Zcash Shielded Escrow

Argus uses Zcash shielded transactions for maximum-privacy HUMINT payments. This document covers the escrow system architecture.

Overview

For high-risk sources, transparent blockchain payments create a dangerous paper trail. Even if we don't know who the source is, an adversary can see "someone received payment from Argus" and investigate further.

Zcash shielded transactions (z-addresses) solve this by hiding:

• Sender (Argus escrow pool)
• Receiver (source's z-address)
• Amount (payment size)

Architecture

Consumer pays (USDC/NEAR/etc)
         ↓
    1Click API
         ↓
Transparent ZEC → Argus t-address
         ↓
    Shield operation (t→z)
         ↓
    Shielded escrow pool (z-address)
         ↓
    z→z payout to source

Flow Details

1. Consumer Payment: Consumer pays for bounty/subscription in any supported currency
2. 1Click Conversion: NEAR Intents converts to ZEC, deposited to our transparent address
3. Shielding: We move ZEC from t-address to our z-address (shielded pool)
4. Escrow Hold: Funds held in shielded pool until release conditions met
5. Shielded Payout: z→z transfer to source's z-address - completely private

Addresses

Type	Address	Purpose
Transparent (t-addr)	t1L5D4HtBGFgkKQGL7AMH8613sUPd4Mt6ek	Receiving 1Click deposits
Shielded (z-addr)	zs1e0jxyugqem4sg...	Escrow pool for payouts

Bounty Escrow

When a bounty is posted:

1. Creator deposits funds (converted to ZEC via 1Click)
2. ZEC is shielded into escrow pool
3. Bounty status: open → funds locked

When bounty is fulfilled:

1. Source submits intel that satisfies bounty
2. Creator (or crowd) verifies submission
3. If accepted: escrow releases z→z to source
4. If rejected: escrow returns to creator

// Example bounty payout
const result = await processBountyPayout(bountyId);
// Returns: { success: true, operationId: 'opid-xxx' }

Subscription Escrow

For recurring subscriptions:

1. Subscriber pays monthly fee
2. Converted to ZEC and shielded
3. Released to source at end of billing period
4. Automatic renewal or cancellation

Privacy Levels

Method	Privacy	Use Case
z→z (shielded)	Maximum	High-risk sources
t→z (shielding)	High	Incoming deposits
t→t (transparent)	Low	Not used

Operational Security

For Sources

• Always use z-addresses (start with zs1)
• Never reuse addresses - generate new for each source
• Create offline if in hostile environment
• Don't mix with personal wallet activity

For Argus

• Shield incoming funds promptly
• Batch shield operations when possible
• Monitor escrow balance
• Rotate addresses periodically

API Endpoints

# Get escrow status
GET /api/escrow/status

# Shield incoming ZEC (admin)
POST /api/escrow/shield

# Process bounty payout (admin)
POST /api/escrow/bounty/:id/release

Configuration

Required environment variables:

ZCASH_RPC_URL=http://127.0.0.1:8232
ZCASH_RPC_USER=argus_zcash
ZCASH_RPC_PASS=<secret>
ZCASH_T_ADDRESS=t1L5D4HtBGFgkKQGL7AMH8613sUPd4Mt6ek
ZCASH_Z_ADDRESS=zs1e0jxyugqem4sg...

Node Requirements

• zcashd v6.x or later
• ~30GB disk for blockchain
• 4GB RAM recommended
• Sapling parameters downloaded

Recovery

The wallet recovery phrase is stored securely. In case of server loss:

1. Install zcashd on new server
2. Restore from 24-word phrase
3. Rescan blockchain
4. Resume operations

⚠️ Never share the recovery phrase. It controls all escrow funds.