In DeFi, we’ve become accustomed to the idea of “wrapping” a token – taking a digital asset, locking it into a smart contract, and then issuing a new asset with additional functionalities to use in its place.
Wrapped tokens in Panther are near-perfect, 1-to-1 representations of the original asset. For example, one wBTC token on the Ethereum blockchain is equal in value to one BTC on the Bitcoin blockchain even though the two operate on different protocols. Panther builds upon this idea to enable the creation of shielded digital assets or tokens that are infused with privacy, called zAssets. These are 1-to-1 collateralized, untraceable digital tokens that harness the power of zero-knowledge proofs to give the user full control over what information is disclosed about their transaction history.
Right now, if a user wants to send a large amount of USDC from their wallet to a DeFi protocol, they run the risk of being attacked or front-run in transit. Using Panther, however, the process is far safer and more discreet:
First, the user deposits USDC into a Panther Vault smart contract, which mints the corresponding amount of zUSDC from within a Panther Pool smart contract. The user can then transact with zUSDC in any way they may want to, with the full benefits of enhanced privacy. When a user’s transactions are complete and they want to redeem zUSDC for the original underlying currency, their collateralized USDC is sent to a new stealth address and the corresponding zUSDC is burned and removed from circulation.