spend them until certain conditions. The integration needs the ability for the zkStable system to eventually move funds out for redemption, so likely a multi-signature custody is involved. Since Zcash shielded addresses don’t natively have multi-sig, one approach is that the collateral is held by a foundation or smart custody solution that agrees to only release funds when given a valid proof-of-burn on ETH. This introduces partial trust – albeit distributed if multiple parties hold keys. The long-term goal would be to eliminate even that trust, perhaps via a future Zcash feature or a sidechain, but currently a pragmatic approach might involve a “controller” entity for the ZEC.
Light Client / State Updates: To verify Zcash notes on ETH Chain, zkStable needs the latest Merkle root of the shielded pool (and possibly the latest block hash for context, to avoid replay of old proofs). The architecture likely includes a relayer or oracle that watches the Zcash blockchain and whenever a new shielded pool root is published (every block), it calls a function on ETH Chain to update this root in the zkStable contract. This could be done by a decentralized set of oracles or simply by one reliable feed (the risk of a bad update is mitigated by the fact that it would have to correspond to an actual Zcash block – maybe a malicious root could be reported if the oracle lied, but if multiple independent oracles are used with a consensus or majority vote, this risk is low). Another approach is to use a Pegasus or XCLAIM style light client: implementing Zcash block verification in an ETH smart contract. However, Zcash’s consensus is resource-heavy and not trivial to verify in EVM. More feasible is checking a Zcash proof-of-work header and having a known valid root from each block – possibly too much for solidity. So an oracle is a simpler design choice.
Proof Generation Tools: The zkStable team will likely provide a tool or SDK for users to generate the required zk proofs (deposit proof and withdraw proof). This could be a command-line tool or integrated into a web interface, using libraries like zcash-halo2 or custom circuits. Generating a proof might take several seconds on a user’s machine, and involves providing one’s Zcash secret details. Some users might not want to do this themselves, so the architecture could include proving service relayers: entities that the user can trust with some data to generate proofs on their behalf. Ideally, proofs are generated locally for security. If zkStable uses modern proving systems, they might also explore recursive proofs to compress multiple operations into one or to allow proofs-of-proofs for efficiency.
Reserve Auditing and Emergency Tools: Although privacy is maintained, the architecture must include a way to audit or recover if something goes wrong. For example, there might be an Emergency Shutdown mechanism (similar to MakerDAO’s global settlement) where if governance decides, it can freeze pUSD and allow holders to claim collateral directly. In zkStable’s case, that’s complex, but perhaps the emergency fallback is that the controlling keys of ZEC reserves can publish a list of all deposits (sacrificing privacy) to let people recover funds. This would only be in a dire scenario (smart contract bug, etc.), but it’s worth noting from an architecture perspective.
In summary, the architecture connecting Zcash and ETH is a blend of on-chain contracts and off-chain processes that together create a bridge secured by math, not middlemen. The zkStable contracts, oracle updates, and zk-proof verifications ensure that even though two different blockchains are involved, the system behaves coherently as one macro-system.
AI Compliance Monitoring (Optional Transparency)
One intriguing aspect mentioned for zkStable is “AI compliance monitoring” with “optional transparency.” This indicates that the protocol will incorporate tools to satisfy regulatory concerns without compromising user privacy unless necessary. The architecture likely leverages off-chain AI systems that analyze patterns in the on-chain data and possibly voluntary disclosures.
Here’s how this could be implemented:
On-chain Analytics Feed: zkStable’s governance or foundation could run an AI-based monitoring system that watches pUSD transactions on ETH Chain (which are public) and perhaps Zcash shielded pool activity in aggregate. This AI could use machine learning models to flag suspicious patterns, such as very large pUSD movements that immediately exit to certain addresses, or sudden spikes in redemption that might indicate a money laundering “cash-out.” Because individual identities are hidden, the AI works on metadata: timing, frequency, statistical anomalies. If something potentially illicit is detected, the system could alert governance.
Selective Transparency via Viewing Keys: Zcash has the concept of viewing keys – a key that an address holder can share to allow a third party to see their otherwise private transactions. zkStable could adopt a similar concept. For example, an institution using zkStable might be required (by their internal policy or law) to give an auditor a view key that shows their deposits and withdrawals in the shielded pool. This way, an auditor (could even be an AI system with secure access) can verify that institution’s activity for compliance, without revealing it to the public. On ETH Chain, since transactions are public, an institution might use one address for all activity, and they could register that address with regulators under seal if needed. The idea of “optional transparency” is that honest users can opt in to being more transparent to certain authorized observers. The architecture might not enforce this (because enforcement would break privacy for all), but it provides the capability.
AI Pattern Recognition: The AI could also help ensure that zkStable isn’t used to fund illicit activity by analyzing patterns that correlate with known bad actors. For example, if a hacker exploits a DeFi protocol and obtains pUSD, they might try to redeem for ZEC and disappear. The AI might notice that the pUSD in question came from an address flagged in an exploit and could warn the zkStable contracts or admins. While the protocol itself is non-custodial, governance might decide to temporarily halt a specific redemption if overwhelming evidence suggests it’s illicit funds (this would require a rapid response ability built-in, possibly the contract can delay redemption by a few blocks to allow an AI check – but that gets into risky territory of freezing funds). More likely, the AI would be a monitoring tool for authorities to use in partnership with the zkStable team rather than an active blocker.
Compliance APIs: The architecture could include APIs or dashboards where law enforcement or exchanges can query the total supply, proof-of-reserve status, and maybe risk metrics of zkStable. Since everything is provably backed but private, regulators might worry about hidden insolvency or misuse. zkStable can address this by showing, for instance, “Current pUSD supply = X, Total ZEC reserves (in USD) = Y, Collateralization = Y/X (e.g. 200%), Last audit = just now (continuous via zkProof).” This assures regulators that the coin is solvent and not a fractional scam. As for anti-money-laundering (AML), zkStable might publish regular reports on pUSD flows in aggregate, e.g., what % of pUSD is in long-term holding vs on exchanges, number of unique addresses transacting (to show it’s not all concentrated in a few actors), etc. These don’t violate individual privacy but give a macro view.
Emergency Transparency Switch: In extreme cases, the community might vote to reveal more about the reserves if mandated by law (e.g., a court order to prove that a certain suspect’s funds are or aren’t in zkStable). Because of zk-SNARKs, zkStable could potentially generate a proof to answer a narrow question – for example, “prove that address X did not deposit more than Y ZEC” – without revealing everything. The architecture can incorporate the ability to generate specialized proofs for compliance queries. This is cutting-edge, but feasible. For instance, proving that no single deposit exceeded X (to show no mega-whale or sanctioned actor holds a majority) without revealing actual deposits.
From a technical standpoint, the AI compliance layer is largely off-chain software and organizational process interfacing with the on-chain system in read-only ways (except where governance might act on its findings). This ensures that zkStable’s base protocol remains decentralized and automated, while still providing a bridge to the traditional compliance world. The protocol architecture intentionally keeps these two aspects separate: the core system doesn’t inherently spy on users or require KYC; the compliance layer runs in parallel, analyzing publicly available data or voluntarily provided data. If an incident is detected, the response would go through governance – for example, using $PRIVACY votes to freeze a malicious actor’s assets (if that capability exists) or to cooperate with law enforcement by revealing specific info. These decisions are made by the community or the foundation, not unilaterally by a company, aligning with decentralization but acknowledging real-world legal constraints.
In conclusion, zkStable’s architecture is a sophisticated melding of blockchain smart contracts, zero-knowledge cryptography, cross-chain communication, and optional compliance tools. The result is a system where cryptographic guarantees replace the need for trust in reserves, and privacy technology replaces the need to trust intermediaries with your financial data. The next sections will discuss the economic design of the system, the role of the $PRIVACY token, and how these pieces come together to create a sustainable ecosystem.
Token Economics
zkStable operates with a dual-token model: $pUSD as the stablecoin and $PRIVACY as the governance and utility token. Each token has distinct roles and economics that ensure the protocol’s stability, incentivize participants, and enable decentralized governance.
Role and Supply of $pUSD (Stablecoin)
$pUSD is the centerpiece of the zkStable protocol – a USD-pegged stablecoin designed for broad use in payments, trading, and DeFi. Its economic properties include:
Peg Mechanism: $pUSD is soft-pegged to USD 1:1. The peg is maintained through collateralized issuance and open-market arbitrage. Unlike algorithmic stablecoins that rely on spontaneous market forces, pUSD is fully (over)collateralized by ZEC reserves proven on-chain. This means every pUSD is backed by real assets, instilling confidence in its value. Users are always incentivized to bring pUSD’s price back to $1 because they can redeem pUSD for $1 worth of ZEC if it’s undervalued, or mint new pUSD if it’s overvalued.
