Building on ZERϴ: ZeroLend

While the ZERϴ Network is still in the testnet, major DeFi protocols are already building to prepare for the mainnet launch. One of these protocols is ZeroLend, the leading L2 lending market. In this post, we dive into what ZeroLend is, what makes it different, and why the team is building on ZERϴ.

What is ZeroLend?

ZeroLend ($ZERO) is a leading lending market with 300 million+ TVL built specifically for Layer-2 networks. 

Based on the battle-tested Aave v3 and powered by Pyth and Chainlink oracles, ZeroLend is currently deployed on ZKSync, Linea, Blast, and Manta. On those networks, ZeroLend is the leading lending platform and one of the top protocols by total value locked (TVL). 

LRT assets

Early on, ZeroLend focused on setting up lending markets for liquid restaked tokens (LRT) such as Renzo’s ezETH or Etherfi’s weETH. 

LRTs are tokenized derivatives representing 1:1 ETH (or another token) staked in a protocol and restaked in another protocol. For example, ezETH represents Renzo’s staked ETH, which is restaked with EigenLayer — so the token earns both an ETH yield and EigenLayer points.

ZeroLend helps you earn even more: 

• Deposit your LRTs and earn a yield from borrowers (relatively safe)
• Borrow against your LRT deposits to get funds for other opportunities (risk varies) 
• Borrow against your own deposits, buy more LRTs, and leverage your yield (more risky)

Currently, ZeroLend supports LRTs by Renzo, Ether.fi, Kelp DAO, and Puffer.

Account abstraction

On ZKsync Era, ZeroLend uses protocol-level account abstraction (AA) to improve user experience. 

For example, you can use any token to pay gas for your ZeroLend transactions on ZKsync. This is done through paymasters.

ZeroLend has other AA-enabled features in the pipeline: 

• Social logins and alternative authentication options 
• Delegated transactions — users will be able to authorize ZeroLend to do some delayed or event-based transactions

These account abstraction features will be pursued on ZERϴ as and when ZeroLend launches on the network. 

What’s possible with ZeroLend on ZERϴ

The Zero network is built with ZK Stack, an open-source framework behind ZKsync Era — one of the L2s where ZeroLend is already deployed. 

This means that everything that is possible on ZKsync, including native account abstraction, will also be possible on ZERϴ. 

Additionally, on ZERϴ, all transactions will be gasless and for Zerion Wallet users they will also be sponsored. As a result, users will be able to manage their ZeroLend portfolio on ZERϴ at no costs. For example, even the smallest balances will be able to claim and compound the yield and rewards on a daily basis or even faster. 

At a later stage, account abstraction and zero gas fees should enable the creation of advanced strategies that can help maximize yield. This can be done, for example, by rebalancing to the more profitable assets or leveraging up and down. 

What’s next for ZeroLend and Zero Network 

During the testnet period, ZeroLend will test and deploy its smart contracts. Currently, ZeroLend is in the process of completing V2, an innovative lending market, which likely be the version that will launch on ZERϴ.

Once the mainnet is live later this year, ZeroLend will likely emerge as the leading liquidity hub on ZERϴ. ZeroLend will also eventually bring its OFT-standard governance token $ZERO on the Zero Network and establish pools with Dexes along with veTokenomics to bolster liquidity for the community on the network. 

If you are planning to build a DeFi product, besides exploring the ZERϴ Network docs, check ZeroLend’s docs to see how you can leverage it as a source of liquidity.

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