This is an ERC20 XMR wrapper.
There are some elegant design considerations around coin custody.
The wrapped XMR could be used as collateral to borrow USDT on Ethereum and you could use that cash to buy more XMR. if price goes up its free XMR thanks to our old drunken uncle leverage. If price drops you get margin call and liquidated and lose all your Monero.
The main point I want to discuss is the ZFI token. You buy their token, stake it and get reward payed in wrapped XMR. Sounds sweet.
Many may do this but its a theta / gamma tradeoff. That means yes you earn XMR but all the while your ZFI sinks in value and your total value loss will likely far exceed anything you earn.
Are there any other Zerofi risks or opportunities the community should be aware of?
sounds interesting. I just found out about it myself.
Heres the article/tweet:
https://x.com/OfficialZeroFi/status/2111564450222514263 original ↗
if its truly decentralized and trustless then its a gamechanger. I'll believe it when I see it working.
A quick read to understand how we plan to make Monero more accessible to all. x.com/i/article/2111563180363382784
When you LP you lose theta for small gamma. The winner is the swappers who get tighter slippage.
When you lend you usually get wiped out by an oracle flash crash so that doesn't make sense.
Once promising, Defi as it stands just has so many attack vectors and security concerns that it isn't serious.
There is of course always the chance that some new kid on the block like zerofi does something remarkable. we wait.
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