Supply Dynamics: The supply of pUSD is elastic and determined by user demand for loans against ZEC. When many users deposit collateral to mint pUSD, the supply expands. When they redeem or pay back pUSD (burning it), the supply contracts. There is no hard cap on pUSD supply – it can grow as large as needed, provided there is sufficient collateral. This is similar to DAI’s model, where supply can expand with demand, but always against locked collateral. zkStable does not print unbacked pUSD; thus, growth is organic and proportional to usage.
Collateralization and Stability Fees: By default, pUSD is intended to be over-collateralized. The protocol might set a minimum collateral ratio (e.g., 150% or 200%). If a user’s collateral falls below this threshold due to ZEC price movements, they are expected to either add more collateral or reduce their pUSD debt. zkStable could charge a stability fee on outstanding pUSD debt – for example, an annualized interest rate (payable in pUSD or $PRIVACY) that accrues over time. MakerDAO’s DAI uses such fees to control supply and peg. zkStable’s stability fee, if implemented, would likely be lower given the already privacy-centric hurdle of using the system, but it serves to incentivize or discourage minting to stabilize the peg. For instance, if pUSD tends to trade below $1, the community could vote to lower stability fees or even have a negative fee (reward) to encourage repaying pUSD. If pUSD is above peg, increasing the fee might dampen demand to mint and sell it.
Use Cases and Utility: As a stablecoin, pUSD’s utility is widespread:
Store of Value: For users in volatile markets or under currency inflation, pUSD offers a safe harbor without having to exit to fiat, and with far greater privacy than USDT/USDC.
Medium of Exchange: pUSD can be used for remittances, e-commerce, or peer-to-peer payments. With ETH Chain’s relatively low fees and fast finality, transferring pUSD is cheap and quick, suitable for everyday transactions.
DeFi Legos: pUSD is expected to integrate into the ETH Chain DeFi ecosystem – being listed on decentralized exchanges (like PancakeSwap), money markets (as a borrowable/lendable asset), and yield farms. Privacy-conscious DeFi users might prefer pUSD to other stables. Moreover, because pUSD is verifiably backed, platforms can trust its solvency (the proof-of-reserve offers transparency akin to other over-collateralized stables).
Bridge Asset: Eventually, pUSD could be bridged to other chains (Ethereum, etc.) if demand arises, though care must be taken not to weaken its privacy. Wrapped pUSD on Ethereum could extend its reach while still being backed by ZEC in the background.
Monetary Policy: pUSD itself doesn’t have an algorithmic monetary policy (no elastic supply changes except via collateral input). It is immune to arbitrary inflation – new units only come when someone locks equivalent value. There is also no redemption gate like USDC’s company (which might refuse redemptions); any holder can trustlessly redeem pUSD for ZEC if the system is solvent. If pUSD becomes widely adopted, the governance might consider adding other forms of collateral (e.g., other privacy coins or BTC via atomic swaps + proofs). For now, pUSD’s creation is strictly tied to ZEC deposits, keeping its monetary base directly linked to ZEC’s value.
Role, Allocation, and Utility of $PRIVACY (Governance Token)
$PRIVACY is the governance and utility token that underpins the zkStable protocol’s decentralized operation. Its design loosely parallels governance tokens like Maker’s MKR or Curve’s CRV, but with unique twists to align with zkStable’s privacy ethos and incentive model.
Roles and Utility:
Governance: $PRIVACY holders have voting rights to influence key decisions. This includes setting system parameters (collateralization ratio, fee rates, oracle selection), initiating upgrades or emergency shutdowns, and electing committees or signers if needed (for example, the multi-sig controlling ZEC reserves, if that’s how it’s structured, could be composed of reputable community members or institutions chosen by $PRIVACY votes). The governance process might follow a proposal system where any holder can propose changes (with some minimum token stake or delegate threshold), and proposals are voted on over a period (e.g., 5 days) with quorum and supermajority requirements.
Staking and Security: $PRIVACY can be staked (locked) by holders to perform certain functions or to earn rewards. One major reason to stake would be to participate in liquidation auctions or stability mechanisms. In MakerDAO, MKR is burned when the system accrues bad debt; similarly, zkStable could have $PRIVACY serve as a backstop – if ZEC collateral crashes and pUSD is undercollateralized, the protocol could mint new $PRIVACY and auction it for ZEC/pUSD to raise funds (diluting $PRIVACY holders, which incentivizes them to keep risk parameters in check). Conversely, surplus fees or collateral might be used to buy back and burn $PRIVACY, making it deflationary in good times (this model has made MKR deflationary whenever stability fees are high and system is profitable). Stakers might also serve as oracles or validators – for example, $PRIVACY holders could stake and run nodes that feed Zcash state updates or price data, earning fees for honest work (and slashed if dishonest).
Fee Sharing and Incentives: To encourage long-term holding and participation, $PRIVACY stakers could earn a portion of the system’s revenues. This might include:
A cut of the stability fees paid by pUSD borrowers.
A portion of minting/redemption fees.
Penalties from liquidations. These earnings would accrue to stakers in either pUSD or possibly in ZEC (if the system collects ZEC fees) or could even be distributed as buyback-and-burn of $PRIVACY (increasing each holder’s share by reducing supply). The exact model can be decided via governance; many DeFi protocols direct fees to governance token holders to bootstrap token demand and align interests.
Utility in Privacy/Compliance: $PRIVACY might have a utility beyond just governance – e.g., users might need to pay fees in $PRIVACY for certain advanced features. If an institution wants an audit report or a custom compliance proof from the protocol, they might pay in $PRIVACY to the DAO for that service. Or perhaps if a user wants to expedite their transactions through a special relayer network, they might stake some $PRIVACY as collateral. These are speculative uses, but the token’s name suggests it’s central to the privacy aspect – possibly indicating that $PRIVACY could be used to vote on privacy parameters or fund privacy research, etc.
Token Supply and Allocation:
The supply of $PRIVACY is typically fixed or capped to give it scarcity value (like 100 million tokens) or it could be mildly inflationary if needed for rewards. Let’s assume a fixed cap scenario for illustration:
Initial Supply: Suppose 100 million $PRIVACY tokens.
Allocation: Distribution could be:
20% to founding team and early contributors (with multi-year vesting to ensure long-term commitment).
20% reserved for strategic investors or partners (possibly those who provide initial liquidity or OTC deals, also likely vested).
10% allocated in a public sale or IDO (initial decentralized offering) to bootstrap community ownership.
30% set aside as ecosystem & mining rewards – this is for incentivizing early adopters. For example, yield farming programs might reward users who mint pUSD or provide liquidity for pUSD on DEXes with $PRIVACY tokens. Also, users who stake as validators for oracles could be paid in freshly emitted $PRIVACY. This allocation would effectively be an inflationary release over, say, 5 years.
15% to a Treasury governed by the DAO for future use (partnerships, marketing, bug bounties, further development).
5% for advisors and community grants.
These numbers are hypothetical, but the goal is a fair distribution that balances the need to fund development with creating a wide community of token holders who will govern the system.
Value Proposition for $PRIVACY Holders:
$PRIVACY holders shoulder the responsibility of governance, and in return, they benefit from the growth of the zkStable network. As pUSD adoption increases, more fees are generated, which flow to $PRIVACY (either directly or via token burns increasing each holder’s relative share). Additionally, $PRIVACY’s market value should, in theory, reflect the health and usage of the zkStable system – if many people use pUSD and trust zkStable, they may want $PRIVACY to have a say in its governance, boosting demand.
Conversely, if the system mismanages (like a collateral failure or regulatory crackdown), $PRIVACY would likely lose value. This creates a strong incentive for $PRIVACY holders to act prudently, maintain over-collateralization, and comply with necessary laws to ensure longevity (because reckless governance decisions that, say, drop collateral ratio too low could cause a crash and directly hurt $PRIVACY’s value by triggering emergency minting of $PRIVACY to cover bad debt, diluting holders).
Deflationary and Inflationary Mechanics:
Deflationary: zkStable can implement buy-and-burn schemes. For example, stability fees accumulated in pUSD could be used to purchase $PRIVACY on the open market and destroy it, reducing total supply. This mimics how MakerDAO uses stability fees to buy MKR and burn it, when there is surplus. Also, any time a liquidation occurs where $PRIVACY is auctioned, it effectively transfers value from $PRIVACY to cover debt (dilution) but after that event, returning to normal, one can aim to buy back the extra $PRIVACY later.
Inflationary: In early years, to incentivize adoption, $PRIVACY might have scheduled inflation (from that 30% ecosystem pool or beyond) – e.g., an emission of 5% per year that is distributed as liquidity mining rewards. This encourages people to bootstrap pUSD liquidity and collateral. Over time, emissions can taper (just as Bitcoin or other crypto have halving, etc.). The community will likely vote on these schedules.
