The Future of Fiat to Crypto: zkP2P
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The Future of Fiat to Crypto: zkP2P
zkP2P demonstrates multiple possibilities for bringing existing Web2 infrastructure into the blockchain domain.
Navigating Web3 tides with focused insightsAuthor: Turan Vural, Researcher at Fenbushi Capital
As the cryptocurrency ecosystem continues to evolve, the need for seamless and secure fiat-to-crypto onboarding solutions has become increasingly urgent. zkP2P is an innovative peer-to-peer fiat-to-crypto onramp that not only mitigates centralization issues in the onboarding process but also stands as one of the few consumer-facing ZK applications available today—without requiring users to navigate the complexities of Web3.
zkP2P is a peer-to-peer fiat-to-crypto onramp that leverages multiple foundational ZK primitives to add new utility atop existing internet infrastructure. Instead of persuading global payment platforms like Venmo, Alipay, and Revolut to adopt cryptocurrency, zkP2P utilizes the signatures already present in their Web2 systems, making it easier for established fintech platforms to embrace crypto. Users can continue using the online payment systems they know and trust when depositing funds. You can confidently say: “Send me cryptocurrency via Venmo.”
How zkP2P Works
Here’s how a typical zkP2P transaction works—for example, exchanging U.S. dollars (USD) via Venmo for the stablecoin USDC:
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The user requests to receive a specific amount of USDC.
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The system matches the user with a liquidity provider offering the requested exchange rate, facilitating the trade through Venmo.
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The liquidity provider's on-chain funds are held in escrow by the zkP2P smart contract, while the user sends USD to the provider via Venmo.
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The user submits the email receipt of the Venmo transaction to zkP2P (this step can be automated if the user logs into zkP2P using their Google account).
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This action generates two proofs:
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The first proof uses zkEmail to verify that the signature from the Venmo mail server matches the signature on the receipt email, ensuring the authenticity of the message.
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The second proof uses zkRegex to extract relevant information from the receipt email, confirming that the correct amount was sent from the correct sender to the correct recipient.
Once all checks are complete, the escrowed funds are released to the user.
Why zkP2P Matters
zkP2P demonstrates the potential of integrating existing Web2 infrastructure into the blockchain space. It further illustrates how ZK technology can enable new consumer-facing tools across various domains without requiring new relationships or system overhauls.
A Trusted Onramp
For anyone in the Web3 space, this is a well-known challenge. zkP2P addresses both the difficulty of attracting the next wave of future users and compliance with regulatory requirements. By meeting users’ onboarding needs, zkP2P not only reduces the risk of users falling victim to fraudulent onramps but also allows them to transact using their preferred online payment providers. Even if direct regulation of crypto services is lacking, zkP2P remains effective: all major payment providers are already regulated and perform KYC (Know Your Customer) procedures (even Venmo offers protection for certain transactions). This enables zkP2P to genuinely leverage existing regulation for user benefit—an uncommon case in the Web3 world.
Old Friend: IETF (Internet Engineering Task Force)
This is a topic rarely mentioned in Web3 articles. Looking back at the steps above, we see that aside from owning a wallet (a requirement that is evolving with growing support for account abstraction), users never leave their secure Venmo environment. This is thanks to foundational work by the IETF (Internet Engineering Task Force, the open governance body for the internet founded in 1986). RFCs (Requests for Comments—the inspiration behind ERCs) govern the internet in a manner similar to how ERCs operate, featuring comparable open governance processes. ERC 6376, defined in September 2011, established DKIM, making the email authentication signatures relied upon by zkP2P into an internet standard. As a result, every email server signs its messages; thanks to zkEmail, we can now generate proofs of email authenticity. And now, thanks to zkP2P, we can use these signatures—originally designed to prevent eavesdropping—as useful trust mechanisms.
Notably, there is now a newer RFC—RFC 9421—that proposes REST API signing methods analogous to email signatures. This would allow proofs to be generated for any API execution. If the industry adopts this RFC, zkP2P and other aspiring ZK teams will be able to verify any semantically meaningful data sent via API endpoints, no longer needing to rely on email.
Consumer-Facing ZK Applications in Production
Beyond zkRollups, there are currently almost no consumer-facing ZK applications in production. This can be attributed to several equally valid reasons: a lack of ZK builders, insufficient ZK development tools and methodologies, or simply a shortage of use cases that matter to consumers. zkP2P presents a compelling case where, even if ZK itself holds little direct meaning for end users, it significantly enhances the usability of Web3. Without the public key infrastructure and digital signatures underpinning the internet—and privacy-preserving attestation proofs—it would be impossible to create an onboarding path that integrates seamlessly with existing payment systems.
The Future of zkP2P
zkP2P is actively under development. It is currently in public testing (alpha stage), supporting USD via Venmo, INR via HDFC, and TRY via Garanti, with plans to expand support for additional currencies and payment providers (support for EUR and USDC via Revolut was added on May 31). The project is funded by the Fenbushi @fenbushi Research Fund and the Ethereum Foundation, and led by Sachin (0xSachinK on X). Previously at Set Protocol, Sachin built smart contracts managing over $500 million in TVL and received grants from the Ethereum Foundation to develop ZK applications. His team launched zkP2P at ZKHack, a ZK-focused hackathon, where he has also served as a judge.
Learn more:
https://github.com/zkp2p/zkp2p-tlsn-whitepaper/blob/main/zkp2p_tlsn_whitepaper.pdf
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