ZeroLend Questions Answered
Everything you need to know about lending, borrowing, staking, and protocol mechanics on ZeroLend. For a broader overview, visit the homepage or read more on the about-us page.
What is ZeroLend and how does it differ from other lending protocols?
ZeroLend is a non-custodial liquidity protocol built primarily on Layer 2 networks. Unlike many first-generation lending protocols that focus only on blue-chip tokens, ZeroLend's protocol supports exotic and long-tail assets — things like liquid staking tokens, restaking derivatives, and newer ERC-20 assets that don't fit neatly into legacy risk frameworks. The protocol runs permissionless lending markets where depositors earn interest and borrowers access liquidity. It launched publicly in 2023 and has since expanded across multiple networks including Linea, zkSync Era, and others.
How do I start lending on ZeroLend?
Connect a compatible wallet — MetaMask, WalletConnect, or any EIP-4844-compatible provider — and navigate to the Markets section. Choose an asset, enter the amount you want to deposit, and confirm the transaction. Your deposit immediately begins accruing interest at the current variable rate. Rates shift based on pool utilization; when more borrowers draw from the pool, lenders earn more. There is no minimum deposit amount.
What assets can I borrow on the ZeroLend platform?
Borrowable assets depend on the specific market you choose. Major stablecoins like USDC and USDT are available across most markets. ETH and WBTC are also supported. Beyond those, ZeroLend offers markets for a range of exotic tokens — restaked assets, governance tokens, and network-native assets. Each market lists the available collateral types and their respective loan-to-value (LTV) ratios, so you always know exactly how much you can borrow against a given position.
Is ZeroLend safe? Has the protocol been audited?
ZeroLend has undergone multiple third-party security audits. Smart contract code is open source and available on GitHub. The protocol inherited its core architecture from the Aave V3 codebase, which itself has been extensively reviewed. That said, no DeFi protocol is entirely risk-free. Liquidation risk, oracle failure, and smart contract bugs are real concerns in any on-chain system. The team behind ZeroLend publishes audit reports publicly, and a bug bounty program is active.
What is the ZERO token and why does it matter?
ZERO is the native governance and utility token of ZeroLend. Holders can stake ZERO (or ZERO/ETH LP tokens) to receive veZERO, a vote-escrow token. veZERO grants voting rights in protocol governance, a share of protocol revenue, and eligibility for future token emissions or airdrop allocations from partner protocols. Unlike simple staking models, the vote-escrow design — used by protocols like Uniswap governance experiments — aligns long-term holders with protocol health. ZERO is also used in incentive programs for lenders and borrowers.
How does the staking mechanism work on ZeroLend?
You can stake either raw ZERO tokens or zLP tokens — the ZERO/ETH liquidity pool token. Both convert to veZERO upon staking. veZERO is non-transferable and represents your locked position. In return, you receive protocol revenue distributions, token emissions, and governance influence. There is also an integration with StakeDAO: sdZERO holders get equivalent veZERO benefits but with added liquidity, since sdZERO can be traded on secondary markets. The lock duration affects your veZERO balance — longer locks yield more.
Which blockchain networks does ZeroLend support?
ZeroLend is deployed on several Layer 2 and Layer 3 networks. Linea is a primary deployment. zkSync Era, Blast, Manta, and others are also supported — the full list is visible in the Markets section of the app. Each network has its own liquidity pool and market conditions. Fees on L2s are substantially lower than Ethereum mainnet, which is a core part of the protocol's value: borrowers and lenders can interact frequently without gas costs eating into returns.
Can I use ZeroLend if I hold liquid staking tokens like stETH or ezETH?
Yes. This is one of ZeroLend's defining features. The protocol specifically built markets for liquid staking tokens (LSTs) and liquid restaking tokens (LRTs). You can deposit stETH, wstETH, ezETH, weETH, and similar assets as collateral. Borrowing against these positions lets you run carry trades — for example, depositing a yielding LST, borrowing a stablecoin, and deploying that stablecoin elsewhere to stack returns. Looping strategies are common and the UI includes tooling to simplify them.
What happens if my collateral value drops — will I get liquidated?
Yes, liquidation is triggered when your health factor falls below 1.0. The health factor is a real-time ratio comparing your collateral's value (adjusted by its liquidation threshold) to your outstanding debt. If prices move against you and the ratio drops, a liquidator can repay part of your debt and claim a portion of your collateral at a discount. To avoid this, monitor your health factor regularly and consider repaying debt or adding collateral during periods of high volatility. The dashboard shows your current health factor at all times.
Why should I use ZeroLend instead of a centralized exchange lending product?
Non-custodial. That's the short answer. Centralized platforms hold your assets — if they fail, get hacked, or freeze withdrawals, you have no direct recourse. ZeroLend's protocol never takes custody. All transactions happen on-chain, governed by smart contracts. You control your private keys at every step. Beyond that, the ZeroLend platform often offers competitive rates because it operates algorithmically — there's no intermediary clipping margins. And unlike CeFi products, positions are visible and verifiable by anyone.
How does interest rate pricing work on ZeroLend?
Interest rates are determined algorithmically by a utilization curve. Each market has a target utilization ratio (typically around 80%). Below that target, rates rise gradually as more capital is borrowed. Above the target, rates increase steeply — this discourages excess borrowing and incentivizes lenders to deposit more. The model is similar to what Aave and Compound use but tuned differently per asset. Stable-rate borrowing is available on select assets, providing predictability for borrowers who want fixed repayment costs.
What is the ZeroLend Card feature?
The Card product (accessible via the "Card" section of the app) is a crypto debit card integration. It lets users spend their DeFi earnings or borrowed funds in real-world contexts without manually off-ramping. This is an emerging area — bridging on-chain credit positions to everyday spending. The team behind ZeroLend designed it to complement the lending core, giving active protocol users a direct way to use their liquidity outside of DeFi.
How does governance work on the ZeroLend protocol?
Governance runs through veZERO. Proposals can cover parameter changes (LTV ratios, reserve factors, interest rate curves), new asset listings, market deployments on new chains, and treasury allocations. Any holder with sufficient veZERO can submit a proposal. Voting weight scales with locked token amount and lock duration. Shorter locks give less voting power; longer locks give more. This design was popularized by Curve Finance's veCRV model and has been adapted across many DeFi protocols since 2021.
Does ZeroLend offer any points or incentive programs for users?
Yes. ZeroLend runs an ongoing points program where lenders and borrowers accumulate points based on their activity. Points can translate into token allocations in future distribution events. The protocol has also offered additional network-specific incentives — for instance, Linea and zkSync deployments have run separate campaigns in coordination with those networks' own incentive programs. Checking the Earn section of the app shows current active programs and estimated point accrual rates.
Where can I track ZeroLend protocol data and analytics?
The primary analytics dashboard for ZeroLend is hosted on Dune Analytics. It shows TVL by market and chain, borrowing volumes, active users, and historical rate data. Token Terminal also tracks ZeroLend's financial metrics including revenue and fees. On-chain data is fully public — anyone can query contract state directly. For protocol documentation and technical details, the official docs at docs.zerolend.xyz cover architecture, risk parameters, and integration guides. See also the about-us page for background on the protocol.