Introduction

Welcome to Zentra Finance

Protocol Overview

Zentra is a decentralized money market protocol that enables permissionless borrowing and lending of digital assets on Citrea. Built on battle-tested Aave architecture, Zentra brings institutional-grade DeFi to Bitcoin's ZK rollup ecosystem.

How It Works

Actor	Action	Result
Lenders	Deposit assets	Earn APY + ZNT rewards
Borrowers	Provide collateral + borrow	Pay interest, earn ZNT
Liquidators	Repay underwater positions	Earn liquidation bonus
Oracle	Provides real-time prices	Powers all calculations

The Flow:

1. Lenders deposit ctUSD/wcBTC into liquidity pools

2. Borrowers deposit collateral and borrow against it

3. Borrowers pay interest, which goes to lenders

4. If positions become underwater, liquidators step in

Core Concepts

Supply (Lending)

Deposit assets into Zentra's liquidity pools to earn yield.

Benefit	Description
Passive Income	Earn interest from borrowers
ZNT Rewards	Additional yield from emission incentives
Liquidity	Withdraw anytime (subject to utilization)
No Lock-up	Your assets remain accessible

Borrow

Use deposited assets as collateral to borrow other assets.

Feature	Description
Over-Collateralized	Must deposit more than you borrow
Variable Rates	Interest adjusts with market demand
No Repayment Deadline	Pay back whenever (interest accrues)
ZNT Rewards	Often offset borrowing costs

Collateral

Your deposited assets secure your loans.

Parameter	Description
Collateral Factor	Max % of deposit value you can borrow
Liquidation Threshold	Health factor level triggering liquidation
Liquidation Penalty	Fee paid if position is liquidated

Key Metrics

Health Factor

Your position's safety level, calculated as:

Health Factor = (Collateral Value × Liquidation Threshold) / Borrowed Value

Health Factor	Status
> 1	✅ Safe
= 1	⚠️ Liquidation risk
< 1	🔴 Liquidatable

Example:

• Collateral: $10,000 wcBTC (LT: 80%)

• Borrowed: $6,000 USDC

• Health Factor: ($10,000 × 0.80) / $6,000 = 1.33 ✓ Safe

Utilization Rate

Percentage of supplied assets currently borrowed.

Utilization = Total Borrowed / Total Supplied

Utilization	Effect
High	Higher borrow rates, higher supply APY
Low	Lower borrow rates, lower supply APY

Interest Rate Model

Zentra uses a kinked interest rate model that adjusts based on utilization.

Zone	Utilization	Rate Behavior
Normal	0% - 80%	Gradual increase
Kink	80%	Optimal target
High	80% - 100%	Steep increase (discourages over-borrowing)

Supported Assets

Launch Markets

Asset	Type	Use Case
ctUSD	Stablecoin	Primary borrow asset
wcBTC	Wrapped BTC	Primary collateral
USDC	Stablecoin	Primary borrow asset

Protocol Architecture

Layer Stack:

Layer	Component
Interface	zentra.finance (Web App)
Smart Contracts	Pool, Oracle, Interest Rates, Liquidation
L2	Citrea (Bitcoin ZK Rollup)
L1	Bitcoin (Settlement Layer)

Safety Features

Feature	Description
Over-Collateralization	All loans backed by excess collateral
Liquidation System	Automatic protection against bad debt
Oracle Security	Multiple price feed sources
Rate Caps	Maximum interest rates prevent manipulation
Reserves	Protocol reserves cover potential shortfalls

Links

Zentra Finance: https://zentra.finance

Twitter: https://x.com/ZentraFinance

Discord: http://discord.gg/zentrafinance

Medium: https://medium.com/@zentrafinance