Native Re-staking
This page explains how ZAI can be minted across various other chains through native re-staking
In collaboration with Connext Network, ZAI Stablecoin is introducing cross-chain Native Restaking to layer-2 networks.
USDC holders can now restake on leading layer 2 chains partnered with ZAI, enhancing liquidity and accessibility while simplifying the complexities associated with traditional re-staking methods.
Native re-staking allows ZAI to be minted across mulitple other chains natively with USDC without the user ever having to interact with the Ethereum mainnet.
What is native re-staking?
Native re-staking is a process where staked assets on one blockchain can be securely and efficiently re-staked on another blockchain, enhancing the liquidity and utility of these assets. This approach leverages cross-chain interoperability to allow users to maximize their staking rewards across multiple blockchain ecosystems.
The concept of native re-staking was first introduced by the Renzo Protocol. Renzo's innovative approach has set the foundation for this advanced staking method, showcasing how cross-chain interoperability can be leveraged to enhance the utility and profitability of staked assets.
Native re-staking significantly eases the user experience for minting ZAI by abstracting the complexities involved in depositing USDC on layer 2 networks and bridging to the mainnet. The advantages of native restaking are as follows:
User-Friendly Process: By abstracting the technical complexities, users can easily mint ZAI without needing in-depth knowledge of cross-chain mechanics.
Enhanced Liquidity: Users can gain immediate access to $USDz tokens on L2 networks, providing more liquidity options and faster transactions.
Seamless Interoperability: The integration with Connext and native bridges ensures smooth and secure asset transfers between L2 and mainnet.
How Native Re-Staking Simplifies ZAI Minting
User Interaction: Users initiate the process by depositing USDC into the xZaiDeposit contract on a layer 2 (L2) network.
Minting $USDZ: The L2DepositCollateral contract mints $USDz tokens, which are pegged to $USDz on mainnet and represent the user's deposit on the L2 network. The minted $USDZ tokens are XERC20 tokens and are sent back to the user, providing immediate liquidity on the L2 network.
Bridge Trigger: Periodically, the L2DepositCollateral contract triggers a bridge transaction through Connext or through the native bridge. This action sends all deposited USDC to the L1BridgeCollateral contract on the Ethereum mainnet.
Bridge Deposit & Minting: The L1BridgeCollateral contract's bridgeDeposit() function processes the USDC received on the mainnet. The Peg Stability Module then handles the USDC, minting ZAI tokens that are sent to the Lockbox contract to be wrapped into $USDz.
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