FAQs
Frequently asked questions
What is Zeru?
Zeru is a DeFi platform offering zero-collateral loans based on users' on-chain credit scores (ZScore) and credit tokens.
What problem is Zeru solving?
Zeru addresses the over-collateralization issue in DeFi lending, enabling more efficient capital use and broader participation by allowing zero-collateral loans.
What is a zero-collateral loan?
A loan granted without requiring any assets as collateral, based on your ZScore and credit tokens within the Zeru ecosystem.
How do I generate a zero-collateral loan?
We have built an insurance fund consisting of: 1. revenue share from strategies 2. Share of interest from borrowed capital 3. leaderboard participation fees
Zeru uses those fees while backing the zero collateral loan. The actually zero collateral loan comes from the lending pool.
The more you engage with the protocol, the more fees you pay, the more credit tokens you receive, which are the means to get a zero collateral loan.
At no point the amount of your zero collateral loan is higher to the fees you’ve generated.
What is ZScore?
An on-chain credit score reflecting your reputation and activity within Zeru, determining your loan eligibility and terms.
What are credit tokens?
Digital assets representing your share of the protocol's credit reserve, used to secure zero-collateral loans.
What Happens if the Loan is Not Repaid?
If a loan is not repaid on Zeru, several measures are in place to mitigate risks and protect the protocol:
Impact on ZScore: Failure to repay a loan negatively impacts your ZScore, reducing your reputation and borrowing capacity within the Zeru ecosystem. A lower ZScore will make it harder to obtain future loans and may limit access to other protocol benefits.
Credit Tokens: Your share of credit tokens, which are linked to the protocol's credit reserve, will be affected. Non-repayment may result in a reduction of your credit tokens, further limiting your ability to secure zero-collateral loans in the future.
Protocol-Controlled Value Reserve (PCVR): Zeru's PCVR is designed to cover defaults. If a borrower defaults, the PCVR will absorb the loss, ensuring that the overall stability of the ecosystem is maintained.
Loss of Access: Persistent non-repayment may lead to further restrictions, such as loss of access to certain features or privileges within the Zeru ecosystem.
How Do I Generate a Zero-Collateral Loan?
Generating a zero-collateral loan on Zeru involves several steps, primarily focused on building your ZScore and earning credit tokens:
Build Your ZScore:
Engage with Zeru: Participate in the Zeru ecosystem by lending capital, borrowing responsibly, and using the platform's features. Your activities and behavior on the platform contribute to building your ZScore.
Maintain a Good Repayment History: Ensure timely repayment of any loans you take. Responsible borrowing and repayment enhance your ZScore.
Earn Credit Tokens:
Utilize Protocol Features: Engage in Zeru's yield-generating strategies, such as providing liquidity on Uniswap V3 or participating in other DeFi activities within the Zeru ecosystem.
Reinvest Earnings: Reinvest your earnings from these activities to accumulate more credit tokens. Credit tokens represent your share of the protocol's credit reserve.
Apply for a Zero-Collateral Loan:
Check Eligibility: Once you have a sufficient ZScore and credit tokens, you can apply for a zero-collateral loan on the Zeru platform.
Loan Approval: Based on your ZScore and the amount of credit tokens you hold, the loan amount will be determined and granted without the need for additional collateral.
What is the Difference Between Credit Tokens and ZScore?
Generating a zero-collateral loan on Zeru involves several steps, primarily focused on building your ZScore and earning credit tokens:
Build Your ZScore:
Engage with Zeru: Participate in the Zeru ecosystem by lending capital, borrowing responsibly, and using the platform's features. Your activities and behavior on the platform contribute to building your ZScore.
Maintain a Good Repayment History: Ensure timely repayment of any loans you take. Responsible borrowing and repayment enhance your ZScore.
Earn Credit Tokens:
Utilize Protocol Features: Engage in Zeru's yield-generating strategies, such as providing liquidity on Uniswap V3 or participating in other DeFi activities within the Zeru ecosystem.
Reinvest Earnings: Reinvest your earnings from these activities to accumulate more credit tokens. Credit tokens represent your share of the protocol's credit reserve.
Apply for a Zero-Collateral Loan:
Check Eligibility: Once you have a sufficient ZScore and credit tokens, you can apply for a zero-collateral loan on the Zeru platform.
Loan Approval: Based on your ZScore and the amount of credit tokens you hold, the loan amount will be determined and granted without the need for additional collateral.
What is the Difference Between Credit Tokens and ZScore?
Credit Tokens:
Definition: Credit tokens are digital assets that represent a user's share of the protocol's credit reserve.
Purpose: They act as a form of collateral within the Zeru ecosystem, allowing users to obtain zero-collateral loans.
Earning Mechanism: Users earn credit tokens by participating in the platform's yield-generating activities, such as providing liquidity on Uniswap V3, and by repaying loans.
Function: The amount of credit tokens a user holds directly influences their borrowing capacity. More credit tokens mean a higher potential loan amount.
ZScore:
Definition: ZScore is an on-chain credit score that reflects a user's reputation and activity within the Zeru ecosystem.
