Reference

FAQ

What is Zipcode?

An asset-backed, private credit network.

• A credit rail that funds warehouse-style, business lines of credit to HELOC originators.
• USDC supply is sourced from on-chain capital.
• Every loan collateralized by an SPV which holds a lien, and a repurchase agreement.

What do I actually hold when I deposit?

A share to an onchain equity credit vault.

• The vault earns yield.
• The vault is subject to risks in duration, illiquidity, and default.

Where does my yield come from?

Bittensor emissions that the junior engine compounds into the vault’s NAV.

Where does the yield go from the Credit Lines?

~7.5% lending interest that credit lines pay into the warehouse. These shares act as reserves, and programmatically buyback the emissions token $SN46.

How do I exit?

Enter the Redemption Queue, and a CRE workflow will begin to digest your exit with available USDC.

• The vault buys you out through the CoW limit orderbook, and burns your shares.
• An outside buyer can also make a bid during illiquid periods.
• Your position earns yield until the loan resolves.
• Those in the Exit Queue have priority over new lines of credit being issued.

Can I lose money?

Yes, depositors have credit risk.

• If you have a USDC emergency, and you need to exit, you may be reliant on secondary market bids.
• If any bankruptcies impact the Originators, Zipcode would end up holding custody of Liens, which may result in extended duration risk, or weak secondary market bids.

Zipcode underwriting is determined by what secondary markets are currently offering when the line of credit opens — However, the repurchase agreement is made between the HELOC originator and the protocol, not the secondary market. This means that in a market downturn, the secondary markets can withdraw their bid, and the HELOC originator could opt to not fulfill their repurchase agreement.

At which point, the protocol would hold custody of a 2nd Lien HELOC in an illiquid market.

If many of these happened at the same time, then all silos that were imapcted would become illiquid until those issues were resolved.

Is zipUSD a stablecoin?

It is a non-yield-bearing utility credit dollar.

Who can borrow?

KYB’d HELOC originators with existing secondary-market relationships — and only against a lien that clears all six underwriting proofs. The protocol is permissioned end-to-end; there is no open borrowing.

What happens when a loan runs late?

Duration Risk, and compensatory yield. The repurchase agreement pushes the lien to protocol custody, and must be sold to secondary markets.

Has it been audited?

An engagement with Octane Security is underway; see Audits.

Why Bittensor? Why Chainlink?

• Bittensor enables zkProof Validation as a decentralized job — funded by network emissions rather than a tax on lenders.
• Bittensor enables a competition of curators model, wherein multiple silos / curators can compete for emissions by producing higher yield warehouses, which compete in profitability and default risk.
• Chainlink CRE provides Cross Chain Bridging, Automation Infrastructure for Operations, and Credit Oracle transmission which communicates between Bittensor and EVM.