ZRS: Zephyr Reserve Shares

The Distributed Reserve System

Hey, so you know how stablecoins like Tether keep all their money in regular banks? Well, Zephyr does something way cooler - it spreads the reserve across all its users!

Here's the basic idea: You can jump in and become a reserve holder anytime by swapping your ZEPH coins for ZRS (that's the reserve coin). Pretty simple, right?

Now here's where the math comes in:

Required Reserve = Number of ZSD × $4

So for every ZSD out there, we need $4 worth of stuff in reserve. Like if there's 1,000 ZSD floating around, we need at least $4,000 in the reserve. That's what keeps ZSD stable at $1.

ZEPH price moves

Let's talk about what happens when ZEPH's price moves around:

Reserve Value = ZEPH in Reserve × Current ZEPH Price

Say we've got 1,000 ZEPH in reserve when ZEPH is worth $4:

Initial Reserve = 1,000 ZEPH × $4 = $4,000

If ZEPH drops to $3:

New Reserve = 1,000 ZEPH × $3 = $3,000

Uh oh! That's below our required $4,000, so no new ZSD can be created until the price goes back up.

But check this out - if ZEPH shoots up to $10:

High Reserve = 1,000 ZEPH × $10 = $10,000

That's actually too much! The protocol caps it at $8 per ZSD, so no new ZRS minting until things cool down.

Making money

Now here's the fun part - making money! The reserve holders get rewards from each block. Here's how it works:

Block Reward = 9.590 ZEPH
Reserve Share = 30% × Block Reward = 1.918 ZEPH
Daily Reserve Increase = 1.918 ZEPH × (24 × 30) blocks
Monthly Reserve Increase ≈ 41,428.8 ZEPH
Reserve Value = ZEPH in Reserve × Current ZEPH Price

Want to figure out your potential returns? Here's an example:

Your Investment = 1,000 ZEPH
Total Reserve = 500,000 ZEPH
Your Share = Your Investment ÷ Total Reserve = 0.2%
Monthly Return = Your Share × Monthly Reserve Increase
Monthly ROI = (Your Return ÷ Your Investment) × 100% ≈ 8%

Pretty sweet deal, right? That's why they put that 8:1 cap on the reserve - if too many people jumped in, everyone's slice of the pie would get tiny and nobody would bother anymore.

So that's ZRS - a clever way to keep a stablecoin stable while letting regular folks earn some nice returns! Let me know if you want me to explain anything in more detail!

Additional Resources

  +  Zephyr Protocol Official Website: https://zephyrprotocol.com/
  +  Zephyr Blockchain Explorer: https://explorer.zephyrprotocol.com/
  +  Zeph Whitepaper: https://zephyrprotocol.com/docs/zephyr_whitepaper.pdf
  +  Zeph Network: https://zeph.network/