In essence, $PRIVACY’s economic design is to align the stakeholders (token holders) with the stability and success of pUSD. $PRIVACY acts as the governance brain and risk-bearer of the system, whereas pUSD is the utility workhorse that people actually use as money. By holding and staking $PRIVACY, community members commit to guiding the system and are rewarded when it prospers.
Privacy and Compliance
Balancing privacy with legal and regulatory compliance is one of zkStable’s core challenges (and differentiators). This section explains how zkStable provides end-to-end privacy for users, while also incorporating features for selective transparency and discussing the regulatory considerations of such a system.
End-to-End Privacy from Deposit to Redemption
zkStable is built to offer a level of financial privacy comparable to cash or privacy coins, across the entire lifecycle of the stablecoin:
Anonymous Collateral: As detailed earlier, collateral deposits happen in Zcash’s shielded pool, meaning the origin, destination, and amount of each deposit are hidden. The reserves that back pUSD are thus held in a privacy-preserving manner. Even though the ETH Chain contract knows the total ZEC backing (in USD terms), it doesn’t know the breakdown of which addresses contributed which portion. This ensures that collateral providers (minters of pUSD) remain anonymous. In contrast, in systems like MakerDAO, the collateral (ETH) and debt are tied to a vault address openly visible; anyone can see when a big vault mints DAI and might infer who that is. zkStable reveals no such info.
zkStablenymous Transactions on ETH: Once pUSD is minted, as an EVM token it is zkStablenymous – addresses are long hexadecimal strings not directly linked to real identities. However, it’s important to note that zkStablenymity is a weaker form of privacy; addresses can be clustered and identified through analysis if a user isn’t careful. zkStable’s design doesn’t inherently hide pUSD transfer details on ETH Chain. Users can enhance their privacy by using separate addresses for separate activities, avoiding address reuse (which is a common privacy pitfall on Ethereum), and possibly by leveraging mixing services. For example, a user could swap pUSD through a DEX or a series of wallets to obfuscate the trail.
Shielded Redemption: When a user redeems pUSD for ZEC, they ideally receive the ZEC in a shielded address on Zcash. This means the “off-ramp” returns them to a fully private environment. If Alice held pUSD and wants to exit, she could burn her pUSD and get ZEC into a brand-new Zcash shielded address that has no history – from there, she could do anything (hold it, spend it) and it’s unlinkable to her pUSD usage. This round-trip (ZEC -> pUSD -> ZEC) can be made entirely anonymous, akin to entering a privacy tunnel and coming out the other end with the same value, cleansed of any observable link to the start.
Confidential Data Storage: zkStable could leverage advanced cryptography to even hide certain info on ETH Chain if needed. For instance, future versions might allow confidential transactions for pUSD (similar to Monero’s Confidential Transactions or Zcash’s sapling for tokens). While ETH Chain itself doesn’t support that yet, one could imagine a layer-2 or sidechain where pUSD can be moved with full encryption of amounts. In fact, projects like Aztec on Ethereum have pioneered zkSNARK-based confidential transactions for tokens (e.g., zkDAI). zkStable could adopt or inspire a zk-pUSD transfer system, wherein users have the option to shield their pUSD transfers. This would bring privacy to the usage of pUSD, not just its collateral. Until such a solution is integrated, pUSD users still enjoy privacy on the collateral side and can use best practices to make linking transactions harder.
Financial Fungibility: Privacy in zkStable also ensures fungibility. All pUSD units are interchangeable and none carries history that might taint it (unlike a Bitcoin UTXO that might be “tainted” by having once been stolen, etc.). With pUSD, since the collateral is pooled and anonymized, there is no notion of “this pUSD came from criminal source, that pUSD came from clean source” – you cannot trace pUSD to a specific deposit. This fungibility is important: it prevents discrimination or blacklisting of certain pUSD tokens. In the case of USDC or USDT, certain tokens at certain addresses can be blacklisted, effectively making them unspendable. With zkStable’s decentralized design, there’s no built-in way to blacklist a specific pUSD token without blacklisting the holder’s address entirely (which itself is against the spirit unless via governance in extreme cases).
It’s worth highlighting how zkStable’s privacy addresses real-world needs. Consider humanitarian use-cases: activists or NGOs operating under authoritarian regimes often need financial support that cannot be easily surveilled or cut off. Traditional stablecoins like USDT or USDC are trivially traced, and addresses can be frozen, so they are not safe in such scenarios. zkStable allows these users to receive and spend stable value covertly. They could receive pUSD donations to a fresh ETH address that no one ties to them, convert to ZEC and fully hide if needed, or directly spend pUSD if local merchants accept it – all without a public spotlight on their finances.
Another scenario is a business that wants to use DeFi or crypto payments but is concerned about revealing competitive information (like their supplier list or salary payouts on a public ledger). With pUSD, they could manage treasury in stablecoins and pay partners in pUSD, and later partners can privately redeem to ZEC or keep the value in crypto, without each payment being traceable by competitors.
Selective Auditability and Optional Transparency
While zkStable prioritizes privacy, it also recognizes that certain situations call for transparency. The protocol thus supports voluntary transparency features:
Viewing Keys for Disclosure: As mentioned, Zcash allows users to share a viewing key to reveal all transactions related to their address. zkStable users who are subject to audits (e.g., a regulated financial institution using pUSD) can provide an auditor or regulator with a viewing key that reveals their deposits in the shielded pool. This would allow an auditor to see, “Entity A deposited 1000 ZEC on this date and later withdrew these amounts,” verifying that Entity A’s use of zkStable matches their reports. Importantly, this does not expose other users’ data – the auditor sees only what that entity did. The ETH chain part (pUSD movements) is public, but if an entity kept their pUSD activity separate, they could similarly prove ownership of certain addresses. In essence, compliant users can choose to de-anonymize themselves partially to satisfy requirements, while others who don’t need to remain fully private can do so. The protocol itself does not force this; it’s an option.
Whitelist Mode (for institutions): zkStable could offer a special mode or side-handshake where certain whitelisted addresses only accept pUSD that’s flagged as compliant. For example, an exchange might require that any pUSD coming in be traceable to a known KYC’d user. While zkStable by default can’t enforce that (it’s decentralized), a business can implement that off-chain. They could integrate with zkStable’s API to ask a user, “provide proof that your pUSD came from a KYC’ed deposit.” zkStable could facilitate this by offering a zero-knowledge proof of identity, not something trivial but conceptually: a user might link their deposit to a digital identity certificate in zero-knowledge. This is speculative, but projects like ZK-KYC are exploring proving you’re not a blacklisted person without revealing which person you are. If zkStable embraced such tech, it would be cutting-edge compliance: e.g., prove that “I am from country X and not on sanctions list Y” in zero-knowledge to an exchange when depositing pUSD. This would satisfy the exchange’s legal needs without publicly doxxing the user or linking back to their transactions.
Protocol Audits and Reserve Transparency: At the protocol level, while individual actions are private, the overall system is transparent through cryptography. The community or external auditors can examine the smart contracts, the proofs, and the reserve tracking to ensure everything is consistent (e.g., verifying that the total minted pUSD equals total proved collateral after factoring collateral ratio). Additionally, zkStable’s code could periodically produce public proofs of solvency – for instance, a weekly proof that “the system is overcollateralized by at least X%” or “total ZEC reserve = Y, total pUSD = Z.” Even though details are private, these summary statistics can reassure everyone that there’s no hidden insolvency or exploit. This concept is akin to publishing Merkle tree summaries that exchanges do for proof-of-reserves, but here done with zk-proofs so that even those summaries don’t reveal user contributions.
Emergency Information Release: In extreme scenarios, such as a legal mandate or a critical investigation (e.g., tracing funds of a terrorism financing case), the zkStable governance might choose to cooperate by providing relevant info. This could involve using admin keys or special circuits to extract data. For example, the DAO could vote to disclose details of a particular deposit if served with a lawful order (assuming they even can – if keys are split among many, it would require majority agreement). They might reveal “Address X on ETH Chain is linked to a deposit from Exchange Y on Zcash made on date Z,” etc. This is obviously something the community would do only with heavy heart and due process, as it breaks privacy for that case. The goal is to show that zkStable is not inherently a tool for criminals – it has capabilities for pinpoint transparency when truly necessary, while making dragnet surveillance impossible.
This selective transparency ideally mirrors how banking works today: your bank knows your transactions (and can report suspicious ones), but the general public cannot see them. zkStable attempts to replicate this in DeFi – the public and adversaries can’t spy on you, but if you choose or are compelled legally to open up to a regulator, you can.
