Zcash in DeFi? Wrapped ZEC Is Coming to the Ethereum Blockchain as Anchorage and Tokensoft Launch "Wrapped" Service

Key highlights:

• Anchorage and Tokensoft are launching Wrapped Zcash on the Ethereum blockchain
• WZEC will provide access to shielded Zcash
• The token will use the ERC-1404 token standard

Wrapped Zcash is coming to Ethereum

As Wrapped Bitcoin continues to gain in popularity, blockchain developers are looking for ways to tokenize other popular cryptocurrencies and make them available on Ethereum’s flourishing DeFi (decentralized finance) ecosystem. 

Cryptocurrency custodian and broker Anchorage and blockchain services firm Tokensoft have teamed up to bring Zcash to Ethereum through their newly-announced service called Wrapped. WZEC or Wrapped ZEC tokens will leverage the ERC-1404 token standard, which was developed by Tokensoft. Anchorage will be custodying the mainnet ZEC coins that are locked in order to mint WZEC tokens. 

Mason Borda, the CEO of Tokensoft, commented:

“We’re looking forward to enabling a more interoperable form of Zcash with WZEC. Users of WZEC will have the ability to use their Zcash in a variety of DeFi applications. Additionally, exchanges will now be able to hold Zcash while meeting their compliance requirements.”

Zcash is a privacy-focused cryptocurrency that leverages zero-knowledge proofs to give users the ability to send shielded transactions. Launched in October of 2016, Zcash is currently approaching its first ever halving – under current network conditions, the Zcash halving is expected to happen on November 18. The Zcash block reward will be reduced in half from 6.25 ZEC to 3.125 ZEC.

According to the Wrapped ZEC announcement, WZEC will provide access to shielded Zcash, giving users a much greater degree of privacy. So far, 9,001 ZEC (around $590,000) have been wrapped through the service.

Wrapped tokens are useful because they allow holders of cryptocurrencies that don’t have native smart contract functionality, for example Bitcoin, Litecoin and Zcash, to use their coins in decentralized applications. This opens up new use cases in decentralized lending, trading and other DeFi services.

The collaboration between Anchorage and Tokensoft is not the first time a representation of Zcash is coming to the Ethereum platform. Ren, an inter-blockchain liquidity protocol built on Ethereum, also supports the Zcash blockchain.