Supply
zipUSD
zipUSD is a non-yield-bearing, synthetic credit-dollar, built on top of Euler. It is a utility dollar, enabling DeFi Composability:
- zipUSD/ZIPCODE LP.
- Lending zipUSD on Euler against tokenized T-Bills for loops.
Most users will automatically stake their zipUSD into the Junior Tranche Vault, where yield accrues.
Deposit
ZipDepositModule accepts USDC via deposit(), and mints zipUSD 1:1. The USDC is deposited into the Credit Warehouse, where is waits to be allocated to approved credit lines.
UI Depositors will zap() their zipUSD directly into the szipUSD Vault, which provides a transferable, yield-bearing, szipUSD share.
What backs zipUSD
USDC deposited into the Credit Warehouse earns ~7.5% APR on utilized credit lines. APR accrues to the warehouse in the form of additional USDC shares.
The SeniorNavAggregator sums backing across every silo into a solvency ratio — This contract moniters whether the senior dollar is whole.
Each loan is backed by a repurchase agreement, which holds the lien within an SPV, and transfers custody of that lien to Zipcode in case of default.
When defaults hit a Silo, zipUSD stays $1 backed, because the losses are localized to the Junior Tranche Safe.
szipUSD Depositors are proportionatly illiquid, and remain in a yield-bearing duration freeze until the lien can be sold to cover the default.
Par redemption
The zodiac module ZipRedemptionQueue is the only entity who can exit zipUSD at strict $1 par.
A dedicated CRE workflow monitors the redemption queue, and processes partial redemptions as USDC becomes available. Exits are programmatic, and USDC liquidity is available on a rolling basis, as lines of credit are repaid.
The Redemption Queue prioritizes repaying depositors over issuing out new lines of credit.