ZeroTwOhm: The Treasury-Backed Liquidity Protocol Powering Arbitrum

We’d like to introduce you to Arbi’s Finance’s latest project: ZeroTwOhm — the most exciting new DeFi protocol on the Arbitrum network.

ZeroTwOhm is building the first treasury-backed liquidity protocol on Arbitrum, one of the fastest-growing scaling chains for Ethereum. Since we launched Arbi’s Finance in late October, our team has been working at lightning-speed to establish ZeroTwOhm as Arbitrum’s leading liquidity protocol.

ZeroTwOhm is supercharged by a unique advantage. It is part of the Arbi’s Finance ecosystem, the premier launchpad for DeFi projects on Arbitrum. Arbi’s is working hand-in-glove with ZeroTwOhm to support its success, which in turn will help power the entire Arbi’s portfolio.

In just three weeks since launch, ZeroTwOhm has assembled a fantastic community of long term HODLers and raised millions of dollars in wholly-owned treasury assets. Now, it’s time for Arbi’s Finance to formally introduce ZeroTwOhm to the DeFi community and begin outlining our ambitions for the future.

An Arbitrum Liquidity Protocol Like No Other

Liquidity is the life blood of any DeFi ecosystem, especially for a young and rapidly growing network like Arbitrum. To date, most DeFi protocols on Arbitrum and elsewhere have attracted liquidity by paying high rewards to stakers and yield farmers. In many cases, the result has been unsustainable inflation and disappointing returns for token HODLers.

ZeroTwOhm takes a different approach. It raises wholly-owned treasury capital by issuing bonds denominated in our token, Z2O, in exchange for blue-chip assets such as Ethereum, Bitcoin, and OlympusDAO’s OHM. ZeroTwOhm then puts that capital to work, deploying it across the Arbitrum ecosystem and beyond to generate big returns for Z2O HODLers.

As ZeroTwOhm continues to take off, we expect its liquidity to power billions of dollars in transactions on Arbitrum and play a central role in the network’s growth.

Unmatched Rewards & Sustained Value

Z2O is not a USD-pegged stablecoin. It doesn’t depreciate with the dollar and has no risk of losing value by breaking from a peg.

Instead, the value of each Z2O token is backed up by a claim on ZeroTwOhm’s treasury assets. If Z2O’s price ever drops below its backed value, the treasury will step in and buy Z2O at a price equal to its treasury-backing. This mechanism puts a solid and rising floor on Z2O’s value.

And unlike stablecoins, Z2O is free to appreciate in price. We expect its value to rise in tandem with ZeroTwOhm’s ever-growing treasury even as it puts new Z2O into circulation to keep pace with market demand.

The rising value of Z2O is just one way the protocol delivers returns for HODLers. Investors gain the most from Z2O by supporting the ZeroTwOhm project through bond purchases and staking.

Bonders enjoy delicious discounts, often around 10% to 20%, on Z2O tokens, which are paid out over a 5-day vesting period.

Stakers, meanwhile, get juicy Z2O rebase rewards every 8 hours, which are automatically staked and compounded. The longer they stake, the more Z2O they own.

The best value-maximizing strategy for Z2O is simple. Buy its bonds, get discounted Z2O, and then stake and chill!

So far, the typical annual percentage yield (APY) for Z2O stakers has been around 100,000%, among the highest on Arbitrum. Periodically, ZeroTwOhm temporarily boosts its yields, sometimes as high as 5,000,000%, to promote the project and reward long term stakers.

ZeroTwOhm’s boosted APY for the French Fry Friday promotional event

ZeroTwOhm’s APY will vary over time depending on demand for Z2O and the growth of its treasury. Our team carefully manages ZeroTwOhm’s rebase rewards to ensure we offer best-in-class yields without compromising Z2O price appreciation.

Progress To Date & Vision For the Future

In only three weeks, ZeroTwOhm has already accumulated an enviable reserve of treasury assets, including:

  • ~$400,000 in wrapped Bitcoin (wBTC)
  • ~$350,000 in wrapped Ethereum (wETH)
  • More than $2 million in U.S. Dollar-pegged Magic Internet Money (MIM)
  • ~$1 million in Olympus DAO’s wrapped token wsOHM

And that’s just the beginning. Expect to see a wider variety of bond offerings in the days and weeks to come.

