General

ZolTAO is a decentralized borrowing protocol allowing users to draw interest-free loans against Ether used as collateral. These loans are paid out in dCNY, a CNY-pegged stablecoin, with a minimum collateral ratio of 110%. ZolTAO is a fork of Liquity's LUSD, offering similar features with additional benefits like LP staking pool incentives and strategy troves. The loans are secured by a Stability Pool containing dCNY, with the protocol being non-custodial, immutable, and governance-free.

Key Benefits of ZolTAO:

1. 0% interest rate for borrowers

2. Minimum collateral ratio of 110%

3. Governance-free and fully automated operations

4. Directly redeemable dCNY

5. Fully decentralized and censorship-resistant

Main Use Cases of ZolTAO:

1. Borrow dCNY against ETH by opening a Trove

2. Secure ZolTAO by providing dCNY to the Stability Pool in exchange for rewards

3. Stake TAO to earn fee revenue from borrowing or redeeming dCNY

4. Redeem dCNY for ETH when the peg falls below ¥1

Tokens in ZolTAO:

1. dCNY: CNY-pegged stablecoin used to pay out loans

2. TAO: Secondary token capturing fee revenue and incentivizing early adopters

Getting Started with ZolTAO: To use ZolTAO, users need a wallet (e.g., MetaMask) connected to the platform and sufficient Ether. To become a Stability Pool depositor or TAO staker, users need dCNY and/or TAO tokens.

Fees in ZolTAO: There are one-off fees for borrowing and redeeming dCNY. Borrowers pay a percentage of the drawn amount, while redeemers pay a fee on the amount paid to them by the system when exchanging dCNY for ETH.

Earning Money with ZolTAO:

1. Deposit dCNY to the Stability Pool to earn liquidation gains and TAO rewards

2. Stake TAO to earn dCNY and ETH revenue from borrowing and redemption fees

3. Stake dCNY/ETH LP to earn TAO rewards and compounded fees

Risks: Users may lose funds if they are borrowers whose collateral is liquidated or if they are Stability Pool depositors and the deposited dCNY is used to repay debt from liquidated borrowers. While ZolTAO is audited, the possibility of hacks or bugs cannot be completely eliminated.

Please note that dCNY isn't perfectly pegged to the CNY, and can deviate slightly in both directions under certain market conditions. See On Price Stability of dCNY for more details. Although the system is diligently audited, a hack or a bug that results in losses for the users can never be fully excluded (see disclaimer).