The team behind Bitcoin scaling solution Core is rolling out its first "franchise protocol," this time designed to add capabilities to privacy-enabling blockchain Zcash. 

Dubbed Z Protocol, the new EVM-compatible Layer 1 blockchain leverages aspects of Core's Bitcoin solution to bolster Zcash. Z Protocol will enable a range of native onchain use cases on Zcash, a privacy-focused fork of Bitcoin that has developed into a wholly independent ecosystem.

Kieran Dennis, co-founder of Z and an initial contributor to Core, told The Block that Z represents the first attempt to bring native EVM capabilities to Zcash. 

"In terms of the competitive space, it's pretty much a white space," Dennis said in an interview. "Zcash kind of brought the solution but not the application layer. Other folks have built out privacy-focused application layers, but they haven't been EVM compatible and haven't been able to get any sort of adoption rom developers or users because of that lack of composability or familiarity."

Z is expected to launch in the second half of 2026, according to the announcement. 

In addition to building Z Protocol itself, the Z team is also building a set of "vertically integrated" financial primitives to seed the ecosystem, Dennis said. This includes a private trading venue, Z Trade, lending and borrowing platform, Z Lend, and private stablecoin USDZ, along with a yield-bearing savings token yUSDZ, among other applications. 

Z offers a default shielded pool and application layer to extend Zcash's functionality. "Once your assets are there, any holding, any sending, any receiving is completely invisible to the outside world," Dennis said. 

The Core Foundation has partnered on the buildout of Z. Under a licensing agreement, a portion of Z transaction fees will flow back to Core and CORE token holders will have "preferential access to some of the Z tokens at launch," Dennis said, noting airdrops are planned. 

"So Core pioneered this consensus mechanism Satoshi Plus, which allows the Core blockchain, which is an EVM compatible L1 to be secured by Bitcoin staking and Bitcoin mining. What we're doing with Z is we're applying that same principle for Zcash Satoshi Plus so that Zcash stakers and Zcash miners can secure Z," Dennis said.

In both cases, the scalable blockchain solutions enable proof-of-work miners on Bitcoin and Zcash to vote for Core or Z validators. Z stakers can also vote for Z validators, with the combined weight from miners and stakers determining what validators end up securing the Z network, Dennis explained. 

Future development

Core has been live since January 2023 with about 90% of the Bitcoin mining hash power participating and no consensus halts, Dennis said. 

Although an independent project, Dennis noted Z has also worked with the Zcash Foundation in some capacity, and would be willing to work with R&D outfits like Electric Coin Company and Zodel. 

Dennis noted a significant part of Z's mission is to enable private AI use cases in crypto. He predicted agents will transact 1,000x more frequently than humans, making them uniquely exposed to surveillance and malicious actors due to data and metadata leakages 

"Privacy is going to be one of the cornerstones of any adopted AI-focused protocols in the future, just by necessity," Dennis said. To that extent, Z provides the tooling and scaffolding that AI bots need to interact with the blockchain "with maximal token efficiency."

"Z is private and fully designed for AI agent interactions, because in the future, we're not going to have to deal with clunky crypto interfaces. It's just going to all be through the command line through our AI agents," Dennis added. "That infrastructure is actually very different from what you would build for a human first blockchain."