zAssets

Zero-Knowledge Assets

Status	Entrypoint
In development on testnet	zAccount

TL;DR

• zAssets represent digital assets as UTXOs

• ZK proof of UTXO activity are written on-chain

• This mechanism enables privacy-enhanced trading

Introduction

zAssets are 1:1 representations of digital assets deposited by users into Shielded Pools. It is the zAsset that confers much of the Protocol's privacy-enhancing features.

When users deposit their assets into a Panther Shielded Pool, they essentially convert their regular tokens or assets into zAssets, to be managed within Panther’s zero-knowledge layer.

Deposit

When a user deposits a digital asset into the Panther Vault via their Panther account, a UTXO (Unspent Transaction Output) is generated to represent that asset — the zAsset.

The Protocol uses ZK-SNARK (Succinct Non-Interactive Argument of Knowledge) proofs to store UTXO data on-chain. This allows a user’s on-chain state to be stored privately and to ensure private state changes.

This means that the zAsset data that represents the original digital asset on-chain is both condensed and encrypted. Asset balances and balance changes are not publicly available should a Panther account address become known to an observer.

Withdraw

Users can withdraw their zAssets back into their original form whenever needed. When they do so, the UTXO that represented the underlying asset is "spent".

Transfer

zAssets are fully collateralized by the underlying tokens that users deposit through UTXO ownership. The ownership of those zAssets can be transferred through in-pool UTXO transactions, which represent the ability to convert zAssets back into native assets on the Pool’s underlying blockchain network.

zAssets enhance privacy

The observable data that results from a trade is that a UTXO was committed to the smart contract. Only the owner of the UTXO can decrypt the ZK-proof and ascertain the value and token that the UTXO represents.

Which asset classes are supported?

Panther's Shielded Pools support the following asset classes:

• ERC-20 (including some variants like ERC-404)

• ERC-721

• ERC-1155

Which assets may be deposited are determined by the Zone Manager.

This allows different Zones to support different asset sets, which will enable Zone Managers to determine what assets they support according to risk profiles, state laws, and other considerations.

DAO-approved assets

The Panther DAO can propose assets for allowlisting at any time since allowlisting an asset requires a manual configuration. For the Protocol’s first release, Panther will probably launch supporting the following assets:

Stablecoins

• USDC

• USDT

• DAI

Other tokens

• wETH

• wBTC

• MATIC

• CRV

• LINK

These tokens represent the largest DEX flow on Polygon and, as such, can aid Panther’s goal of bootstrapping its privacy through user activity. Further integrations can then be leveraged as activations on their own and help the Protocol’s organic growth by engaging the communities associated with them.

What next?

zAccounts are represented by UTXOs, so it's worth taking time to understand our unique UTXO model.