Legal and Regulatory Considerations
Operating a privacy-focused stablecoin touches on several regulatory areas:
Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT): Regulators worry that privacy coins can be used to launder money or evade sanctions. zkStable, being a stablecoin, will draw even more attention because stablecoins are often under scrutiny for these issues (witness how regulators have pressed Tether/USDC on illicit use). zkStable’s approach to AML is to build in the above-mentioned compliance options. For example, the protocol can adopt FATF’s guidance on “Travel Rule” compliance for VASPs by enabling institution-friendly features. At a base layer, zkStable itself is just software – decentralized and not KYCing anyone. However, interfaces (like an exchange offering pUSD or a dApp) might implement KYC. The existence of an AI compliance monitor means the community can proactively identify and freeze clearly illicit behavior if it ever arises (with governance, freeze might mean refusing a redemption or alerting authorities).
Securities and Money Transmission: There is a question whether $PRIVACY or pUSD could be seen as securities. $PRIVACY is a governance token that could gain in value – one might argue it passes the Howey test (people buy expecting profit from others’ effort). Many governance tokens tread this line. zkStable can mitigate this by decentralizing from day one (no central issuer guaranteeing profits) and highlighting the utility aspects (governance, staking, etc.). pUSD itself should not be a security – it’s a stable value token, more akin to a digital dollar or a payment instrument. However, regulators might classify it as “stored value” or even as a form of e-money. The zkStable project might have to engage with financial regulators, possibly seeking a registration or exemption if needed in major jurisdictions. Alternatively, by being purely decentralized with no company controlling it, zkStable might follow the path of Bitcoin or DAI, which regulators have not banned but are watching. Decentralization is a defense – there’s no one to haul into court easily. But governance token holders could theoretically be targeted (as in some cases where regulators have hinted DAO participants might bear responsibility). zkStable’s legal strategy likely involves setting up a foundation or legal wrapper to interface with regulators, while emphasizing the community-driven nature.
Regulatory Jurisdiction: zkStable’s operations span globally. The ETH Chain is global, Zcash is global. zkStable’s team or foundation might be wise to base in a jurisdiction friendly to crypto and privacy (perhaps Switzerland, which has crypto-friendly laws and respects financial privacy traditions, or certain APAC regions). Engaging with regulators early can prevent surprises. The mention from the Zcash forum that “Circle refused Zcash shielded USDC due to freeze inability” highlights how important regulator buy-in is. zkStable might approach regulators with the narrative: “We are creating a compliant privacy stablecoin that can offer privacy and oversight through novel cryptography, aligning with even central bank interests in privacy-protected digital cashf” Indeed, even central banks have stated that privacy is a feature they seek in digital currencies if it can be balanced with identity verification. zkStable could be seen as a pioneer implementing that balance in the private sector.
Legal Status of Privacy Tech: Some countries have banned or restricted privacy coins (e.g., Japan delisted Monero/Zcash, and EU proposals have considered outlawing anonymous crypto transactions above certain thresholds). zkStable might face similar restrictions. If pUSD gains traction and some jurisdiction says “no anonymous stablecoins allowed,” zkStable’s decentralized nature means it can’t outright stop operation in that country, but adoption could suffer. The project might need to geofence its official front-end from such jurisdictions or include risk disclosures.
Tax and Accounting: Users using pUSD need to consider tax implications. If someone goes from ZEC to pUSD and back, they have potentially made trades that could be taxable events (ZEC to pUSD could be selling crypto for stablecoin, e.g., a disposition). But since this is all user-driven, zkStable itself isn’t handling taxes. However, providing tools (like transaction histories to those who want via viewing keys) can help users comply with tax laws voluntarily.
In conclusion, zkStable’s stance on privacy and compliance is to empower the user with privacy by default, but provide tools for transparency when legitimately needed. This “have your cake and eat it too” approach is made possible by zero-knowledge proofs and thoughtful system design. The goal is to legitimize privacy-enhanced finance: proving that you can have a currency that doesn’t broadcast everyone’s activity to the world, yet isn’t a black box for criminals either. If successful, zkStable could set a precedent influencing even central bank digital currencies (CBDCs) or other stablecoins to incorporate privacy features.
Next, we outline the development roadmap for turning this vision into reality, followed by potential use cases and user personas that zkStable will serve.
Roadmap
Building zkStable requires coordinated progress across cryptography, protocol engineering, compliance infrastructure, and community growth. Development is structured into phased milestones to ensure security, regulatory alignment, and progressive decentralization.
Q4 2025 — Phase 0: Research & Foundation Setup
Whitepaper Completion
Finalize full technical and economic architecture. Gather peer review + community input. ✅
Regulatory & Legal Strategy
Form zkStable Foundation; establish legal structure aligned with privacy-focused compliance models.
Core Contributor Onboarding
Finalize the founding engineering team + external cryptography advisors.
Protocol Design Freeze
Lock core design decisions for proof systems, bridging logic, and governance parameters.
Outcome: Clear conceptual foundation and aligned organizational structure.
Q1 2026 — Phase 1: Prototype Development
ZK Circuit Prototyping
Implement circuits proving Zcash shielded-note reserves + nullifier validation. Validate via local Zcash testnet + EVM dev network.
Smart Contract MVP
Deploy core ETH-Layer contracts: pUSD, Vault, Oracle feed, Governance scaffolding.
Internal Cross-Chain Trials
Simulate end-to-end mint → redeem flow using testnet ZEC and ETH testnet pUSD.
Test Harness + Debugging
Validate oracle updates, proof validity propagation, revert handling, and error cases.
Outcome: Working cross-chain proof → mint → redeem prototype under controlled testing.
Q2 2026 — Phase 2: Public Testnet (Alpha)
Public Testnet Launch
Deploy zkStable to public ETH + Zcash testnets. Distribute testnet-$PRIVACY to early testers.
Audits & Security Testing
Run full contract + ZK circuit audits. Launch bug bounty for white-hat vulnerability discovery.
User Interface / Wallet Integration
Release web UI + CLI + wallet tooling for shielded + EVM interactions.
Community Growth Programs
Reward early testers with point-based incentives (convertible to mainnet token allocation).
Outcome: Real users, real feedback, real security validation before mainnet.
Q3 2026 — Phase 3: Mainnet Launch (MVP)
Mainnet Genesis
Deploy Vault, Verifier Bridge, pUSD stablecoin smart contracts live.
Collateral Controls
Conservative caps + risk parameters applied to early minting to ensure peg reliability.
$PRIVACY Token Launch
Execute TGE, enable governance participation, and establish initial liquidity pools.
Liquidity Bootstrapping
Deploy pUSD pools on PancakeSwap + incentivize initial LPs with $PRIVACY emissions.
Progressive Governance Onboarding
Governance live but initially safety-guarded via emergency unlock multisig + timelocks.
Outcome: zkStable becomes a usable privacy-preserving stablecoin with measured liquidity growth.
Q4 2026 — Phase 4: Privacy & Compliance Maturity
AI-Assisted Compliance Layer
Deploy optional monitoring + anomaly-detection dashboards. Gradually tune models with live data.
Selective Transparency Tools
Introduce viewing keys, attestation proofs, institution-friendly audit export features.
Shielded pUSD Transfers (Optional)
Begin research + trials for Aztec-style shielded transfer support or partner L2 privacy layer.
Governance Decentralization Steps
Expand trusted multisig to community council + begin timelock introduction on parameter changes.
Outcome: Usability + regulatory adaptability without compromising user privacy.
2027 — Phase 5: Ecosystem Expansion
Multi-Collateral Support
Evaluate adding BTC-based or other privacy-asset collateral types (subject to governance approval).
Cross-Chain Deployment
Expand pUSD via canonical bridges + wrapped pUSD for use on ETH DeFi and L2s.
Payments & Fintech Integrations
Work with remittance apps, merchant settlements, privacy-focused fintech rails.
Performance Optimization
Improve proof generation efficiency, batching, and gas cost reductions.
DAO Control Transition
Phase out founder multisigs → move control to governance + community risk council.
Beyond 2027 — Vision
zkStable evolves into a globally adopted network of privacy-preserving stable assets, potentially supporting multiple currencies (pUSD, pEUR, pJPY, etc.) while maintaining trustless zk-based proof-of-reserve guarantees.
Use Cases and User Personas
zkStable’s unique features – privacy, stability, and decentralization – make it attractive to a variety of users across the crypto and traditional finance spectrum. Here we outline several key use cases and archetypal user personas who would benefit from zkStable:
1. DeFi Power User (Crypto Trader / Yield Farmer)
Persona: Alice is an experienced DeFi user active on multiple blockchains. She frequently moves assets between protocols to chase yield, arbitrage price differences, or manage risk. However, she’s concerned about the transparency of her activities – whenever she makes a big trade or deposit, others can see and sometimes copy or front-run her strategies (the “whale watching” problem). Alice values her alpha (information edge) and privacy.
