$ZSD Stablecoin Staking for Yield Shares ($ZYS)

• Source: 5% of the ZEPH block reward is used to mint an equivalent amount of ZSD (by USD value), which is deposited into the ZSD Yield Reserve*.
• Stakers receive ZYS (Zephyr Yield Shares) that track a claim on this reserve; with no lock-ups.

Zephyr's DJED-inspired stablecoin protocol is crypto backed by $ZEPH and over-collateralized.

• $ZSD (liabilities) are backed by the in-protocol $ZEPH reserve.
• Minting $ZSD requires the reserve to remain above ~400% collateralization.*

Proof-of-Work emissions continuously reinforce protocol assets.

• 30% Reserve Reward: adds $ZEPH directly to the reserve, increasing protocol assets.
• 5% Yield Reward: adds $ZEPH into the reserve, auto minting the equivilant $ZSD* value which is added to the Yield Reserve. This adds an equal amount of Assets and Liabilties.

Block rewards add roughly 7 units of assets for every 1 unit of new $ZSD liability.

• From each block, 30 + 5% of rewards (in ZEPH) goes to the reserve. 5% is used to auto-mint ZSD*
• This results in 7:1 new assets : new liabilities and target reserve ratio of ~700% over time.

The emission schedule fixes how much ZEPH bolsters the yield reserve each block.

• The amount of ZEPH used to generate yield is fixed (5% of the block reward).
• The USD value of ZSD minted varies with $ZEPH market price at each block*

Returns are market-driven by competition. The value of the Yield Generated ($ZSD) is split amongst the Yield Shares Holders ($ZYS).

• More staked $ZSD spreads the fixed ZEPH reward across more holders, driving APY lower.
• More ZSD staked → More $ZYS → rewards are spread thinner → lower APY.
• Less ZSD staked → Less $ZYS → rewards shared by fewer stakers → higher APY.