Zcoin Blog

Bridging Zcoin Znodes into DeFi with Stakehound partnership

By September 2, 2020 No Comments

We are proud to announce Zcoin’s partnership with Stakehound to unlock liquidity of Znodes and bridge them into DeFi. Zcoin $XZC will be the first asset available on the Stakehound platform and is set to go live in early October though users can already test it on the Ropsten testnet.

As outlined in an earlier forum post, the Zcoin core team has been exploring integrations with the DeFi ecosystem to enable decentralized exchanges, using XZC as collateral for loans and providing greater exposure and liquidity for XZC. Stakehound is the first of these initiatives in our pipeline.

Znodes are an important part of Zcoin’s infrastructure providing security to the network. However, this also meant that the Zcoin locked in these Znodes were illiquid and unable to be traded. The 1000 XZC minimum requirement also prevented smaller holders from earning rewards on their XZC. Our partnership with Stakehound solves both these problems by allowing fractional portions of Znodes to be traded while continuing to earn their share of their Znode rewards along with all the benefits of integration with the DeFi ecosystem.

It achieve this by allowing XZC in Znodes to be represented as an ERC20 token on Ethereum (and in the future other smart contract platforms as well).

HOW DOES IT WORK?

In order to create stakedXZC few steps are required:

Step 1: A user sends XZC to StakeHound that will send it to an institutional grade custodian.

Step 2: StakeHound sends back to the user ERC20 stakedXZC.
These tokens can be freely transferred, traded and used in all major DeFi applications, such as Uniswap, Aave and others.

Step 3: StakeHound places the native XZC in Znodes and distributes the Znode rewards daily to stakedXZC holders.

However, once wrapped, stakedXZC will be easily tradable on the open market. It means that stakedXZC represents and is backed by XZC in Znodes but allows fractional ownership and open trading while continue to earn Znode rewards!

A testnet example of how stakedXZC can be traded on the Uniswap DEX.

WHAT’S NEXT?

Over the coming weeks, we will be diving deeper into how to go about getting stakedXZC and go into further details into what this partnership means and an introduction to how you can use stakedXZC.

While Zcoin’s primary goal to provide the highest level of practical privacy remains unchanged, we also see value in increasing the utility and liquidity of Zcoin allowing Zcoin to be used in exciting ways in the DeFi ecosystem. We highly recommend reading our approach on the issue and recommend community members to share their opinions!