Possible listing of Zcash by Coinbase

By Eliézer Ndinga

In the midst of an intense year towards completing the next protocol upgrade called Sapling, Zcash (ZEC) has caught the attention of many market participants and has been listed on various exchanges. Most notably, Gemini in mid-May of this year became the first licensed custodian and exchange to trade Zcash in New York. Nonetheless, the road to greater brand awareness and mainstream adoption for Zcash has just started.

With the intention of listing most digital assets compliant with local laws, Coinbase announced on July 13, 2018, that it was investigating the addition of a range of new cryptoassets including Zcash. While promising, this announcement does not guarantee the listing of Zcash. Coinbase requires all crypto candidates to go through their rigorous proprietary evaluation, titled the Coinbase Digital Asset Framework.

This framework is composed of six parts and relevant assets must meet all the criteria in their entirety to pass the test for listing.

Source: Coinbase Digital Asset Framework & Coinbase User Agreement

Interestingly, Zcash meets all the standards and therefore seems to be the perfect candidate:

1. Zcash aims to provide an open and censorship-free financial infrastructure to promote economic freedom through privacy, which is in alignment with Coinbase’s core values and mission.
2. The team is composed of world-class researchers with proven track records in a branch of zero-knowledge proofs called zk-SNARKs. The team members are visible and accessible on various channels such as Github, Twitter, the Zcash Forum, the community chat, and their own blog.
3. To date, there is no evidence that ZEC is considered to be a stock and the Zcash company has not been deemed a “Prohibited Business”.
4. 57 exchanges list Zcash which has helped contribute to the asset’s market cap of more than $500 million. These exchanges — such as Gemini, HitBTC, Bithumb, Huobi, and Binance — are geographically dispersed and incorporated in places like the US, China, South Korea, Singapore, and Malta.
5. Since its launch on October 2016, 2016 the Zcash community has grown significantly: now having more than 2,200 meetup members and more than 14,000 Reddit subscribers. Additionally, contributors created the ZcashCommunity which acts as an educational portal. The developer community has also noticeably increased over time, accounting for over 11,000 commits, 300 contributors, 50 releases and 10 branches. And the Zcash Company received $3 million in total funding from renowned investors in the crypto space such as Naval Ravikant, Pantera Capital and Digital Currency Group.
6. The Zcash economic structure has been designed to incentivize the company’s stakeholders — employees, investors, founders and the Zcash Foundation — to act in the best in interests of the network. For the first four years, 20 percent of the block reward is being distributed to the so-called Founders’ Reward and the rest to the miners. In time, the Zcash Company stakeholders will account for less than 10 percent of the total supply of 21 million ZEC.

Regardless of the final outcome, over the last few days, the Zcash community has responded with great enthusiasm to the Coinbase announcement, which has been reflected in various ways. For example, Google searches for Zcash reached the highest peak of popularity on July 14, 2018, and the price of Zcash increased by 11 percent in the two days between July 13 and July 15, 2018, from $155 per ZEC to $174.

Figure1: Zcash Google Search

Source: Google Trends

All in all the Coinbase announcement is positive news for ZEC. If the cryptoasset is listed, it will gain exposure to an extra 20 million users around the world and the project’s credibility will greatly benefit from receiving this huge stamp of approval.

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This article is intended for informational purposes only. The views expressed herein are not and should not be construed as legal or investment advice or recommendations. Recipients of this article should do their own due diligence, considering their specific financial circumstances, investment objectives, and risk tolerance before investing. The individuals contributing to this article have positions in some or all of the assets discussed. This article is neither an offer, nor the solicitation of an offer, to buy or sell any of the assets mentioned herein.