Terminology

The key words "MUST", "MUST NOT", "SHOULD", "RECOMMENDED", and "MAY" in this document are to be interpreted as described in BCP 14 1 when, and only when, they appear in all capitals.

The term "network upgrade" in this document is to be interpreted as described in ZIP 200 7.

The terms "Orchard" and "Action" in this document are to be interpreted as described in ZIP 224 9.

We define the following additional terms:

• Asset: A type of note that can be transferred on the Zcash blockchain. Each Asset is identified by an Asset Identifier Specification: Asset Identifier.
  • ZEC is the default (and currently the only defined) Asset for the Zcash mainnet.
  • TAZ is the default (and currently the only defined) Asset for the Zcash testnet.
  • We use the term "Custom Asset" to refer to any Asset other than ZEC and TAZ.
• Native Asset: a Custom Asset with issuance defined on the Zcash blockchain.
• Wrapped Asset: a Custom Asset with native issuance defined outside the Zcash blockchain.
• Issuance Action: an instance of a single issuance of a Zcash Shielded Asset. It defines the issuance of a single Asset Identifier.
• Issuance Bundle: the bundle in the transaction that contains all the issuance actions of that transaction.

Abstract

This ZIP (ZIP 227) proposes the Zcash Shielded Assets (ZSA) protocol, in conjunction with ZIP 226 10. This protocol is an extension of the Orchard protocol that enables the creation, transfer and burn of Custom Assets on the Zcash chain. The creation of such Assets is defined in this ZIP (ZIP 227), while the transfer and burn of such Assets is defined in ZIP 226 10. This ZIP must only be implemented in conjunction with ZIP 226 10. The proposed issuance mechanism is only valid for the Orchard-ZSA transfer protocol, because it produces notes that can only be transferred under ZSA.

Motivation

This ZIP introduces the issuance mechanism for Custom Assets on the Zcash chain. While originally part of a single ZSA ZIP, the issuance mechanism turned out to be substantial enough to stand on its own and justify the creation of this supporting ZIP for ZIP 226 10.

This ZIP only enables transparent issuance. As a first step, transparency will allow for proper testing of the applications that will be most used in the Zcash ecosystem, and will enable the supply of Assets to be tracked.

The issuance mechanism described in this ZIP is broad enough for issuers to either create Assets on Zcash (i.e. Assets that originate on the Zcash blockchain), as well as for institutions to create bridges from other chains and import Wrapped Assets. This enables what we hope will be a useful set of applications.

Use Cases

The design presented in this ZIP enables issuance of shielded Assets in various modes:

• The issuer may or may not know the receivers of the issued Asset in advance.
• The Asset can be of non-fungible type, where each Asset type can be made part of a single “series”.
• The supply of the Asset can be limited in advance or not.
• The Asset can be a wrapped version of an Asset issued by another chain (as long as there is a bridge that supports transfer of that Asset between chains).

See the Concrete Applications section for more details.

Requirements

• Any user of the Zcash blockchain can issue Custom Assets on chain.
• The issuance mechanism should enable public tracking of the supply of the Assets on the Zcash blockchain.
• Issuing or changing the attributes of a specific Asset should require cryptographic authorization.
• The Asset identification should be unique (among all shielded pools) and different issuer public keys should not be able to generate the same Asset Identifier.
• An issuer should be able to issue different Assets in the same transaction. In other words, in a single "issuance bundle", the issuer should be able publish many "issuance actions", potentially creating multiple Custom Assets.
• Every "issuance action" should contain a \(\mathsf{finalize}\) boolean that defines whether the specific Custom Asset can have further tokens issued or not.

Specification: Issuance Keys and Issuance Authorization Signature Scheme

The Orchard-ZSA Protocol adds the following keys to the key components 20 21:

1. The issuance authorizing key, denoted as \(\mathsf{isk}\!\) , is the key used to authorize the issuance of Asset Identifiers by a given issuer, and is only used by that issuer.
2. The issuance validating key, denoted as \(\mathsf{ik}\!\) , is the key that is used to validate issuance transactions. This key is used to validate the issuance of Asset Identifiers by a given issuer, and is used by all blockchain users (specifically the owners of notes for that Asset, and consensus validators) to associate the Asset in question with the issuer.

