Protocol components

Zeru has three main protocol components that empower users to take Zero-Collateral Loans [ZCLs] as pure borrowers without needing to have their capital at stake.

ZScore

At the heart of Zeru is a SoulBound Token [SBT] called ZScore. A user’s ZScore behaves like a TradFi credit score and reflects their onchain activity and creditworthiness. Contributing to Zeru by completing standard DeFi activities such as lending and borrowing will see a user’s ZScore increase.

Protocol Controlled Value Reserve

As protocol-wide DeFi activity continues across Zeru, a small protocol fee will see revenue accrue to the Protocol Controlled Value Reserve [PCVR]. This is a mixed pool of different assets that behaves as an insurance fund and can be called upon to mitigate loan defaults.

Credit Tokens

Each user’s fee contribution to the protocol, ie their share of the PCVR, is represented by Credit Tokens [CTs] and directly specifies the size of their permitted ZCL. A virtuous cycle between ZScore and CTs will see an increase in one result in an improvement in the other, and vice versa.

But as exciting as ZCLs are, there’s much more to Zeru than just borrowing. Read on to see how the magic happens when the power of Zeru’s DeFi ecosystem is unleashed.