Welcome to Zoth

The Community Powered Re-staking Layer for RWAfi

Abstract

Zoth is building a Community-powered RWAfi Ecosystem to address the broken state of Real-World Assets (RWAs). For too long, RWAs were confined to institutional circles, stifling their potential for democratization. Zoth breaks down these barriers by providing a decentralized ecosystem that connects liquidity across Traditional Finance (TradFi) and Decentralized Finance (DeFi), enabling a free flow of assets and capital.

We believe that the widespread adoption of RWAfi within DeFi requires the active participation of retail investors, which has historically been limited by fragmented systems and unfair incentives. Zoth is dedicated to creating an inclusive system where retail investors are not just spectators, but active participants who fuel the growth of RWAs in DeFi. This includes creating a more accessible and fairer ecosystem where previously locked fixed-income assets can be freely utilized across DeFi.

Background and Problem

Zoth was established with the conviction that stablecoins and decentralized credit are crucial in addressing the pressing credit challenges in emerging markets. These regions are often stifled by TradFi, where high interest rates and complex procedures restrict small and medium businesses from accessing the financing required to grow. Crypto and stablecoins have the potential to revolutionize the financial landscape, but they need the stability of real-world assets. We believe that bringing $2 trillion in high-quality, fixed-income assets on-chain is essential. However, the current RWA market is not aligned with crypto values.

While the need for traditional assets within crypto is clear, existing RWA solutions often restrict access through long verification requirements, whitelisted tokens, fragmented liquidity, and a lack of DeFi integrations. These restrictions primarily exclude retail investors who are pivotal to any ecosystem's growth. Built for the community, Zoth is designed to solve this by providing permissionless access to a wide ecosystem of RWAfi, unlocking the full potential of RWAs within DeFi.

Key Challenges of this Transition

The inevitable shift of the massive TradFi industry making its way on-chain represents a fundamental change in how financial transactions and assets are managed, leveraging the efficiency and transparency of blockchain technology. However, there are particular challenges that Zoth identifies and addresses in the early phases of development:

1. Lack of Retail Participation - Lack of retail participation causes issues in liquidity issues for RWAs. Their absence results in a market dominated by institutional players, potentially leading to liquidity crunches. The current landscape does not provide sufficient access or incentives for retail investors to engage with on-chain RWAs.

2. Complicated Fund Structures - Most RWAs are issued via fund structures that are opaque with high administrative overhead and operational costs. This makes it difficult for products to scale across DeFi, which relies on principles of transparency and inclusion.

3. Gateways and Permissioned Access Layers - Restricted and closed systems hinder widespread participation, preventing a truly permissionless and inclusive environment for RWAs. Existing gateways are not ready to handle scalability issues, restricting the flow of assets and opportunities into DeFi ecosystems.

4. Establishing the Real-World Link - A critical element is forging a verifiable and legally enforceable link between a real-world asset and its on-chain tokenized representation. This requires collaboration with trusted custodians, legal frameworks for ownership recognition, and potential integration with oracles for off-chain data feeds.

5. User Experience - The complexity of blockchain interactions, wallet management, multiple tokens, and networks can be a barrier for non-technical users. Designing simple but secure user experiences is essential for driving broader adoption of on-chain RWAs.

6. Multichain Interoperability - The challenge of accelerating liquidity in current RWAs is due to asset tokens and their compliance standards being restricted to a single chain. This involves duplicating these mechanisms and practices across multiple networks to maximize liquidity influx.

Zoth's vision is to build an end-to-end RWAfi ecosystem that combines new financial instruments with the stability of TradFi and the scalability of DeFi. Zoth democratizes the access to creation and management of omni-chain, composable, yield-bearing RWA-backed assets, on-chain.

Building a robust RWAfi ecosystem requires a stable foundation, and for the crypto world, such a foundation is often found in permissionless RWA-backed tokens. These digital assets, designed to maintain a stable value, are pivotal for bridging the gap between traditional and on-chain finance. As we strive to democratize access to RWAs, it’s crucial to understand the evolution of stablecoins, their current state, and the inherent challenges that Zoth seeks to address through its innovative RWAfi solutions.

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