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Protocol History and Governance

Why This Chapter Exists​

The protocol is the protocol because of the history. Why does NU5 not unify Sapling and Orchard? Because Orchard was a deliberate clean break. Why does Sprout still exist? Because removing it would invalidate existing notes. You will read this chapter once and then need it.

You will hear names and dates as if they are common knowledge. They are not. This file gives you the narrative.

The Timeline at a Glance​

  • 2013: Zerocoin paper (Miers, Garman, Green, Rubin). A way to make Bitcoin transactions anonymous via accumulator-based mixing.
  • 2014: Zerocash paper (Ben-Sasson, Chiesa, Garman, Green, Miers, Tromer, Virza). Uses zk-SNARKs (BCTV14) to give private payments with hidden values. IEEE S&P 2014.
  • 2016 October: Zcash mainnet launches. The Zcash Sprout protocol is Zerocash with BCTV14 SNARKs over BN254 (Barreto-Naehrig 254-bit curve).
  • 2018 June: Overwinter network upgrade. Replay protection, transaction expiry (ZIP-203), versioning groundwork.
  • 2018 October: Sapling network upgrade. The big one. Replaces BCTV14 with Groth16 over BLS12-381. Introduces a new shielded pool with much smaller proofs (~200 bytes), faster generation (seconds on a phone, not minutes on a server), and hierarchical deterministic keys (ZIP-32). The Sapling MPC ceremony provided the trusted setup. Simultaneously fixes the BCTV14 soundness flaw silently.
  • 2019 February: Public disclosure of the 2018 BCTV14 counterfeiting vulnerability.
  • 2019 December: Blossom network upgrade. Halves block time from 150s to 75s (ZIP-208).
  • 2020 July: Heartwood network upgrade. Adds the chain history MMR (ZIP-221) and shielded coinbase support (ZIP-213).
  • 2020 November: Canopy network upgrade. Founders' reward sunset, funding streams begin (ZIP-207, ZIP-214). First halving (height 1046400).
  • 2022 May: NU5 network upgrade. Introduces the Orchard shielded pool with Halo2 proofs (no trusted setup, IPA over Pallas). New v5 transaction format (ZIP-225, ZIP-244 sighash). Canonical encoding enforcement (ZIP-216).
  • 2024 November: NU6 network upgrade. Establishes the NSM (Network Sustainability Mechanism) for funding (ZIP-1014, ZIP-1015 family). Tightens consensus around funding streams.
  • in progress: NU6.1 and NU7. See file 15.

Why Each Upgrade Happened​

The pattern is consistent: a research breakthrough, an engineering need, or a governance decision drives the upgrade.

  • Overwinter: defense in depth (replay, expiry) and groundwork.
  • Sapling: research (Pinocchio -> Groth16; new commitment scheme; hierarchical keys) and the urgent need to patch BCTV14.
  • Blossom: shorter block times for better UX.
  • Heartwood: history commitments for stateless client work and cross-chain proofs.
  • Canopy: governance (funding model transition).
  • NU5: new shielded protocol (Orchard) without trusted setup, cleaner sighash, canonical encoding.
  • NU6: funding mechanism update.

For every upgrade, the activation height is in zebra-chain/src/parameters/network/ constants and the variant is in network_upgrade.rs.

The Actors​

Electric Coin Company (ECC)​

The original company that launched Zcash. Maintains zcashd (the reference implementation, currently being wound down or transitioned), librustzcash (the cryptographic primitives), lightwalletd (the light-client server), and historically the wallet. Notable people who do or have done foundational work: Sean Bowe (Halo2, Pasta, bellman), Daira-Emma Hopwood (spec editor, protocol designer), Jack Grigg / str4d (Sapling, zcash_primitives), Kris Nuttycombe (librustzcash maintenance), Daira-Emma Hopwood and Madars Virza (historical protocol design).

Zcash Foundation (ZF)​

Non-profit. Maintains Zebra, FROST (threshold signatures), and infrastructure for the broader community. They drive the diversification of the implementation set; Zebra exists so the Zcash network is not single-implementation.

Zcash Community Grants (ZCG)​

Funds independent development from the developer fund. The Zingo/Zaino/Zallet stack, plus academic and tooling grants, flow through here.

Zodl​

Your new organization. As of this writing, ZODL's exact remit and publicly stated mission may be evolving; verify the current scope on the ZODL website and in recent forum posts before assuming any specific responsibility split.

Independent Contributors and External Researchers​

Many ZIPs originate from individuals outside the three main orgs. The ZIP process is open.

How Decisions Get Made​

There is no single body that ratifies protocol changes. The process in practice:

  1. someone (anyone) proposes an idea, usually as a forum post, followed by a draft ZIP submitted to zcash/zips.
  2. the ZIP editors (Daira-Emma Hopwood and a handful of co-editors, list current at the time you read this) review for clarity and completeness.
  3. community discussion happens on the forum, on Discord, and on the ZIP PR.
  4. implementer feedback happens from ECC (zcashd), ZF (Zebra), wallet teams, and others.
  5. the ZIP moves to "proposed" once reasonably stable.
  6. if it is a consensus change, the implementers commit to including it in a specific network upgrade.
  7. on activation, the ZIP becomes "active" and is part of the protocol going forward.

There is no on-chain vote. Adoption is by miner and node operator choice; in practice the implementation set converges because operators want compatibility.

Governance Tensions Worth Knowing​

  • funding model: the funding-stream addresses, payout split, and sunset cadence have been the most-discussed governance topic for years. NU6 set the current configuration. Expect more discussion in NU7 and beyond.
  • proof-of-work transition: Zcash is currently PoW (Equihash). PoS transition has been proposed multiple times. Crosslink is the current concrete proposal; see file 15.
  • wallet UX vs node concerns: the validator side is conservative; the wallet side experiments. Working across the boundary requires patience.

Who to Follow​

  • the zcash/zips PR feed.
  • the Zcash Foundation Discord, especially zebra-dev, protocol-and-data, and the spec channel.
  • the Zcash Community Forum.
  • the ECC and ZF engineering blog feeds.
  • the librustzcash, orchard, sapling-crypto, halo2 GitHub activity.

See Also​

  • 13-reading-the-spec.md (how to use the protocol spec).
  • 14-zips-and-ceremonies.md (the ZIP process up close).
  • 15-nu7-and-future-work.md (current upgrades).
  • book/src/dev/ecc-updates.md (the Zebra-side process for updating ECC dependencies).

Spec Pointers​

Exercises​

  1. List the network upgrades in order and one sentence on what each delivered.
  2. Find the activation height of NU5 on mainnet. Where is it encoded in zebra-chain?
  3. Read one ZIP that has not yet activated and explain in three sentences what it changes.