Last week the cryptocurrency community gathered for the Devcon developer conference in Osaka, Japan and the overall enthusiasm pointed towards smaller projects that pursue access to Ethereum’s decentralized finance assortment of options.
Summa co-founder James Prestwich shared his views:
“Connecting to other chains doesn’t seem to be an Ethereum developer’s priority… but other chains seem to want to connect to Ethereum.”
For instance, the VP of marketing and business development at the Electric Coin Company (ECC), Josh Swihart, mentioned that the Zcash community’s aim in the next six months will be to develop a wrapped ZEC token that would be used on Ethereum.
ZEC could be regarded as a future means for private, financial products including automated loans.
This should be accomplished in the same manner how Cross-Chain Working Group’s wrapped token is enabling Bitcoin usage on the Ethereum blockchain.
This prime example grabbed the attention of many people at Devcon.
It is quite clear why ECC is heading in this direction. When checking DeFi Pulse, we can see that there are more than $553 million worth of Ethereum-based tokens captivated in DeFi applications.
The privacy coin’s exclusive feature, Shielded address transactions, are happening very rarely. As counted by the Zcash block explorer Zchain, from the 70,260,454 total transactions last month, only 271,356 were shielded.
ECC will have to discover new and attractive use cases that go beyond speculative trading and shielded transactions to improve the usage of Zcash.
According to Swihart the aim is to turn Zcash into a platform individuals can build on. He explained:
“If you want to do lending, if you want to do DAOs (decentralized autonomous organizations), all of that stuff could be done with zcash as well. … Ultimately, we want zcash shielded [addresses] to be usable in ethereum smart contracts.”
As Prestwich indicated, it is still unclear how cross-chain interoperability would apply into the next version of Ethereum and this is why all work in this direction would be only temporary.
In his opinion such cross-chain abilities would take years in research and development.
In the meantime, Zooko Wilcox, ECC founder, is known to be in a very good relationship with Vitalik Buterin – Ethereum’s creator. This connection is of course reinforced by Buterin’s interest towards zk-SNARKs (the element behind Zcash’s privacy features).
During a panel at Devcon about interoperability between blockchains, Buterin made a remark that the Ethereum society still values privacy features even while prioritizing usability.
Let’s take all organizations that are creating custom machines by using Ethereum, e.g. blockchain-powered video games, and their need for privacy options for their niche tokens.
Most of the time in this case, ERC-20 tokens are tallied via a public ledger which exposes the addresses of top holders.
It regards to why dapp creators would fancy shielded addresses and smart contract options, Ioan Miers, Zcash Foundation board member commented:
“You don’t want to be the kid at Chuck E. Cheese where everyone knows you have all the tokens.”