Zcash Shielded Assets

Zcash Shielded Assets (ZSA) allow users to issue their own custom assets on Zcash, stored in the Orchard shielded pool. Implemented per ZIP-226 (issuance keys) and ZIP-227 (shielded assets), ZSA lets anyone issue a confidential asset, transfer it between shielded addresses, and optionally burn it.

Issuance notes are published as plaintext (not encrypted) so that anyone can verify the total supply of an asset. Each asset is identified by an asset ID derived from the issuer's key and a BLAKE2b-256 hash of the asset description (name).

Important

The goal of the ZSA effort is to gauge real interest in shielded assets, and real interest shows in participation: an application built, an asset issued, a transaction sent. Each of those is worth more than any number of social media likes, and each makes the case that shielded assets are wanted. The ecosystem grows with every project that builds on it.

Use Cases

Project tokens: a project or DAO issues its own token and distributes it to holders, who can send it between shielded addresses with the same privacy as ZEC.
Stablecoins: a trusted issuer backs each unit with reserves and publishes issuance in plaintext, so anyone can audit that the total supply never exceeds the reserves.
Loyalty points: a business issues reward points as an asset and lets customers hold, transfer, or redeem them privately.
Tokenized real-world assets: ownership of an asset (e.g. a security or collectible) is represented on-chain; the issuer can finalize the asset to guarantee no further units can ever be issued.

Tokenomics

Supply: the total supply is set by the issuer at issuance time. Because issuance notes are plaintext, the circulating supply is always publicly verifiable on-chain, even though individual transfers stay shielded.
Capped supply: finalizing an asset permanently disables further issuance, locking the supply and guaranteeing scarcity. Until finalized, the issuer can print additional units at will.
Burning: assets can be permanently destroyed via the assetBurn mechanism (defined in ZIP-226). A transaction declares the asset and amount to burn; the protocol verifies it against the tracked circulating supply and decrements it, so burnt value is gone forever. Burning is the recommended way to off-board and redeem bridged assets.
Fees: transaction fees on Zcash are always paid in ZEC, never in the custom asset itself. Holding or transferring an asset costs ZEC for fees, so users need some ZEC alongside their asset holdings.
Value: ZSA imposes no economic policy. An asset's value is entirely market-determined (backing, demand, and issuer reputation). The protocol only guarantees supply transparency and, after finalization, supply cap.

Implementation Notes

Fees: fees are not yet fully implemented per the spec. The cost to issue an asset should be higher.
Finalization: assets are always finalized for now; reissuance is not yet supported.
Burning: burning assets is not implemented.