[ZIP 220] Zcash Shielded Assets (previously UDA or UIT)

[daira]

Several block chain platforms allow supporting multiple asset types in a single system — for example ERC 20 tokens in Ethereum. Each of these assets satisfy balance individually. For Zcash, they could all share the same note anonymity set. We rejected this from 1.0 on grounds of complexity, but it deserves an issue ticket to be able to refer to the idea.

[Edit: when I originally wrote this I thought that "Coloured coins" in Bitcoin were an example, but they actually do not represent separate assets.]

[jackgavigan]

In recent months, we have using the term "user-defined assets" (UDA) to refer to this concept.

To my mind, the goal should be to allow users to issue "native" assets - i.e. the new assets are effectively identical to ZEC in terms of functionality (including the ability to shield and unshield), they'll just have a different identifier. Note that this approach is very different to coloured coins, which effectively allows a user to "paint" a pre-existing, native coin instead of creating a new asset. This would allow anyone to create and transact new assets on the Zcash platform. Transaction fees would continue to be denominated in ZEC.

Questions to be explored include:

• How to identify/differentiate user-defined assets? (e.g. an asset identifier based on a public key)
• How to control issuance? (e.g. with the corresponding private key?)
• What issuance models should be supported? Supply defined and fixed at the time of creation? Ongoing issuance - either unlimited or with a maximum supply set at the time of creation?
• Should it be possible to issue assets privately or should all issuance happen transparently?
• Should it be possible to redeem/withdraw assets from circulation (thereby formally reducing the total supply)?
• Should there be multisig-style support for issuance?
• Should it be possible to define an asset whose issuance is triggered from another blockchain (e.g. by depositing the other blockchain's asset into an escrow address/contract), and which can be redeemed/withdrawn back to the other blockchain? (This would effectively allow the Zcash network to be used as a payment channel).
• Should there be a fee for creating a new asset type? (e.g. Payable to the Zcash Foundation?)

Once support for UDA is in place, the logical next step is to add support for what I'm dubbing "intra-chain atomic trades" (ICAT) - i.e. the ability to atomically swap different assets on the same blockchain. I've created a separate issue for that feature: #2053

[nathan-at-least]

Here are some design constraints in the form of 'features we wish to avoid precluding':

• Various simple UIT-based voting protocols. See ZIP:publicly verifiable anonymous voting on the Zcash blockchain (with minimal protocol changes) zips#102 and the related but different voting-protocols work in Voting based on proof-of-stake zips#1169.
• ICAT: indistinguishable multi-party-opt-in asset trades (see Intra-Chain Atomic Trades (ICAT) #2053).