Use Case: Alice uses $pUSD as her preferred stablecoin when rotating between investments. Suppose she exits a volatile position to stablecoins; instead of using USDC or DAI (which are traceable to her addresses known to others), she mints pUSD with zkStable. With pUSD, she can move into a yield farm on ETH Chain without everyone seeing the source of her funds. If she’s arbitraging between DEXs, using pUSD means her large trades are less predictable (since her stablecoin balance buildup wasn’t visible). Moreover, if she wants to secretly build a position in a new token, she can do so by first withdrawing her assets into Zcash via zkStable, then coming back to DeFi with fresh addresses that have no prior history linked to her.
Benefit: By using zkStable, Alice maintains trading confidentiality. Competitors and on-chain analysis bots cannot easily link her moves together. She also has confidence in pUSD’s peg and redeemability, so she isn’t sacrificing stability for privacy. Additionally, zkStable’s over-collateralization appeals to her risk management – she knows the stablecoin is reliably backed (unlike pure algorithmic coins that she would avoid post-Terra).
2. Institutional Trader or Hedge Fund
Persona: Beta Capital is a crypto hedge fund that trades large volumes. They custody assets on behalf of clients and frequently use stablecoins to park capital between positions or to avoid fiat banking latency. However, they dislike how using stablecoins like USDC broadcasts their activities (e.g., large movements in/out of exchanges can signal their strategy). They also have confidentiality obligations to clients.
Use Case: Beta Capital integrates with zkStable so that when they want to exit a position into dollars, they mint pUSD and hold that instead of USDC. They keep their pUSD in a fresh corporate wallet that isn’t publicly tied to them, reducing the visibility of their treasury. When executing OTC deals or moving funds to exchanges, they use pUSD to obscure their tracks. Internally, they leverage zkStable’s optional transparency: they maintain detailed records of their zkStable usage and could provide auditors with viewing keys to show that all their pUSD is fully backed and legitimate.
Benefit: Beta Capital achieves operational security (OpSec). Their large transfers aren’t immediately apparent on-chain as belonging to them. This helps prevent other market participants from riding their coattails or sparking speculation (“Beta Capital is moving $50M to exchange X, are they going to buy something?” – that speculation can move markets). They still meet compliance needs by voluntarily disclosing necessary info to auditors/regulators in private, using zkStable’s tools, thus staying on the right side of the law while enjoying privacy.
3. Privacy-Conscious Individual (Financial Privacy Advocate)
Persona: Carlos is a cryptocurrency user in a country with strict capital controls and a track record of government surveillance. He values personal privacy highly—he might have modest wealth, but he believes it’s no one’s business how he spends or saves his money. He uses privacy coins like Zcash for some savings, but he also needs a stable store of value because his local currency is inflating.
Use Case: Carlos uses $pUSD as a private savings account and payment method. He acquires ZEC (perhaps via mining or peer-to-peer) and deposits it into zkStable, minting pUSD. Now he holds an asset pegged to USD, protecting him from local currency inflation, and he can store it without fear of theft or seizure because it’s in a shielded form (the authorities can’t easily prove he has this money). When Carlos wants to pay an online merchant or send money to a family member abroad, he can send pUSD. The recipient, if they also value privacy, might keep it in pUSD or redeem to ZEC themselves.
Benefit: Carlos gets financial freedom and security. He can save in dollars without a bank, without his government knowing, and without using centralized stablecoins that might block him (for example, if his country is sanctioned, using USDC could be risky – Circle could freeze assets belonging to people in sanctioned regions). zkStable doesn’t discriminate. Also, if someone were to look at the blockchain, they wouldn’t easily see Carlos’s balances or transfers. This reduces his target profile for crime as well (kidnappers or hackers can’t identify he has significant assets).
4. Decentralized Autonomous Organization (DAO) Treasury
Persona: XYZ DAO manages a community treasury of funds that it uses to pay contributors and invest in the ecosystem. The treasury is public and currently held mostly in DAI and ETH. However, the DAO community has raised concerns that this total transparency is a double-edged sword: vendors see exactly when the DAO receives funds or what it’s paying everyone, potentially weakening the DAO’s negotiating position. Also, proposals to diversify into fiat stables (like USDC) face resistance due to centralization and blacklist risks.
Use Case: XYZ DAO decides to allocate a portion of its treasury to $pUSD. They deposit some of their ETH holdings into zkStable (assuming multi-collateral support, or they swap ETH for ZEC for this purpose) and mint pUSD. Now, when they pay grants or invoices, they use pUSD streams. The recipients can cash out privately. The DAO also keeps some pUSD as a hedge against crypto volatility in a private form. If their financial activities are less traceable, the DAO gains a bit of strategic ambiguity (e.g., a contractor getting paid in pUSD – outsiders don’t see that payment on Ethereum directly; they’d have to track cross-chain which is harder).
Benefit: The DAO improves treasury privacy and censorship-resistance. Holding pUSD means their stable asset isn’t subject to being frozen (unlike, say, holding USDC, which could freeze under regulator pressure, which is a real risk noted in the community). They also shield some of their operations: while ultimate accountability is kept (they can always prove to members they spent X amount in pUSD via internal reporting), they’re not broadcasting every financial move to competitors or speculators. This could be crucial if the DAO is engaged in sensitive endeavors (e.g., funding activists, or accumulating assets without front-run).
5. E-commerce Merchant or Freelancer
Persona: Dina runs a small e-commerce business selling crafts online, and she also does freelance graphic design. She has customers globally. She started accepting cryptocurrency payments to save on fees and get faster access to funds. However, when she gave out a public wallet for payments in USDT/ETH, she realized anyone could see her sales volume and income (just by looking at her address receipts on a block explorer). She finds that unsettling as it’s akin to publishing her bank statements.
Use Case: Dina switches to using zkStable for crypto payments. She provides a pUSD payment address (a ETH Chain address) to clients. When a client wants to pay, they can acquire pUSD (perhaps via an exchange or the zkStable system itself) and send to her. Because her receive address for pUSD is not linked to her personal identity publicly, and the amounts are shielded on the Zcash side, it’s much harder for someone to snoop on her earnings. She can periodically redeem pUSD to ZEC and then to local currency as needed (or spend the ZEC on expenses, maybe via a crypto debit card). If she’s selling to privacy-conscious customers, they also appreciate being able to pay with something that doesn’t leave a record of what they bought in a public ledger (unlike paying with, say, a stablecoin on Ethereum that could be traced to their account).
Benefit: Dina achieves business privacy and financial autonomy. Her crypto revenues are not exposed to competitors or strangers, protecting her privacy and possibly even her negotiating leverage (clients don’t need to know how much she made from others). Furthermore, using pUSD spares her from fiat conversion fees until she chooses, and she retains control of her funds (no bank that can freeze her, no chargebacks). It’s like being paid in digital cash – private and final. She still can report her income to authorities for tax purposes, but she’s in control of that information, not the entire world via a public chain.
6. Haven/XMR Community Member (Privacy Coin Enthusiast)
Persona: Eli is a member of the Haven Protocol community and also holds Monero. He strongly believes in privacy coins. Haven’s xUSD attracted him because of its privacy, but he is wary after seeing volatility in XHV and the complexities of the algorithmic model. He’s looking for other private stable stores of value.
Use Case: Eli starts using zkStable as an alternative or alongside xUSD. He likes that zkStable is collateralized by an asset (ZEC) that is not entirely endogenous (ZEC exists outside the system, unlike XHV which is tightly coupled). He moves some of his funds from Haven to zkStable by converting XHV to another asset, then to ZEC, and depositing to mint pUSD. In the Monero community, members often use XMR for everyday privacy, but XMR is volatile; now Eli can convert some XMR to pUSD (through XMR->ZEC->pUSD route, perhaps facilitated by a service or atomic swap) to hold value stable while still staying in the privacy realm. He might evangelize pUSD in those circles as “the Zcash-backed private stablecoin,” which complements Monero usage.
Benefit: Eli gains a diversified privacy portfolio. He doesn’t have to trust one protocol or one mechanism alone. If Haven is performing poorly or Monero’s price swings, he has pUSD as a stable haven that still respects his privacy. For transactions where stability is needed (paying a long-term contract, saving for an upcoming purchase), he’ll use pUSD instead of fully private but volatile coins. It broadens the options for privacy coin users. For communities like Monero that lack a native stablecoin, zkStable could become their go-to stable value: they convert in and out while retaining privacy through Zcash’s bridge.
Across these personas, a common theme is that privacy is empowering. Whether it’s protecting trade secrets, personal safety, or simply the dignity of not exposing one’s financial life, zkStable’s use cases all leverage the idea that a stablecoin can be as private as cash. And unlike cash, pUSD doesn’t degrade or require physical handling, it moves at the speed of crypto. At the same time, none of these users have to sacrifice trust or reliability – they know pUSD is backed by real value (ZEC) and governed by a community, not a single corporation that could freeze funds or a fragile algorithm. This combination of privacy, trust, and utility opens up new possibilities that neither traditional stablecoins nor traditional privacy coins alone could offer.
