The Core Foundation, the team behind the Bitcoin scaling solution Core, is launching its first "franchise protocol" in partnership with the Z Protocol team. This new project, dubbed Z Protocol, is an EVM-compatible Layer 1 blockchain designed to add native smart contract capabilities and an application layer to the privacy-focused Zcash blockchain for the first time.
Z Protocol leverages Core's Satoshi Plus consensus model, which allows the blockchain to be secured by both stakers and proof-of-work miners. In this case, Zcash stakers and miners will be able to vote for and secure the Z network. This model has been proven on the Core blockchain, which has been live since January 2023 with about 90% of Bitcoin's mining hash power participating.
Co-founder Kieran Dennis described the move into Zcash's ecosystem as targeting a "white space," noting that while Zcash provided privacy technology, it lacked a developer-friendly, EVM-compatible 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 from developers or users because of that lack of composability or familiarity," Dennis said.
The protocol is scheduled to launch in the second half of 2026 and will include a suite of vertically integrated financial applications to seed its ecosystem. These primitives include a private trading venue called Z Trade, a lending and borrowing platform named Z Lend, and a private stablecoin, USDZ, alongside a yield-bearing savings token, yUSDZ.
A key feature is Z Protocol's default shielded pool, which ensures that "any holding, any sending, any receiving is completely invisible to the outside world," according to Dennis. Under a licensing agreement, a portion of Z transaction fees will flow back to the Core Foundation, and CORE token holders will have "preferential access to some of the Z tokens at launch," with airdrops planned.
Looking ahead, Dennis highlighted that a significant part of Z's mission is to enable private AI agent interactions on-chain. He argued that privacy will be a cornerstone for AI-focused protocols, and Z is designed to provide the infrastructure for AI bots to interact with the blockchain "with maximal token efficiency." The Z team has expressed willingness to work with established Zcash entities like the Zcash Foundation, Electric Coin Company, and Zodl, though the project is independent and no collaboration is currently confirmed.
