Overview
Zoo Finance is a native structured asset protocol on Berachain, offering innovative and capital-efficient liquidity solutions. By depositing assets into Zoo’s vaults, users can access a variety of financial instruments tailored to different needs. There are two types of vaults: the Liquidity Vault (L-Vault) and the Bribe Vault (B-Vault), each serving distinct purposes.
Key Features
- Liquidity Vault (L-Vault): The L-Vault allows users to deposit assets and receive a stablecoin, ZUSD, and Margin Tokens (MT). ZUSD is a rebasable, interest-bearing stablecoin, generating earnings through financing interest paid by holders of margin tokens. Margin Tokens provide leveraged exposure to the underlying assets, enabling greater gains during a bull market.
- Bribe Vault (B-Vault): Depositing assets into the B-Vault yields Principal Tokens (PT) and Yield Tokens (YT). The Principal Token represents ownership of the underlying assets, granting holders automatic returns denominated in the base currency. The Yield Token reflects all real-time yields generated by the underlying assets, providing the opportunity for holders to earn additional Bribe rewards.
- Pooled Collateralized Debt Position (CDP)
- Asset Adequacy Ratio (AAR): The protocol employs the Asset Adequacy Ratio to gauge the health of the vault. A heightened AAR diminishes the leverage ratio applicable to margin tokens, while a diminished AAR indicates potential debt repayment risks associated with ZUSD. Maintaining the AAR balance is crucial for the system's stability.
Why Choose Zoo Finance?
- Capital Efficiency: Zoo Finance's innovative vault structures allow users to maximize asset utilization, providing both stable returns and leveraged exposure without the need for individual liquidations.
- Diverse Financial Instruments: By offering both Liquidity and Bribe Vaults, the platform caters to various investment strategies, from stablecoin holdings to yield optimization through bribe rewards.
- Enhanced Liquidity: The protocol's design strengthens the overall liquidity of the Berachain network, opening up new financial products and strategies for users, thus driving greater engagement and adoption within the ecosystem.
FAQs
1. What is Zoo Finance?
Zoo Finance is a native structured asset protocol on Berachain, providing innovative and capital-efficient liquidity solutions through its Liquidity and Bribe Vaults.
2. How does the Liquidity Vault (L-Vault) work?
Users deposit assets into the L-Vault to mint ZUSD and Margin Tokens. ZUSD is a rebasable, interest-bearing stablecoin, while Margin Tokens offer leveraged exposure to the underlying assets.
3. What are Principal Tokens (PT) and Yield Tokens (YT)?
In the Bribe Vault (B-Vault), depositing assets yields PT and YT. PT represents ownership of the underlying assets with automatic returns, while YT reflects real-time yields and provides opportunities for additional bribe rewards.
4. How does Zoo Finance maintain vault health?
The protocol uses the Asset Adequacy Ratio (AAR) to assess and maintain the health of its vaults, ensuring stability and optimal leverage ratios.
5. What is the Pooled CDP mechanism?
Zoo Finance aggregates individual vaults into a pooled Collateralized Debt Position, allowing for collective debt acknowledgment and eliminating the need for singular liquidations.