The relations between these keys are shown in the following diagram:

Specification: Asset Identifier

For every new Asset, there must be a new and unique Asset Identifier, denoted \(\mathsf{AssetId}\!\) . We define this to be a globally unique pair \(\mathsf{AssetId} := (\mathsf{ik}, \mathsf{asset\_desc})\!\) , where \(\mathsf{ik}\) is the issuance key and \(\mathsf{asset\_desc}\) is a byte string.

A given Asset Identifier is used across all Zcash protocols that support ZSAs -- that is, the Orchard-ZSA protocol and potentially future Zcash shielded protocols. For this Asset Identifier, we derive an Asset Digest, \(\mathsf{AssetDigest}\!\) , which is simply is a \(\textsf{BLAKE2b-512}\) hash of the Asset Identifier. From the Asset Digest, we derive a specific Asset Base within each shielded protocol using the applicable hash-to-curve algorithm. This Asset Base is included in shielded notes.

Let

• \(\mathsf{asset\_desc}\) be the asset description, which includes any information pertaining to the issuance, and is a byte sequence of up to 512 bytes which SHOULD be a well-formed UTF-8 code unit sequence according to Unicode 15.0.0 or later.
• \(\mathsf{ik}\) be the issuance validating key of the issuer, a public key used to verify the signature on the issuance transaction's SIGHASH.

Define \(\mathsf{AssetDigest_{AssetId}} := \textsf{BLAKE2b-512}(\texttt{“ZSA-Asset-Digest”},\; \mathsf{EncodeAssetId}(\mathsf{AssetId}))\!\) , where

• \(\mathsf{EncodeAssetId}(\mathsf{AssetId}) = \mathsf{EncodeAssetId}((\mathsf{ik}, \mathsf{asset\_desc})) := \mathtt{0x00} || \mathsf{ik} || \mathsf{asset\_desc}\!\!\) .
• Note that the initial \(\mathtt{0x00}\) byte is a version byte.

Define \(\mathsf{AssetBase_{AssetId}} := \mathsf{ZSAValueBase}(\mathsf{AssetDigest_{AssetId}})\)

In the case of the Orchard-ZSA protocol, we define \(\mathsf{ZSAValueBase}(\mathsf{AssetDigest_{AssetId}}) := \mathsf{GroupHash}^\mathbb{P}(\texttt{“z.cash:OrchardZSA”}, \mathsf{AssetDigest_{AssetId}})\) where \(\mathsf{GroupHash}^\mathbb{P}\) is defined as in 22.

The relations between the Asset Identifier, Asset Digest, and Asset Base are shown in the following diagram:

Note: To keep notations light and concise, we may omit \(\mathsf{AssetId}\) (resp. \(\mathsf{Protocol}\!\) ) in the subscript (resp. superscript) when the Asset Identifier (resp. Protocol) is clear from the context.

Wallets MUST NOT display just the \(\mathsf{asset\_desc}\) string to their users as the name of the Asset. Some possible alternatives include:

• Wallets could allow clients to provide an additional configuration file that stores a one-to-one mapping of names to Asset Identifiers via a petname system. This allows clients to rename the Assets in a way they find useful. Default versions of this file with well-known Assets listed can be made available online as a starting point for clients.
• The Asset Digest could be used as a more compact bytestring to uniquely determine an Asset, and wallets could support clients scanning QR codes to load Asset information into their wallets.

Specification: Global Issuance State

Issuance requires the following additions to the global state defined at block boundaries:

A map, \(\mathsf{issued\_assets}\!\) , from the Asset Base, \(\mathsf{AssetBase}\!\) , to a tuple \((\mathsf{balance}, \mathsf{final})\!\) , for every Asset that has been issued up until the block boundary. For each Asset:

• The amount of the Asset in circulation, computed as the amount of the Asset that has been issued less the amount of the Asset that has been burnt, is stored in \(\mathsf{balance}\!\) .
• The boolean \(\mathsf{final}\) stores the finalization status of the Asset (i.e.: whether the \(\mathsf{finalize}\) flag has been set to \(1\) in some issuance transaction for the Asset preceding the block boundary). The value of \(\mathsf{final}\) for any Asset cannot be changed from \(1\) to \(0\!\) .

