> For the complete documentation index, see [llms.txt](https://docs.zoth.io/zoth/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.zoth.io/zoth/zvaults/what-are-zvaults.md). # 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.