What is Zephyr Protocol?

Zephyr Protocol, launched on May 29, 2023, operates on a Monero-based chain, utilizing a three-asset model consisting of ZEPH, ZephUSD, and ZephRSV. The protocol is designed as an over-collateralized private stablecoin framework, drawing inspiration from the Djed Protocol and incorporating its privacy features. ZEPH serves as the base coin, essential for collateralization and minting, while ZephUSD is a private stablecoin backed by at least 400% of its value in ZEPH. ZephRSV functions as the reserve coin, rewarding users for adding ZEPH to the reserve.

The governance and economic mechanisms are based on a reserve model, which ensures a maximum reserve ratio of 800% to limit dilution for ZephRSV holders. Users incur fees during minting or redeeming of ZephUSD, contributing to the reserves. Additionally, a portion of block rewards is allocated to the reserves, providing an indirect staking reward mechanism. Future developments include a public testnet for Djed implementation and a mainnet hard fork planned for Q4 2023.