Comparison to Other Stablecoin Models
To appreciate zkStable’s design choices, it’s helpful to compare and contrast it with existing stablecoin models. We consider three reference points: MakerDAO’s DAI (crypto-backed and decentralized but transparent), centralized fiat-backed coins like USDC, and Haven’s xUSD (privacy-focused algorithmic stablecoin). Each model highlights different trade-offs in the stablecoin trilemma and privacy.
The stablecoin landscape can be summarized by how projects prioritize decentralization vs. stability vs. efficiency, and how they handle privacy and compliance. The table below provides a side-by-side comparison:Decentralization vs. Trust: zkStable and MakerDAO are both decentralized in that no single entity unilaterally controls issuance or reserves. zkStable uses a crypto reserve (ZEC) rather than bank money, avoiding any single point of failure like a bank freezing assets. MakerDAO similarly avoids fiat backing (though ironically it has incorporated USDC which adds centralization). USDC, by contrast, is fully centralized – its model sacrifices decentralization entirely for the sake of simplicity and stability. Haven sits at the decentralized end, even removing external collateral, but at the cost of having to trust that the algorithm (and market participants) will maintain value.
Price Stability: USDC is extremely stable to $1 (every coin is redeemable for $1 and is fully backed by actual dollars). DAI has been historically stable, though it has seen deviations during extreme market events (e.g., March 2020 crash) and relies on mechanisms like emergency shutdown to backstop stability. zkStable’s pUSD should also be very stable if properly managed – being fully collateralized and arbitrageable with a clear redemption path ensures that market price should hover at $1. One caveat: zkStable depends on ZEC’s price feed and liquidity; rapid ZEC price swings could put momentary pressure on pUSD if the system doesn’t liquidate underwater positions quickly. But because pUSD can always be redeemed for ZEC, as long as ZEC markets exist, pUSD’s value holds. Haven’s xUSD has kept peg well at times (using moving average to throttle conversion), but if XHV were to freefall or if trust erodes, xUSD could lose its peg because the backing (XHV) can shrink drastically and there’s no hard collateral in reserve.
Privacy: This is where zkStable and Haven shine in contrast to the others. DAI and USDC offer essentially no transactional privacy; users must add external solutions (mixers, etc.) if they want anonymity. zkStable builds privacy in at the base layer for collateral and leverages existing privacy tech for transactions, a unique approach among stablecoins. Haven’s approach bakes privacy into every transaction via its Monero-based blockchain, which is arguably even more seamless for privacy (no separate chain bridging needed for privacy – everything is simply private by default). The downside for Haven is that being on its own chain with a custom algorithmic system has made it less interoperable and arguably more fragile economically. zkStable chooses to integrate privacy into a widely-used chain (ETH) by bridging from a privacy coin (Zcash), perhaps hitting a sweet spot of privacy + interoperability.
Compliance and Blacklisting: USDC is often criticized in decentralized circles for its blacklisting capability, but that very capability is what regulators appreciate – they can enforce sanctions, etc. DAI, with no blacklist, is more censorship-resistant but has gradually entangled with regulated collateral (USDC) to maintain stability. zkStable aims to remain censorship-resistant (no routine freeze function), aligning with decentralization ideals. However, it’s worth noting: if pressured, zkStable’s DAO could theoretically comply by disabling certain addresses, but it would be a community decision, not a single company’s. Haven cannot comply at all – it’s fully anonymous and thus likely to remain an outlaw in jurisdictions unfriendly to privacy tech.
Economic Risks: Each model has distinct risks:
zkStable: Smart contract and cross-chain risks (a bug in the proof verification or a flaw in Zcash’s cryptography could be exploited). Collateral volatility risk: a crash in ZEC could challenge the system, though over-collateralization and active governance (like raising fees or stopping minting) can mitigate this. There’s also reliance on Zcash as a network – any issues in Zcash (like a chain halt or major inflation bug) could indirectly affect zkStable reserves.
MakerDAO (DAI): Smart contract risk as well (Maker had an incident on Black Thursday where auctions failed temporarily, leading to shortfall). Also, DAI now has centralization creep (over 50% collateral is USDC at times, meaning if USDC were frozen by regulators, DAI would be in trouble). And governance risk – MKR holders must act prudently; they are the lender of last resort.
USDC: Centralization risk – users must trust Circle and its banking partners. There’s also regulatory risk: if, say, USDC’s reserves were seized or their banking access cut (not likely for a regulated entity, but not impossible), USDC could break its peg. Users also face personal risk: if their address is deemed suspicious, their funds can be frozen without their control.
Haven (xUSD): Peg stability risk – xUSD’s model depends on XHV’s market cap being healthy. If confidence in Haven falls, XHV price could plummet and xUSD could become undercollateralized. It’s somewhat similar to Terra’s UST-LUNA mechanism (though Haven did implement throttles like the 24h moving average to avoid death spirals). Haven also had an incident where a minting exploit inflated XHV, causing issues. So technical and economic robustness is a concern.
In summary, zkStable’s key differentiator is that it marries the trust-minimized backing of crypto collateral (like DAI) with robust privacy (like Haven). It intentionally gives up some capital efficiency (needing >100% collateral, whereas USDC is exactly 100%) in order to be decentralized and trustless. But unlike pure algorithms, it doesn’t push efficiency to the point of fragility – it keeps real collateral. zkStable can be seen as a “privacy-enhanced MakerDAO on cross-chain rails,” delivering something novel in the stablecoin space.
This comparison also underscores that zkStable doesn’t compete on certain fronts: it won’t be as capital-efficient as USDC or as simple to understand (someone can easily grasp “$1 in a bank = 1 coin” vs. “lock ZEC, get pUSD via zkProof”). However, it offers things none of the others do in combination: anonymity with assurance.
For users and investors comparing options, zkStable might appeal as follows: If you refuse to use centralized stablecoins due to censorship risk but need a reliable peg, and if you also care about not leaving a data trail, then zkStable stands out. It’s carving a niche perhaps slightly adjacent to the mainstream DeFi user (who might be fine with USDC/DAI) but increasingly important as privacy awareness grows.
Risks and Limitations
No financial system is without risks, especially one that is breaking new ground with cross-chain technology and privacy. It’s crucial to acknowledge these risks and the limits of zkStable’s design:
1. Collateral Volatility and Under-Collateralization: zkStable’s stability hinges on the value of ZEC collateral. ZEC is a volatile asset; a sharp decline in ZEC’s price could erode the collateral backing pUSD. If ZEC price dropped faster than the system could react (for example, a 50% crash in hours), some pUSD might suddenly become under-collateralized. Unlike MakerDAO, which has an on-chain liquidation mechanism to sell collateral for DAI when thresholds are breached, zkStable’s cross-chain setup makes automatic liquidation challenging. Mitigations: High initial collateralization requirements (e.g., 200%) provide a buffer. The zkStable DAO can pause new minting or even pause redemptions temporarily if a black-swan event occurs (though pausing redemption would break the arbitrage peg, it might be necessary to prevent a run until things stabilize). There could also be a mechanism where if collateral falls below a certain point, $PRIVACY tokens are minted and sold to raise more collateral (diluting governance token holders similar to MKR in MakerDAO’s global settlement). Ultimately, users must understand there is a systemic risk: extremely rapid ZEC crashes or long bear markets could test zkStable’s solvency. Proper governance and maybe even an insurance fund (accumulated from fees) would be needed to manage this.
2. Smart Contract and Protocol Bugs: The complexity of zkStable’s smart contracts and zk-SNARK circuits opens room for bugs:
A flaw in the smart contract could be catastrophic (e.g., a bug that allows someone to mint pUSD without proper proof, essentially counterfeiting pUSD, or to withdraw ZEC without burning pUSD).
A vulnerability in the zk-SNARK circuit or its implementation might allow an attacker to generate a false proof that convinces the contract that collateral exists when it doesn’t, or that they burned pUSD when they didn’t. This could lead to unbacked pUSD being issued.
Cross-chain logic (like oracle updates or multi-sig management of ZEC) might be exploited (e.g., if the oracle feeds a fake Zcash root or price). Mitigations: Rigorous auditing is a must. zkStable will undergo multiple independent security audits of both contracts and circuits. Using well-established libraries for zk verification and time-tested curves (Zcash’s circuits have been live for years and Halo2 is open-source audited) reduces risk. Still, zero-knowledge tech is cutting-edge; even Binance’s initial zk-approach had a bug, highlighting that caution is needed. A bug bounty program will incentivize white-hat hackers to find vulnerabilities before bad actors do. The DAO could also consider an emergency shutdown mechanism: if a bug is discovered or an attack suspected, the system can halt minting and redemption, effectively freezing in place to prevent further damage while a fix is developed (akin to Maker’s Emergency Shutdown or pausing the contracts). This is a drastic measure and would inconvenience users, but might save the system in a pinch.