We use the notation \(\mathsf{issued\_assets}(\mathsf{AssetBase}).\!\mathsf{balance}\) and \(\mathsf{issued\_assets}(\mathsf{AssetBase}).\!\mathsf{final}\) to access, respectively, the balance and finalization status of the Asset stored in the global state.

Specification: Issuance Action, Issuance Bundle and Issuance Protocol

Specification: Consensus Rule Changes

For the IssueBundle:

• Validate the issuance authorization signature, \(\mathsf{issueAuthSig}\!\) , on the SIGHASH transaction hash, \(\mathsf{SigHash}\!\) , by invoking \(\mathsf{IssueAuthSig.Validate}(\mathsf{ik}, \mathsf{SigHash}, \mathsf{issueAuthSig})\!\) .

For each IssueAction in IssueBundle:

• check that \(0 < \mathtt{assetDescSize} \leq 512\!\) .
• check that \(\mathsf{asset\_desc}\) is a string of length \(\mathtt{assetDescSize}\) bytes.
• retrieve \(\mathsf{AssetBase}\) from the first note in the sequence and check that \(\mathsf{AssetBase}\) is derived from the issuance validating key \(\mathsf{ik}\) and \(\mathsf{asset\_desc}\) as described in the Specification: Asset Identifier section.
• check that \(\mathsf{issued\_assets(AssetBase).final} \neq 1\) in the global state.
• check that every note in the IssueAction contains the same \(\mathsf{AssetBase}\) and is properly constructed as \(\mathsf{note} = (\mathsf{g_d}, \mathsf{pk_d}, \mathsf{v}, \text{ρ}, \mathsf{rseed}, \mathsf{AssetBase})\!\) .

If all of the above checks pass, do the following:

• For each note,
  • compute the note commitment as \(\mathsf{cm} = \mathsf{NoteCommit^{OrchardZSA}_{rcm}}(\mathsf{repr}_{\mathbb{P}}(\mathsf{g_d}), \mathsf{repr}_{\mathbb{P}}(\mathsf{pk_d}), \mathsf{v}, \text{ρ}, \text{ψ}, \mathsf{AssetBase})\) as defined in the Note Structure and Commitment section of ZIP 226 11.
  • Add \(\mathsf{cm}\) to the Merkle tree of note commitments.
  • Increase the value of \(\mathsf{issued\_assets(AssetBase).balance}\) by the value of the note, \(\mathsf{v}\!\) .
• If \(\mathsf{finalize} = 1\!\) , set \(\mathsf{issued\_assets(AssetBase).final}\) to \(1\) in the global state.
• (Replay Protection) If issue bundle is present, the fees MUST be greater than zero.

Rationale

The following is a list of rationale for different decisions made in the proposal:

• The issuance key structure is independent of the original key tree, but derived in an analogous manner (via ZIP 32). This is in order to keep the issuance details and the Asset Identifiers consistent across multiple shielded pools.
• The design decision is not to have a chosen name to describe the Custom Asset, but to delegate it to an off-chain mapping, as this would imply a land-grab “war”.
• The \(\mathsf{asset\_desc}\) is a general byte string in order to allow for a wide range of information type to be included that may be associated with the Assets. Some are:
  • links for storage such as for NFTs.
  • metadata for Assets, encoded in any format.
  • bridging information for Wrapped Assets (chain of origin, issuer name, etc)
  • information to be committed by the issuer, though not enforceable by the protocol.
• We limit the size of the \(\mathsf{asset\_desc}\) string to 512 bytes as it is a reasonable size to store metadata about the Asset, for example in JSON format.
• We require non-zero fees in the presence of an issue bundle, in order to preclude the possibility of a transaction containing only an issue bundle. If a transaction includes only an issue bundle, the SIGHASH transaction hash would be computed solely based on the issue bundle. A duplicate bundle would have the same SIGHASH transaction hash, potentially allowing for a replay attack.

