Integrating stZETA

Overview

Utilizing stZETA as Collateral

Staking ZETA tokens to receive stZETA has several advantages when used as collateral within the DeFi ecosystem:

• Stability Comparable to Ether: stZETA's value is designed to closely track Ether, except in extreme circumstances, providing a stable collateral option.

• Yield-Generating: As stZETA accrues staking rewards, it effectively reduces borrowing costs by generating a yield on the collateral itself.

• High Liquidity: stZETA boasts significant liquidity, with vast amounts locked in liquidity pools, facilitating large transactions without substantial price impact.

For integration into money markets, reliable price feeds are crucial. Chainlink is set to provide stZETA/USD feeds on the ZetaChain, maintaining the industry standard for price accuracy and reliability.

Wallet Integration

Zearn has been smoothly integrated with major DeFi wallets such as Ledger, MyEtherWallet, and ImToken. This integration means users can stake directly within these wallet interfaces, enhancing the user experience.

Furthermore, Zearn DAO has established a referral program to incentivize wallets and apps that direct liquidity to its staking protocol. Interested partners should reach out to the Zearn business development team to discuss eligibility for the referral program.

When incorporating stZETA into wallets, it's crucial to account for its rebasing characteristic. Wallets should avoid caching stZETA balances for long periods (over 24 hours) since balances can change without transactions due to rebasing.

Liquidity Mining

Details on liquidity mining programs with stZETA will be announced in the near future.

Recognizing Risks

• Smart Contract Security: There's an inherent risk of a vulnerability within Zearn smart contracts. However, the code is open-source, audited, and backed by a comprehensive bug bounty program to minimize this possibility. Audit reports are publicly available for review.

• Slashing Risks: Validators on the chain face the risk of penalties, including the potential loss of all staked funds in case of failure. Zearn diversifies stakes across various professional node operators and employs self-insurance mechanisms to mitigate this risk.

• stZETA Price Volatility: There is the risk of stZETA trading at prices below its intrinsic value due to withdrawal constraints within Zearn, which can hinder arbitrage and market-making activities. The Zearn DAO is actively working to manage and, if possible, eliminate these risks, but they are inherent and must be transparently communicated to users.