3. Dependency on Zcash Network: zkStable relies on the Zcash blockchain for its reserves. If Zcash were to experience problems, zkStable is directly affected. Examples:
Zcash blockchain could have downtime or a consensus failure (though historically rare, hypothetical).
A bug in Zcash’s shielded pool could be exploited (like the infamous inflation bug Zcash once silently fixed where an attacker could have minted infinite ZEC undetected – thankfully not exploited). If such a bug were exploited and extra ZEC were created, the value of ZEC collateral would plummet, impacting pUSD’s backing.
Zcash’s future changes: Zcash might switch to Proof-of-Stake or alter its shielding mechanism (like introducing a new pool, deprecating old ones). zkStable would need to adapt quickly to such changes, which could be complex. Mitigations: Keeping a close collaboration with Zcash developers and community is important for foresight. If Zcash planned a major change, zkStable’s devs would ideally be involved in testnets and migrations. In case of a Zcash network halt, zkStable’s DAO might pause operations until the issue is resolved upstream. There’s also diversification: in the future, zkStable could consider multi-collateral (e.g., also accept XMR or BTC with their own privacy wrappers) to reduce reliance on Zcash alone. But multi-collateral adds complexity and currently Zcash is the main strategy.
4. Liquidity and Market Risks: For pUSD to maintain its peg, there must be sufficient liquidity for users to trade and arbitrage. If pUSD is only thinly traded on a couple of DEXes, then large holders might not be able to exit easily or the price could swing. Also, arbitrage relies on connections between ETH Chain and external markets: if a user wants to redeem pUSD via buying ZEC, they need access to ZEC markets. If liquidity in ZEC dries up or if fiat on-ramps to ZEC are restricted (regulation risk: exchanges delist privacy coins like ZEC), it may hamper pUSD usage and peg arbitrage. Mitigations: Bootstrapping liquidity via incentives early on is critical. zkStable’s team/DAO should ensure pUSD is listed on major venues – ideally not just on ETH DEXes, but maybe on a centralized exchange or two that are friendly to innovative projects. If the user base grows, market forces naturally deepen liquidity. But until then, careful market-making (the DAO could allocate some treasury to provide liquidity or engage professional market makers) helps. Regarding ZEC access, zkStable may need contingency if privacy coins face crackdowns. For instance, if major exchanges delist ZEC, zkStable might integrate decentralized swap routes (like using Thorchain or atomic swaps to get ZEC <-> BTC). This is a broader crypto ecosystem risk that zkStable alone can’t eliminate but can try to adapt to.
5. Regulatory Risk and Legal Uncertainty: Given its focus on privacy, zkStable is at risk of regulatory actions. Governments could deem privacy-focused stablecoins as facilitating illicit finance and attempt to ban or restrict them. We saw Tornado Cash (a mixer) face sanctions from the U.S. Treasury, with even its smart contract addresses blacklisted – a precedent of going after code on-chain. While zkStable isn’t a mixer, it could attract similar scrutiny for making funds opaque. If, for example, the US or EU declared all privacy-enhanced stablecoins illegal to use by exchanges or citizens, pUSD’s growth would be stunted and existing holders might rush to redeem (affecting peg stability or causing a crunch). Mitigations: Engage proactively with regulators (as discussed in Privacy & Compliance, zkStable aims to show it can have privacy and compliance). The project might geo-fence certain UI access or enforce small things like a maximum anonymous transaction size to reduce AML concerns (some proposals have been like “allow privacy for small amounts, but large flows need reporting”). That said, protocol-level enforcement of that is hard without breaking fungibility. Another mitigation is decentralization: if zkStable is truly a protocol run by no one entity, it’s more resilient – authorities could still outlaw usage, but they can’t shut it down easily. Communities like Monero have persisted despite some legal negativity. zkStable should also cultivate legitimate use-cases (as highlighted in personas) so it’s not easily painted as a “tool for criminals” only. Nonetheless, potential users should be aware that holding pUSD could someday be seen like holding Monero – not illegal in many jurisdictions currently, but in a gray zone.
6. User Experience Hurdles: While not a “risk” in the financial sense, a limitation to adoption is that zkStable is more complex to use than a typical stablecoin. Users have to handle two blockchains, manage shielding of ZEC, and work with proofs. If the UX is poor, users may make mistakes (like losing their Zcash private key, thus losing collateral, or messing up a proof submission and not understanding why minting failed). There’s a risk that only power users use it, limiting pUSD’s utility and network effects. If adoption stays niche, it may not get the broad distribution that helps stability and liquidity. Mitigation: Invest heavily in a smooth UI/UX. The ideal is most users shouldn’t even realize they’re doing complex cryptography. For example, the wallet could abstract the process: “Deposit ZEC –> click mint –> you receive pUSD”. Under the hood it does the proving, but the user just waits a minute with a progress bar. Education is also key: since privacy has nuances (e.g., if a user reuses addresses or doesn’t refresh notes, they might leak info), zkStable should educate best practices. A risk akin to Tornado: if users don’t use it properly, their privacy can be compromised (Tornado users who withdrew to the same address they deposited from defeated the privacy, etc.). zkStable’s documentation and community need to guide users to use fresh addresses, keep their Zcash wallet secure, etc. Over time, improved tech (like automated address recycling or integration with hardware wallets) can alleviate these.
7. Governance Risk: zkStable puts a lot of power in a DAO governed by $PRIVACY holders. This carries risks:
Voter apathy or capture: if governance is dominated by a small group (whales or VCs), they could make decisions that benefit them at the expense of others (for instance, lowering collateral ratio to pump pUSD supply unsafely, or redirecting fees in some unfair way).
Poor decisions: The DAO might mismanage the system – e.g., delay raising stability fees in a risky time, or not respond quickly to oracle failures.
Governance attacks: Someone might accumulate $PRIVACY to push malicious changes (like draining reserves if a backdoor existed, or disabling some safety features). Mitigations: On-chain governance can implement delays and checks (time-locks on changes give users time to exit if an insane decision passes). Initially, the core team might retain some veto power to prevent catastrophic proposals until the DAO is mature – though this is a centralizing factor, it might be prudent early on. Encouraging a broad distribution of $PRIVACY through fair launches and liquidity mining helps avoid heavy centralization of votes. Also, transparency in governance (open forums, etc.) and possibly the formation of expert committees (risk committees similar to Maker’s) can improve decision quality. However, governance will always be a human factor risk.
8. Performance and Scalability Limits: Verifying zk-proofs on ETH Chain consumes gas; if zkStable becomes popular, verifying many proofs could bloat blocks or become costly for users. There’s a risk that if gas costs spike or if ETH Chain is congested, minting/redeeming becomes slow or expensive. Similarly, generating proofs is computational – users with low-end devices might find it slow to produce a proof for a large deposit, impacting UX. Mitigations: Use efficient proving systems (Groth16 is fast to verify; proof generation can be sped up with services if needed). Possibly batch multiple mints in one proof if tech allows (saving gas). If ETH Chain layer1 proves too busy, zkStable might consider migrating to a dedicated subnet or layer2 where proofs can be verified more cheaply. These are forward-looking solutions. In the near term, keeping proofs simple (low circuit complexity) and maybe subsidizing some gas for important transactions via the DAO could help.
9. Competition and Adoption Risk: zkStable operates in a competitive environment. If a similar project launches on, say, Ethereum and gets traction, zkStable might find itself overshadowed (Ethereum’s user base is bigger, though ETH is large too). Or if a major stablecoin like DAI decides to implement some privacy layer, zkStable’s uniqueness diminishes. There’s also a risk that not enough users care about privacy to move from convenience of USDC to zkStable, limiting growth. Mitigations: Move fast to establish network effects – partner with projects in the ETH ecosystem to accept pUSD, highlight its benefits, perhaps use liquidity incentives to attract initial users. Marketing to privacy communities (Zcash, Monero fans) can create a strong niche following. Ultimately, the success lies in solving a real pain point; if privacy in stablecoins becomes increasingly salient (and trends suggest it might, as surveillance concerns grow), zkStable will be well-positioned. But it must be ready to iterate and possibly expand to where the users are (multi-chain) to stay competitive.