TxId Digest - Issuance

This section details the construction of the subtree of hashes in the transaction digest that corresponds to issuance transaction data. Details of the overall changes to the transaction digest due to the Orchard-ZSA protocol can be found in ZIP 226 12. As in ZIP 244 13, the digests are all personalized BLAKE2b-256 hashes, and in cases where no elements are available for hashing, a personalized hash of the empty byte array is used.

A new issuance transaction digest algorithm is defined that constructs the subtree of the transaction digest tree of hashes for the issuance portion of a transaction. Each branch of the subtree will correspond to a specific subset of issuance transaction data. The overall structure of the hash is as follows; each name referenced here will be described in detail below:

issuance_digest
├── issue_actions_digest
│   ├── issue_notes_digest
│   ├── assetDescription
│   └── flagsIssuance
└── issuanceValidatingKey

In the specification below, nodes of the tree are presented in depth-first order.

T.5a: issue_actions_digest    (32-byte hash output)
T.5b: issuanceValidatingKey   (32 bytes)

"ZTxIdSAIssueHash"

BLAKE2b-256("ZTxIdSAIssueHash", [])

T.5a.i  : notes_digest            (32-byte hash output)
T.5a.ii : assetDescription        (field encoding bytes)
T.5a.iii: flagsIssuance           (1 byte)

"ZTxIdIssuActHash"

T.5a.i.1: recipient                    (field encoding bytes)
T.5a.i.2: value                        (field encoding bytes)
T.5a.i.3: assetBase                    (field encoding bytes)
T.5a.i.4: rho                          (field encoding bytes)
T.5a.i.5: rseed                        (field encoding bytes)

"ZTxIdIAcNoteHash"

BLAKE2b-256("ZTxIdIAcNoteHash", [])

Signature Digest

The per-input transaction digest algorithm to generate the signature digest in ZIP 244 14 is modified so that a signature digest is produced for each transparent input, each Sapling input, each Orchard action, and additionally for each Issuance Action. For Issuance Actions, this algorithm has the exact same output as the transaction digest algorithm, thus the txid may be signed directly.

The overall structure of the hash is as follows. We highlight the changes for the Orchard-ZSA protocol via the [ADDED FOR ZSA] text label, and we omit the descriptions of the sections that do not change for the Orchard-ZSA protocol:

signature_digest
├── header_digest
├── transparent_sig_digest
├── sapling_digest
├── orchard_digest
└── issuance_digest         [ADDED FOR ZSA]

S.1: header_digest          (32-byte hash output)
S.2: transparent_sig_digest (32-byte hash output)
S.3: sapling_digest         (32-byte hash output)
S.4: orchard_digest         (32-byte hash output)
S.5: issuance_digest        (32-byte hash output)  [ADDED FOR ZSA]

Authorizing Data Commitment

The transaction digest algorithm defined in ZIP 244 15 which commits to the authorizing data of a transaction is modified by the Orchard-ZSA protocol to have the following structure. We highlight the changes for the Orchard-ZSA protocol via the [ADDED FOR ZSA] text label, and we omit the descriptions of the sections that do not change for the Orchard-ZSA protocol:

auth_digest
├── transparent_scripts_digest
├── sapling_auth_digest
├── orchard_auth_digest
└── issuance_auth_digest        [ADDED FOR ZSA]

The pair (Transaction Identifier, Auth Commitment) constitutes a commitment to all the data of a serialized transaction that may be included in a block.

A.1: transparent_scripts_digest (32-byte hash output)
A.2: sapling_auth_digest        (32-byte hash output)
A.3: orchard_auth_digest        (32-byte hash output)
A.4: issuance_auth_digest       (32-byte hash output)  [ADDED FOR ZSA]

A.4a: issueAuthSig            (field encoding bytes)

"ZTxAuthZSAOrHash"

BLAKE2b-256("ZTxAuthZSAOrHash", [])

Security and Privacy Considerations

Other Considerations

Test Vectors

• LINK TBD

Reference Implementation

• LINK TBD
• LINK TBD

Deployment

TBD

References