Zcash Developer Proposes Quantum-Resistant Fix for Shielded Swap Privacy

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Zcash developer Zakura has proposed one-time viewing keys to protect shielded swaps from quantum attacks. The fix, detailed by Adam Tucker, avoids the need for a network upgrade and targets privacy gaps in NEAR Intents. Josh Swihart of Zcash Open Development Lab said $600 million to $700 million had moved through the route by May. Wallets using Zakura’s code, like Vizor, may adopt the change soon. Inflation data remains a key concern for crypto markets, with privacy-focused assets under scrutiny. Hardware wallets are expected to follow the update later this year.

Zcash full node developer Zakura has proposed one-time viewing keys to prevent future quantum computers from linking users' shielded payments. Zakura developer Adam Tucker described the proposal in an engineering post announced on Sunday. Zakura said the approach requires no network upgrade.

Zcash's shielded transactions hide the sender, recipient and amount. Each shielded account has one incoming viewing key behind all account addresses, which the wallet uses to find and decrypt payments. A classical computer cannot recover that key from an address. However, the post says a sufficiently powerful quantum computer running Shor's algorithm could recover the key. The post says the attacker could then see the value and memo of every payment the account has received and link those payments. Tucker warned that a single published shielded address creates this exposure until Tachyon, a proposed Zcash scalability upgrade, ships. Zcash developers say Tachyon would also deliver full post-quantum privacy.

The post identifies swaps through NEAR Intents, a cross-chain swap service, as the biggest risk. Each swap out of ZEC publishes one of the user's shielded addresses on NEAR's public chain as a refund address, even without a refund. The addresses look different but belong to the same account, so breaking one would expose all account addresses. Zcash Open Development Lab CEO Josh Swihart said around $600 million to $700 million had flowed through Zcash's NEAR Intents route by May.

Zakura's proposed fix derives a separate incoming viewing key for each address that must be published, while leaving the account's spending key unchanged. Under the proposal, a quantum attacker who breaks one published address would learn only about payments to that address. Tucker said the attacker would not be able to link the published swap address to any other transaction. The proposed wallet uses private information retrieval to look up NEAR payouts and prevent the extra keys from slowing restoration from a seed phrase. Private information retrieval lets a wallet query a server without revealing which addresses the wallet is querying.

The proposal follows Zakura's plan for quantum-safe transparent addresses earlier this month, which also uses private information retrieval. That plan said post-quantum signature opcodes were expected in Zcash in January. Swihart said in May that Zcash was aiming for full post-quantum status within 12 to 18 months. Concern over crypto wallet cryptography is growing. Ethereum Foundation researcher Justin Drake and Ethereum co-founder Vitalik Buterin have warned that artificial intelligence could break the cryptography before quantum computers do.

The post says software wallets using Zakura's open-source libraries, such as Vizor, will be able to integrate the one-time viewing keys in the coming weeks. The post says hardware wallets will follow once hardware wallet firmware supports the feature. Decrypt data showed ZEC trading at $1,165 on Monday morning, up 3.6% on the day.

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