🪙Tokenization

Understanding how Zero-Coupon Bonds can be tokenized as ERC20 tokens in the Fixed-Rate Lending Protocol

Overview

Our protocol allows Zero Coupon Bonds (Lending positions) to be tokenized as ERC20 standard tokens, which is called ZCToken, and withdrawn from the platform. This tokenization enables greater flexibility for users, allowing them to transfer their lending positions to other wallets or potentially trade them on secondary markets.

How It Works

The tokenization process involves converting lending positions into standard ERC20 tokens that can be withdrawn from the platform and later redeposited if desired. There are two main flows in this process:

Token Withdrawal Flow

When a user wants to withdraw their lending position as a token:

ZC Token Minting Process

Token Deposit Flow

When a user wants to deposit their ZC token back into the platform:

ZC Token Burning Process

Token Types

Each ZC token has a maturity, but if the maturity is 0, it becomes a ZC perpetual token. Generally ZC tokens are minted from FutureValueVault but ZC perpetual tokens are minted from GenesisValueVault. Please check the Genesis Value page for the reference.

Token Naming Conventions

ZC Token Names and Symbols (example as March 2024 expiry):

Asset	ZC Token Name	ZC Token Symbol	ZC Perpetual Token Name	ZC Perpetual Token Symbol
ETH	ZC ETH MAR2024	zcETH-2024-03	ZC ETH	zcETH
WBTC	ZC WBTC MAR2024	zcWBTC-2024-03	ZC WBTC	zcWBTC
USDC	ZC USDC MAR2024	zcUSDC-2024-03	ZC USDC	zcUSDC
axlFIL	ZC axlFIL MAR2024	zcaxlFIL-2024-03	ZC axlFIL	zcaxlFIL

Metamask Symbol Name Convention (max 11 chars, example as March 2024 expiry):

Asset	ZC Token Name	Metamask Symbol
ETH	ZC ETH MAR2024	zcETH24M
WBTC	ZC WBTC MAR2024	zcWBTC24M
USDC	ZC USDC MAR2024	zcUSDC24M
axlFIL	ZC axlFIL MAR2024	zcxFIL24M
FIL	ZC FIL MAR2024	zcFIL24M

Month abbreviations: MAR = M; JUN = J; SEP = S; DEC = D

Key Parameters

Parameter	Description	Value
Token Standard	The token standard used for ZC tokens	ERC20
Token Decimals	Number of decimal places supported by ZC tokens	18
Maturity Format	How maturity is represented in token names	MMMYYYY (e.g., MAR2024)
Symbol Format	Format for token symbols	zc[ASSET]-YYYY-MM
Metamask Symbol Format	Shortened format for Metamask display	zc[ASSET]YYM
Perpetual Token Maturity	Maturity value for perpetual tokens	0
Minting Source (ZC Tokens)	Contract that mints standard ZC tokens	FutureValueVault
Minting Source (Perpetual)	Contract that mints perpetual ZC tokens	GenesisValueVault

Examples

Example 1: Withdrawing a Lending Position as a ZC Token

Alice has lent 1,000 USDC in the JUN2025 market and wants to transfer this position to another wallet:

1. Alice navigates to the "My Positions" section in the protocol interface

2. She selects her 1,000 USDC lending position in the JUN2025 market

3. She clicks "Withdraw as Token" and confirms the transaction

4. The protocol mints a "ZC USDC JUN2025" token (zcUSDC-2025-06) to Alice's wallet

5. The token represents Alice's right to receive 1,000 USDC plus interest at maturity

6. Alice can now transfer this token to any other Ethereum wallet

Example 2: Depositing a ZC Token Back into the Protocol

Bob has received a "ZC ETH SEP2024" token from a friend and wants to manage it within the protocol:

1. Bob navigates to the "Deposit" section in the protocol interface

2. He selects the "Deposit ZC Token" option

3. He selects his "ZC ETH SEP2024" token from his wallet

4. He confirms the transaction

5. The protocol burns the ZC token and credits Bob's account with the corresponding lending position

6. Bob can now view and manage this position within the protocol interface

Example 3: Using ZC Perpetual Tokens

Charlie wants to create a more flexible lending position that isn't tied to a specific maturity:

1. Charlie deposits 5 ETH into the GenesisValueVault

2. The protocol mints "ZC ETH" perpetual tokens (zcETH) to Charlie's wallet

3. These tokens represent a standardized lending position without a fixed maturity date

4. Charlie can transfer these tokens to other users or use them in other DeFi protocols

5. When Charlie wants to redeem the underlying value, he can deposit the tokens back into the GenesisValueVault

Common Questions

What is the difference between ZC tokens and ZC perpetual tokens?

ZC tokens have a specific maturity date (e.g., ZC ETH MAR2024) and represent a lending position that will mature on that date. ZC perpetual tokens (e.g., ZC ETH) do not have a specific maturity date and represent a standardized lending position that can be redeemed at any time. ZC tokens are minted from the FutureValueVault, while ZC perpetual tokens are minted from the GenesisValueVault.

Can I trade ZC tokens on secondary markets?

Yes, ZC tokens are standard ERC20 tokens that can be transferred to any Ethereum wallet and potentially traded on secondary markets or used in other DeFi protocols. However, the liquidity of these tokens on secondary markets may vary depending on market conditions and the specific token.

What happens to my ZC token at maturity?

When a ZC token reaches its maturity date, it can be redeemed for the underlying asset plus any accrued interest. The protocol will handle the redemption process when you deposit the token back into the platform. Alternatively, if you participate in Auto-Rolling, your position can be automatically rolled over to a new maturity.

How do I add ZC tokens to my Metamask wallet?

ZC tokens should appear automatically in your Metamask wallet after they are minted. However, if they don't appear, you can add them manually:

1. Click "Import tokens" in Metamask

2. Enter the token contract address (available from the protocol interface)

3. The token symbol and decimals should auto-populate

4. Click "Add Custom Token"

Note that Metamask has a character limit for token symbols, so the symbols may appear slightly different (e.g., "zcETH24M" instead of "zcETH-2024-03").

Can I partially withdraw my lending position as a ZC token?

Yes, you can withdraw any portion of your lending position as a ZC token. The protocol will mint tokens representing the exact amount you choose to withdraw, and the remaining portion will stay in your account within the protocol.

Related Resources

• Standardization

• Zero-Coupon Bonds

• Order Book System

• Genesis Value

• Auto-Rolling