Purpose: It serves as a measure of a user's creditworthiness and reliability based on their interactions and behavior on the platform.
Building Mechanism: ZScore is built over time through responsible participation in the ecosystem, such as timely loan repayments, lending activities, and other engagements.
Function: A higher ZScore enhances a user's ability to obtain zero-collateral loans and access other benefits within the Zeru ecosystem. It acts as a reputation marker that influences the terms and amounts of loans available to the user.
In Summary:
Credit Tokens are tangible assets earned through specific activities and used directly for securing loans.
ZScore is an intangible reputation score built over time through overall platform engagement, influencing loan eligibility and terms
What is the Uniswap V3 LP Strategy?
Providing liquidity to specific price ranges on Uniswap V3 to maximize capital efficiency and fee earnings.
How do I use the Uniswap V3 LP Strategy?
Select a trading pair, define a price range, provide liquidity within that range, and actively manage your position to optimize returns.
What is the Maxi strategy?
A leveraged strategy that allows users to maximize their returns by using borrowed capital in high-yield DeFi activities within the Zeru ecosystem.
How do I open, update, and close a Maxi position?
Open: Obtain a loan, choose a DeFi strategy, and deploy capital.
Update: Monitor and adjust based on market conditions.
Close: Withdraw earnings, repay the loan, and reinvest profits if desired.
What is the Credit Reserve (PCVR)?
A reserve held by the protocol to cover defaults, ensuring the stability and security of the Zeru ecosystem.
How does the protocol safeguard against defaults?
Through the Credit Reserve (PCVR), impact on ZScore, and potential restrictions on access for persistent defaulters.
How are credit tokens and ZScore different?
Credit Tokens: Tangible assets earned through platform activities, used for securing loans.
ZScore: An intangible reputation score built over time through engagement, influencing loan eligibility and terms.
How do I build my ZScore?
Engage with the Zeru platform by lending capital, borrowing responsibly, and participating in protocol activities.
What are the benefits of a higher ZScore?
Higher loan amounts, better loan terms, and increased access to other protocol benefits.
How do I earn credit tokens?
Participate in yield-generating strategies and repay loans on time to accumulate credit tokens.
Why is Zeru beneficial for both lenders and borrowers?
Lenders earn higher APYs and share in protocol profits, while borrowers can access zero-collateral loans and leverage high-yield strategies.
How is the value of credit tokens determined?
The value of credit tokens is backed by the assets held in the Credit Reserve. Each credit token represents a user's share of the underlying assets in the reserve.
Can credit tokens be transferred or traded?
No, credit tokens cannot be transferred or traded directly. They are tied to each user's account and represent their share of the Credit Reserve.
What happens to my credit tokens if I stop using Zeru?
If you stop using Zeru, your credit tokens will remain in your account. However, if you do not actively participate or repay loans, your ZScore may decrease, impacting your ability to obtain future loans.
How is the Credit Reserve managed and audited?
The Credit Reserve follows the Protocol Controlled Value (PCV) model, where the protocol controls the assets held in the reserve. It is managed by the protocol's smart contracts and is subject to regular audits and transparency measures.
What assets are held in the Credit Reserve?
The Credit Reserve holds a diverse array of assets, including stablecoins, ETH, and other ERC-20 tokens. The specific assets and their proportions may vary over time based on the protocol's strategies and the assets supplied by users.
How often is my ZScore updated?
Your ZScore is updated dynamically based on your interactions and activities within the Zeru protocol, such as borrowing, repaying loans, and participating in other features.
Is there a way to check my ZScore?
Yes, the Zeru platform will provide a way for users to check their current ZScore and track its changes over time.
How is the ZScore formula calculated?
The ZScore formula takes into account various factors, such as the types of assets borrowed and repaid, the repayment ratio (full or partial), the user's share of credit tokens, and other parameters related to the user's behavior and contributions to the protocol.
Can I appeal or dispute my ZScore?
While the ZScore calculation is designed to be transparent and based on on-chain data, there may be mechanisms in place for users to appeal or dispute their ZScore if they believe there are discrepancies.
What are the available loan terms (duration, interest rates, etc.)?
The specific loan terms, such as duration and interest rates, may vary based on the asset being borrowed, market conditions, and the user's ZScore and credit token holdings. More details will be provided within the Zeru platform.
Are there limits on how much I can borrow without collateral?
Yes, the amount you can borrow without collateral is directly tied to your ZScore and the number of credit tokens you hold, which represent your share of the Credit Reserve.
Can I borrow and lend multiple assets simultaneously?
Yes, Zeru supports borrowing and lending multiple assets simultaneously, allowing users to diversify their portfolios and manage their positions more effectively.
How is the interest rate for borrowing determined?
The interest rate for borrowing is determined by various factors, including the asset being borrowed, market conditions, and the risk profile associated with the user's ZScore and credit token holdings.e
What are the risks for lenders in the Zeru protocol?
