How zGOVT could be the new avant-garde among the leverage synthetic assets on chain

We are faced with increasing uncertainties and challenges in the face of successive waves of COVID-19, frequent extreme weather events, the delay in economic recovery, and the continued decline in US Treasury yields. How can we save our wealth in this volatile situation with higher risks and lower returns? How to preserve and grow your wealth? How to save yourself?

The answer is Zerogoki’s epochal investment tool zGOVT 20L, which was launched on July 9th, 2021, and anchors the iShares U.S. Treasury Bond ETF (GOVT). Moreover, the zGOVT20L gives GOVT a 20x leverage amplifying the benefits of going long GOVT. It’s a great tool for managing risk and increasing returns.

To understand zGOVT 20L, you need to understand GOVT, a Treasury Bond ETF designed to track the ICE Treasury Core Bond Index (the “base index”), one of the premium Treasuries ETFs. Funds typically invest at least 90% of their assets in the underlying bonds and 10% of their assets in certain futures, options, swaps, cash, and cash equivalents.

The chart shows the ratio of GOVT with the duration as the x-axis. It can be seen that short-term bonds with a duration of 0.5 to 5 years have the largest weight, accounting for 54.22% of the total, followed by long-term bonds with a duration of more than 15 years, accounting for 21.84%, and medium duration bonds with a duration of 5 to 15 years have the smallest proportion.
The chart shows the price curve of GOVT from July 2 to August 2, 2021
Graph showing the price trend of zGOVT in a week

As a synthetic asset generated by an anchored GOVT on the blockchain, zGOVT has the following characteristics:

— Diversification:

With a zGOVT, you can own hundreds, even thousands, of bonds in an index at a purchase price significantly less than what it would be to invest in each issue individually. It’s institutional-style diversification at retail prices.

— Ease of trading:

No more wading through the opaque OTC markets to haggle over prices. You can buy and sell assets from your regular blockchain account with the click of a button.

— Liquidity:

Bond ETFs can be bought and sold at any time during the trading day, even in overseas or smaller markets where individual issues might trade much less frequently.

— Price transparency:

With zGOVT, there’s no more uncertainty over what your investment is worth: zGOVT prices are published publicly on the website and updated during the trading day.

ZGOVT does not carry fixed income, but instead amplifies the GOVT’s own price volatility — if the GOVT has daily volatility of 0.1%, the zGOVT can reach 2%. The high leverage multiple reinforces its value attribute as a bond price simulation tool against inflation and unexpected risk while providing attractive capital utilization and capital appreciation capabilities: a zGOVT can hedge 20 times the value of a conventional asset.

— Weak regulatory characteristics:

As a synthetic asset, zGOVT is naturally resistant to supervision and review due to the decentralized chain environment, which gives it a higher degree of freedom when investing.

zGOVT, which exists on the blockchain as a leveraged token, offers lower barriers to entry: no margin, lower requirements for capital size and expertise, no forced liquidation of a position if it is blown up, and the position is automatically managed by the system for a minimal fee. Without a centralized operator, transaction rates are lower in the long run.

In the past two years, the leveraged token market has witnessed explosive growth. Major CEXs such as FTX and Binance began to list leveraged tokens, and the mechanism design and market rules are rapidly improving.

It is worth mentioning that derivatives in the traditional financial are often tens of times more than the spot size, so there is still a large gap in the leveraged token market in DeFi.

Zerogoki targeted this pain point with the launch of zAssets, the first of its kind to be synthetically anchored with stability mechanisms. The data listed on the platform so far have fully verified the advantages of leveraged tokens in DeFi: liquidity reaches $330,000, and the price also anchors the fluctuations of the subject matter smoothly.

With the rapid development of Defi and the popularization of market education, derivatives such as leveraged tokens will certainly play an indispensable role in providing diversification of returns and hedging market risks.

The specific ways to utilize zGOVT on the Zerogoki platform are as follows:

1. The Zerogoki platform allows users to use the project token REI to mint zGOVT 20L. ZGOVT 20L can be used as a hedge against rising US debt and uncertainty.

2. ZGOVT can make up LP with stablecoin zUSD for liquid mining, and the APY is as high as 83600000% at present

3. Make use of the system mechanism to carry out simple arbitrage when the price is offset: When the current zGOVT is at a positive premium, we can choose to buy REI, and then trade the asset price difference by minting it into zGOVT in Zerogoki and when the current zGOVT is at a negative discount, you can buy zGOVT and redeem it into REI to earn the spread.

Uniswap address:

zGOVT 20L Token:0xab9016557b3fe80335415d60d33cf2be4b9ba461

zGOVT 20L/zUSD Trading pair:0x1ffa71ec756f043cff0051d07130d70fd0f2e449

Trading, Mining and Arbitrage Tutorial:

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Zerogoki is a leveraged token trading platform deployed on Ethereum and based on an algorithmic pegging mechanism.