Participants
These are vault investors, claiming a senior tranche position to all instruments attached to the vault. They do so by minting vault shares.
Set and forget yield: These participants will be able to earn set and forget yield from instruments that are hard to assess.
Exposure to new types of yield: The underwriting mechanism unlocks new yield sources(such as NFT-lending for any NFTs).
Automatically Insured: Their investments are also provided with a first-loss buffer from stakes provided by the managers.
Risk Customizability: Minting a vault automatically gives an LP uniform exposure to all senior tranches of the attached instruments. However, they can also specify which instruments they want to lever up on, or which instruments they want 0 exposure to. (in the backend, if they want to lever up on a specific instrument they will buy longZCB. If they want to hedge on a specific instrument they will buy shortZCB).
Liquidity Providers can also directly invest in a specific lending pool without investing in its tranche.
These agents are responsible for assessing the risk-reward of to-be-added lending pools or creditlines by claiming a junior tranche position to these instruments. They do so by buying longZCB to realize profit by redeeming at a later date.
Managers essentially buy longZCB to 'yield farm with leverage' on a specific lending pool or creditline. They borrow capital from the vault, and the interest paid to the LPs is the 'senior tranche' portion of the returns.
Amplified Yield: Redemption prices of longZCB tokens are set such that they represent leveraged exposure to these instruments.
Reputation system: A stronger track record will allow a manager to be more profitable with his longZCB. A stronger track record also allows a manager to be able to borrow more from the vault, thereby having more 'capital allocation power'. More info on underwriting system here.
Borrow against anything, at a market-driven fair cost: Borrowers with arbitrary collateral X can borrow instantly from one of our lending pools that accepts X. If none of the lending pools support asset X then the borrower can either propose a custom credit line or create a new lending pool for X.
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