While the Credit Reserve acts as a buffer against defaults, there are inherent risks for lenders, such as potential smart contract vulnerabilities, market volatility, and the risk of borrowers defaulting on their loans. Lenders should carefully assess these risks before participating.
What other DeFi strategies will be integrated into Zeru?
Zeru plans to integrate various DeFi strategies beyond Uniswap V3 liquidity provision and Maxi trading strategies. These may include restaking, yield farming, and other emerging opportunities in the DeFi space.
How are the strategies curated and managed?
The strategies integrated into Zeru are carefully curated and managed by the protocol's team to ensure they align with the platform's objectives and provide attractive yield opportunities for users.
Can I provide my own custom strategy for integration?
At this time, it is unclear if Zeru will allow users to provide their own custom strategies for integration. More information on this may be provided in the future.
How is the risk of integrated strategies assessed?
The risk of integrated strategies is assessed through a combination of expert analysis, on-chain data monitoring, and community feedback. Strategies deemed too risky or prone to exploits may be excluded from integration.
Are there any fees for using the integrated strategies?
There may be fees associated with using the integrated strategies within Zeru, such as performance fees or platform fees. The specific fee structure will be outlined within the platform.
Has the Zeru protocol been audited by third-party security firms?
Information about third-party audits of the Zeru protocol was not provided in the given context. However, it is a common practice for DeFi protocols to undergo external security audits before launch and regularly thereafter.
What measures are in place to protect users' funds and data?
While specific details were not provided, Zeru likely employs industry-standard security measures, such as secure smart contracts, encrypted communication, and measures to protect user privacy and prevent unauthorized access to funds.
How is the protocol's smart contract code reviewed and updated?
The process for reviewing and updating the Zeru protocol's smart contract code was not specified in the given information. However, it is common for DeFi protocols to have rigorous code review processes and mechanisms for deploying updates and upgrades to their smart contracts.
What contingency plans are in place in case of security breaches or exploits?
The specific contingency plans for security breaches or exploits were not provided. However, it is reasonable to expect that Zeru has measures in place, such as emergency shutdown procedures, incident response plans, and user compensation mechanisms, in case of such events.e
How does ZScore affect my ability to get a zero-collateral loan?
Your ZScore is a metric developed by Zeru to represent your creditworthiness within the protocol. It's built entirely on your activity on Zeru. Higher ZScores indicate better creditworthiness and increase your chances of getting a zero-collateral loan and better loan terms.
What crypto wallets are compatible with Zeru?
Zeru works with popular crypto wallets like MetaMask and WalletConnect. You can find a full list of compatible wallets on the Zeru website.
What is the minimum ZScore required for a zero-collateral loan?
There is no single minimum ZScore requirement for zero-collateral loans. The minimum threshold depends on the loan amount and the specific crypto asset you want to borrow. Higher risk loans (larger amounts or volatile assets) may require a higher ZScore.
How many credit tokens do I need to have for a zero-collateral loan?
Similar to the ZScore requirement, the number of credit tokens required for a zero-collateral loan depends on the loan amount and asset. You can earn credit tokens by repaying loans within Zeru.
How can I improve my ZScore to qualify for a zero-collateral loan?
Deposit and Borrow: First deposit your crypto assets into Zeru's lending pool to earn interest and borrow assets
Repay Loans: Second repay the loan to improve your ZScore. Each successful loan repayment demonstrates your trustworthiness and increases your creditworthiness.
What crypto assets can I borrow with a zero-collateral loan?
Zeru allows you to borrow various crypto assets subject to availability within the protocol. You can check the available options directly on the Zeru app.
What are the repayment terms for zero-collateral loans?
There are no specific repayment terms; you simply need to maintain your health factor above 1.
Can I use my borrowed crypto for anything besides holding it?
Yes! Zeru allows you to use your borrowed crypto in various ways within the ecosystem. You can invest it in DeFi strategies offered by Zeru to potentially earn returns while repaying your loan.
How can I ensure the security of my crypto assets while using Zeru?
Zeru implements security measures to protect user funds. However, it's important to practice general crypto security best practices, such as using a strong wallet password and avoiding connecting your wallet to untrusted websites.
Can I use Zeru's DeFi strategies with borrowed funds?
Yes! Zeru allows you to take leverage and deploy it to DeFi strategies using borrowed funds
Can I use Zeru's DeFi strategies with deposited funds?
Yes! Zeru allows you to take leverage and deploy it to DeFi strategies using deposited funds receipts called z-tokens.
Can I use Zeru's DeFi strategies with credit funds?
Yes! Zeru allows you to take leverage and deploy it to DeFi strategies using credit funds
Can I trade or transfer credit tokens?
No, credit tokens are non-transferable and cannot be traded or transferred between users. They are soul-bound to individual accounts, emphasizing the importance of maintaining a good ZScore and reputation.
Can I use credit tokens for other purposes besides borrowing?
Currently, credit tokens primarily serve as collateral for zero-collateral loans within the Zeru ecosystem. However, future developments may introduce additional functionalities for credit tokens, expanding their utility within the protocol.
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