In fact, on the day of this article’s publication, ZeroTwOhm released a new bond for FRAX stablecoins, which use a mix of treasury-backed reserves and algorithms to maintain a steady value. Soon, ZeroTwoOhm will also begin offering wrapped MEMO bonds, the staked version of the TIME token on Avalanche’s Wonderland protocol. These new bonds will further diversify ZeroTwOhm’s asset base and elevate the treasury-backing of Z2O.

At the same time, we are busy putting ZeroTwOhm’s treasury to work for its HODLers. This week, ZeroTwOhm deposited $2 million in MIM into Abracadabra’s MIM-2CRV farm. We expect the investment to net ZeroTwOhm’s treasury a whopping $500,000 per year in Abracadabra’s governance token, SPELL.

ZeroTwOhm has also created its first liquidity pair (LP) using its treasury assets. Its nearly $2.5 million MIM-Z2O LP provides virtually all of the liquidity for Z2O trades on SushiSwap, generating a steady stream of exchange fees for our treasury.

These investments are the first of many more to come. The Arbi’s Finance team is actively working with the leading DeFi projects on Arbitrum and beyond to scout out the most lucrative opportunities for our growing treasury.

The Arbi’s Finance Food Court ecosystem

The Arbi’s Advantage

As ZeroTwOhm bootstraps its way to DeFi prominence, it enjoys a crucial advantage: its relationship to Arbi’s established DeFi ecosystem on Arbitrum.

The Arbi’s Food Court is a sprawling menu of interconnected DeFi projects that offer tasty yields.

Besides ZeroTwOhm, its projects include:

  • Arbi’s Compounders: A platform offering stakers juicy yields in ARBIS tokens from fees collected across its Food Court.
  • ArbiCheems: A yield farm that rewards stakers with our highly-deflationary meme-coin CHEEMS.
  • CheemsHole: A a winner-take-all degen gambling game that rewards players with CHEEMS.

Arbi’s is off to a strong start, but our ambitions go much further. The goal is to become the go-to platform for a broad range of DeFi offerings on Arbitrum.

The Arbi’s Finance team is already hard at work on building our next big project: an Arbitrum-native collateralized lending protocol. Participants will be able to access loans directly on Arbitrum by posting a wide array of assets as collateral, including wBTC, wETH, MIM, wsOHM and OlympusDAO’s upcoming gOHM token.

For ZeroTwOhm, the Arbi’s Food Court is a powerful asset. Arbi’s is already playing an important role in bolstering ZeroTwOhm’s treasury and will do even more to support the project in the future.

For example, Arbi’s investors have shown up for ZeroTwOhm in a big way by buying $2 million in Z2O bonds using MIM they had staked on ArbiCheems. It is now yielding hundreds of thousands of dollars annually for Z2O HODLers. Eventually, Arbi’s plans to boost ZeroTwOhm’s treasury further by depositing ARBIS tokens, which pay out big rewards from fees across the Food Court.

The Arbi’s Food Court also provides a critical source of capital for ZeroTwOhm — its treasury is basically our in-house venture fund. Using fees collected from across the ecosystem, Arbi’s supports marketing, web development, new hires and more for ZeroTwOhm and its other exciting projects.

Our mission goes beyond taking great care of our HODLers (although we’re very good at that!). We are also committed to taking care of the world. Each month, Arbi’s donates 10% of its liquid treasury assets to the Savory Institute. Using an innovative method of regenerative agriculture developed by Allan Savory, the nonprofit fights climate change and reverses desertification worldwide.

Allan Savory’s TED Talk on Holistic Management

Next Steps And Beyond

ZeroTwOhm is just getting started. In the weeks to come, expect a steady stream of exciting announcements and more updates on ZeroTwOhm’s roadmap. Together, we’ll take the DeFi world by storm.

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Umami Finance is the premier market-maker and liquidity network for Arbitrum. https://umami.finance/

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Umami Finance

Umami Finance

Umami Finance is the premier market-maker and liquidity network for Arbitrum. https://umami.finance/

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