What are zVaults?

zVaults are the foundational infrastructure layer of the Zoth protocol: specialized, yield-generating investment vehicles that bring institutional fund management on-chain. Each zTOKEN is an ERC-20 compliant, interest-bearing token whose price appreciates over time to reflect yield accrued from the vault's underlying strategies.

zTOKENs are not stablecoins. Where a stablecoin holds fixed value parity, a zTOKEN behaves as a tokenized fund share: each token is a proportional claim on the vault's net asset value (NAV), and its value moves with the NAV as the strategies perform. This share-based model mirrors conventional mutual fund and hedge fund structures, with blockchain settlement adding transparency, composability, and efficient settlement.

A zVault can run a single strategy or combine several. zOPAL, the first live vault, allocates across two: BlackOpal's LiquidStone II credit strategy and Superstate's market-neutral basis trading. Each vault carries a defined mandate and risk profile, so investors and auditors can assess exposure against clear parameters rather than an open-ended basket.

zVaults draw exposure from across these strategy categories:

Strategy category	Exposure
Real-World Asset (RWA)	Tokenized traditional assets like ETFs, gold etc: commodities, secured lending, equity positions
DeFi Strategy	On-chain yield via liquidity provision, lending, derivatives, and trading
Private Credit and Lending	Direct credit facilities and structured lending arrangements
Geographic-Specific	Strategies focused on a particular jurisdiction or region

Fund managers retain full operational control over strategy execution and may deploy capital across any DeFi protocol, network, or asset within their vault's mandate.