Gemini Targets Privacy with Shielded Zcash Withdrawals

Tyler Winklevoss, the Gemini co-founder, announced on Twitter that the crypto exchange now supports shielded Zcash withdrawals. According to Winklevoss, the shift toward shielded transactions marks a milestone as “a world’s first for a regulated exchange.” Gemini noted in an announcement that the move would give regulators a chance to “get comfortable with privacy-enabling cryptos.” Its timing couldn’t be better. With the EU revealing that a regulatory framework for cryptocurrencies was in the works, all eyes are on the US for its next move. Winklevoss told BeInCrypto,

We’re focused on building features that give you financial freedom. Supporting 15 new DeFi tokens last week and now supporting shielded Zcash withdrawals help advance our mission.

It's time to take back control of your money and your privacy. @Gemini is now supports shielded Zcash $ZEC withdrawals. A world's first for a regulated exchange. https://t.co/nfxRYi0Mul

— Tyler Winklevoss (@tyler) September 29, 2020

Shielded Transactions

The Electric Coin Company, which is behind the privacy coin Zcash, also touted the development, saying it’s a stamp of regulatory approval for Zcash’s confidential transactions.

Today, @Gemini announced support for shielded Zcash withdrawals. This is an important milestone for financial privacy and shows that Zcash’s confidential transactions are compliant with NYDFS regulations. https://t.co/CB1cy4tXxb#Zcash $ZEC

— Electric Coin Company (@ElectricCoinCo) September 29, 2020

Zcash transactions can be either private or transparent, depending on the wallet address that is used. Private addresses begin with a “z” while transparent addresses start with a “t.” The Zcash technology uses zk-SNARKs to obfuscate certain features of the transaction, including the address, amount, and memo field. With Gemini’s support, users of the exchange can now “withdraw to shielded Zcash addresses.”

Bitcoin Core Dev Didn’t See It Coming

Crypto Twitter is a tough place to impress, but Gemini managed to win the kudos of one blockchain pioneer. Jeff Garzik, an early Bitcoin developer, cheered the development on Twitter, saying it was a “big step for centralized exchanges,” one that he didn’t see coming in 2020.

This is a big step for centralized exchanges, and one I admit I did not think would come to pass for a US exchange this year. Happy to be proven wrong! #blockchain #cryptocurrency #privacy @ElectricCoinCo @ZcashFoundation https://t.co/2Bx5t0VzsT

— Jeff Garzik (@jgarzik) September 29, 2020

Yield Farming Zcash

Zcash has also made its way into the burgeoning DeFi space. According to the Zcash forum, users can mint ZEC as an ERC-20 token, which brings them into the world of Ethereum. As of September, more than 900 ZEC is wrapped on Ethereum. Electric Coin Company CEO Zooko Wilcox recently tweeted about yield farming ZEC.

A way to Yield Farm your ZEC: https://t.co/2URcfTFbFb

— zooko (@zooko) September 28, 2020

According to the Zcash forum, there is a poll on the Maker governance platform “for renZEC to be reviewed by the domain teams of MakerDAO.” Maximilian Roszko explained on the forum,

Down the line, if this passes the executive vote, you would be able to take out a loan against your ZEC, which is fantastic!

If it happens, that’s where Gemini’s two worlds will likely come together.