10. Limitations in Privacy Itself: While zkStable greatly enhances privacy, it’s not absolute: on ETH Chain, pUSD transfers are public, which might allow some meta-analysis (e.g., someone sees a particular address receive pUSD soon after a deposit proof was submitted by some relayer; they might guess that’s the same user). Also, amounts of pUSD minted are visible on-chain (unless we hide amounts via commitments in a future upgrade). This means large actions can attract attention (e.g., “someone minted 1M pUSD at block X” – we don’t know who, but we know it happened). Furthermore, users could still operationally mess up privacy (like withdrawing pUSD to an address that’s linked to them via other means). Clarification: These limitations mean zkStable provides privacy, not perfect anonymity against a global adversary. Zcash itself has some traceability if users move between shielded and transparent incorrectly. zkStable doesn’t solve network-level privacy either (if you use the dApp, your IP could be observed unless using Tor, etc.). Users wanting the highest privacy must still take precautions outside the protocol’s scope. Mitigation: Ongoing user education and tooling (like encouraging use of VPN/Tor, integrating with privacy wallets, etc.). Possibly, the DAO might fund research into adding layer-2 shielded transactions for pUSD to eventually hide even the transaction graph on ETH (much like Aztec’s zkDai attempts), which would mitigate the on-chain analysis issue.
In conclusion, while zkStable is a powerful concept, it lives at the intersection of innovative tech and real-world complexities. Prospective users and stakeholders should approach it understanding these risks. The zkStable team and community commit to transparency about these challenges and to continuously strengthening the system. Measures like thorough audits, prudent governance, and emergency safeguards are in place to reduce risk, but they cannot eliminate it entirely.
Users have to trust in the code and collateral rather than a company – which is the point – but that comes with the responsibility to stay informed. Over time, as the system matures and proves itself (just as Maker and others did through years of operation), confidence in zkStable can grow. But the first users essentially also become contributors to a grand experiment in bridging privacy and stablecoins – an exciting journey, but not one without perils.
Conclusion: Vision for zkStable
zkStable’s creation is driven by a bold vision: to build a stable, private, and decentralized financial primitive that can serve as the foundation for a freer digital economy. In this concluding section, we recap zkStable’s key innovations, its potential impact, and the long-term vision for how it might evolve and contribute to the crypto ecosystem and beyond.
Bridging the Stablecoin Trilemma: zkStable addresses the stablecoin trilemma by refusing to accept the usual trade-offs. It demonstrates that with clever architecture (cross-chain collateral and zk-proofs), one can achieve:
Price Stability: pUSD is pegged to the dollar, fully backed by reserves, giving users confidence in its value for everyday transactions or as a store of value in volatile markets.
Decentralization: No central bank, no company holding funds – zkStable runs on code and community governance. This censorship-resistant design means it can be a financial lifeline even when traditional systems falter or discriminate.
(Relative) Capital Efficiency: While pUSD is over-collateralized, it uses a valuable external asset (ZEC) and may in future diversify collateral, ensuring that the locked capital is productive (ZEC itself can have yield in its ecosystem, or the system can maybe stake assets, etc.). More importantly, users gain something invaluable in return for capital overhead: privacy.
Privacy: This fourth dimension is zkStable’s unique contribution to the stablecoin conversation. By integrating zero-knowledge technology at its core, zkStable ensures privacy is not just an afterthought but a fundamental feature. Financial privacy, as Zcash’s creators often note, is essential for fungibility and personal freedom – a dollar that is private is a dollar that can’t be unfairly blacklisted or surveilled en masse. zkStable extends that principle to a stablecoin.
Empowering Users and New Use-Cases: With zkStable, we foresee new possibilities:
Individuals in repressive regimes or unstable economies can hold a stablecoin without fear of surveillance or freeze, giving them control over their financial destiny.
Businesses and DAOs can transact with confidentiality, protecting sensitive information while still enjoying the benefits of blockchain (speed, global reach, programmability).
DeFi can reach a more mature stage where not every action is in public view, which could ironically encourage more institutional participation who often cite lack of privacy as a barrier.
Cross-chain composability: zkStable connects a privacy chain (Zcash) with a smart contract chain (ETH). This in itself is a blueprint for future cross-chain applications using zk-proofs – showing how one can trustlessly link chains of different types. In the long run, zkStable could become a hub for cross-chain privacy-preserving value transfer.
Vision of a Privacy-Focused Web3: zkStable aligns with a broader vision of Web3 where users don’t have to give up their privacy to benefit from digital services. We imagine a future where:
Wallets have built-in privacy features (like zkStable’s stablecoin, or private DEX routing), so the average user transacts as easily as with any app but under the hood, zero-knowledge proofs are guarding their data.
Compliance and privacy coexist: zkStable could be a case study showing regulators that it’s possible to have financial products that are both protective of individual privacy and still auditable for systemic risks. It might inspire frameworks for “privacy-respecting compliance” – for instance, regulators might accept zk-proofs as reports instead of demanding raw data. That would be a paradigm shift in how society handles financial oversight.
A flourishing ecosystem of privacy DeFi: zkStable’s pUSD might be used in private lending protocols (imagine a lending dApp where collateral and loans are done with shielded identities, so no bias or front-run). Or in gaming and metaverse economies where stablecoins circulate but users don’t expose their holdings to others, maintaining fairness.
Financial Inclusion: Because zkStable is open and permissionless, anyone with internet can access a stable currency. In parts of the world where banking is limited but mobile phones are common, a stablecoin like pUSD can be a gateway to economic inclusion. Privacy ensures that even marginalized or vulnerable groups can use it without exposing themselves to exploitation or persecution.
Resilience and Community: The long-term success of zkStable will depend on its community and governance. The vision is for $PRIVACY token holders to eventually make zkStable a self-sustaining DAO that outlives its founders. As more people use pUSD, those holders can become stakeholders in its governance, ensuring diverse voices. Over time, the hope is $PRIVACY holders will uphold the core principles (stability, privacy, decentralization) and resist pressures that might dilute them (like not giving in to shortcuts that increase centralization, or not sacrificing privacy for convenience). If zkStable can navigate early challenges and prove its model, it could become as foundational to Web3 as protocols like MakerDAO or Uniswap, but filling a niche they do not: the privacy pillar.
Challenges Acknowledged: We are aware that zkStable’s path won’t be easy. It sits at the frontier of cryptography and policy. But that is precisely where breakthroughs happen. The challenges we outlined (technical, economic, regulatory) are not reasons to shy away; they are opportunities to innovate responsibly. Each risk mitigated, each user onboarded, will mark progress toward normalizing the idea that privacy is a default, not a luxury.
A Vision of Success: Let’s paint a picture of potential success a few years out:
pUSD is widely used on ETH Chain and bridged to others, accepted in major DeFi platforms just like DAI or USDC. It might not be the absolute largest stablecoin, but it’s a significant player, especially valued in contexts requiring confidentiality.
Journalists or NGOs cite pUSD as a tool that helped in difficult situations (e.g., delivering aid privately to dissidents, or enabling a new kind of commerce in a community that needed privacy).
Other projects adopt zkStable’s model; perhaps we see “zkStable Euro” or others, or the zkStable DAO itself extends to multi-currency. zkStable could even become a suite of privacy stablecoins, governed by one DAO, collateralized by various assets but always using zk-proofs for trust.
Regulators haven’t shut it down; instead, some forward-thinking jurisdictions embrace it, maybe even using its tech for their own digital currency sandboxes (imagine a central bank using a variant of zkStable to issue a test CBDC that hides transaction details by default, citing zkStable as inspiration).
The $PRIVACY governance token has matured – it’s widely distributed, actively used in proposals. The community might fund public goods around privacy (like grants to improve Zcash or to integrate zkStable with hardware wallets, etc.), becoming a force in the crypto space advocating for privacy standards.
In essence, the vision for zkStable is to be a cornerstone of a more private and free crypto-financial system. It draws lessons from its predecessors: learning from MakerDAO about sound collateralization, from Zcash about robust privacy, from the failures of purely algorithmic coins about caution, and from centralized coins about the importance of user experience and stability. By combining these lessons, zkStable aspires to deliver a stablecoin that feels as reliable as the best centralized dollar, as permissionless as Bitcoin, and as confidential as cash.
The journey will require innovation, community effort, and dialogue with the wider world of finance and regulation. If successful, zkStable could not only carve out its own niche but elevate the standards for what we expect of digital money. A future is imagined where when someone says “stablecoin,” they automatically assume it’s private by default – because zkStable showed it was possible and preferable. That is the ultimate vision: making privacy an inherent feature, not an optional add-on, in the stablecoins of tomorrow.
zkStable is more than a protocol; it’s a statement that decentralization and privacy can reinforce each other to create a new kind of financial freedom. With that vision in mind, we invite investors, developers, and users to join us in turning this whitepaper’s blueprint into a living reality. The era of the privacy stablecoin is dawning, and zkStable stands at its forefront, poised to demonstrate that privacy and trust can walk hand in hand into the future of money.
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