☑️Minting

Why would I mint zbrUSD?

ZEBRA protocol's no-interest loans are much more capital efficient than other lending protocols. Less collateral is needed for the same loan amount. Instead of selling your ZETA/LSDs , you can lock up your LSDs as collateral on and mint zbrUSD against that collateral. Then repay the loan later on.

For example, ZETA bulls can leverage their LSDs positions up to 4.33x by minting zbrUSD, which amplifies their LSDs exposure and potential gains. It works cause you can borrow zbrUSD with collateral, swap that zbrUSD for more LSDs, and repeat the process.

Not financial advice: Leverage can 4.33x gains but also 4.33x losses. Use with caution if you're experienced with leveraging crypto positions.

What means collateral?

Collateral essentially means an asset that is used as a guarantee that the borrower will repay the loan. If the borrower fails to repay the loan, the lender can seize the collateral to recover some of their losses.

In the case of ZEBRA Protocol, LSDs are used as collaterals. Users deposit a certain amount of assets into the protocol as collateral in order to take out a loan in the form of zbrUSD. If the borrower fails to repay the loan, the protocol would liquidate the deposited collateral to cover the loan amount.

The amount of collateral required depends on the loan-to-value (LTV) ratio. ZEBRA Protocol allows borrowers to leverage their crypto positions up to 4.33x, meaning for every 1 LSD deposited as collateral, they can borrow up to 4.33x zbrUSD worth of LSD.

How is the minting fee calculated?

The minting fee on ZEBRA Protocol is calculated as follows:

1. There is a baseRate that determines the percentage fee, ranging from 0.5% to 5%.

2. The baseRate is adjusted algorithmically based on the last redemption time. If more redemptions are happening (zbrUSD is trading below $1), the baseRate will trend upwards. If fewer redemptions are happening (zbrUSD is trading above $1), the baseRate will trend downwards.

3. The baseRate percentage is applied to the amount of zbrUSD minted to determine the minting fee amount.

4. The minting fee and annual fee is added to the borrower's total debt. So the total debt after the fee would be:

   • Total Debt = zbrUSD minted + Minting fee + Annual fee

5. Annual fee is the cost of your debt over time.

For example:

• baseRate = 0.5%

• AnnualFeeRate = 1.5%

• zbrUSD minted = 1,000

• Minting fee = 0.5% of 1,000 = 5 zbrUSD

• Total debt right after the mint = 1,000 zbrUSD(minted) + 5 zbrUSD(fee) + 0 Annual fee = 1,005 zbrUSD

• Total debt after 1 year = 1,000 zbrUSD(minted) + 5 zbrUSD(fee) + 1.5%*1,000 Annual fee = 1,006.5 zbrUSD

How can I mint zbrUSD ?

To mint zbrUSD, users should:

1. Open a Trove - This is like a borrower account on ZEBRA Protocol.

2. Deposit LSDs as collateral - Users deposit assets into their Trove to use as collateral for the loan.

3. Mint zbrUSD - Once collateral is deposited, users can once draw up to c.a. 77% of the deposited assets value in zbrUSD.

4. Minimum debt - There is a minimum loan size of 10 zbrUSD to open a Trove.