Xero Protocol
Xero Protocol is a privacy-enhanced, trustless, permissionless, & oracle-less peer-to-peer lending & borrowing marketplace with flexible & customizable terms and cross-chain RWA support.
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🎯 Project Overview
Xero Protocol is the first peer-to-peer lending marketplace that solves the fundamental privacy problem in DeFi: users shouldn't have to choose between financial privacy and access to credit.
Unlike traditional DeFi protocols that force complete transparency, Xero gives users absolute control over what they reveal. Borrowers can prove creditworthiness without disclosing their full financial history. Lenders can verify collateral sufficiency without seeing exact amounts. And everyone can build reputation pseudonymously using zero-knowledge proofs.
1. RWA/RealFi Integration
We've integrated real-world assets (RWAs) in our protocol:
OUSG (Ondo US Government Treasuries): Tokenized US Treasury bonds (~$1.00 per token, ~5.2% APY)
XAUM (Matrixdock Gold): Physically-redeemable gold tokens (~$140 per gram)
Key Advantages:
Lower Collateral Ratios: 120% for RWAs vs 150% for volatile crypto (recognizing stability)
Cross-Chain Support: Use Ethereum-based RWAs as collateral on Mantle (where most RWAs are deployed)
Privacy Option: Institutional users can borrow against RWAs without revealing holdings
Composable: RWAs can be bundled with other collateral types
Real-World Impact: A fund manager can borrow against their OUSG holdings on Mantle for short-term liquidity without selling the underlying treasuries or revealing their exact position size.
2. DeFi & Composability Integration
Innovation: Universal Collateral Lending with Advanced Composability
Our protocol supports unprecedented collateral flexibility:
Supported Asset Types:
ERC-20 tokens (stablecoins, crypto)
ERC-721 NFTs (BAYC, Punks, any collection)
ERC-1155 multi-edition tokens
RWAs (OUSG, XAUM, etc.)
Multi-Asset Bundles (combine any assets in one loan)
Composability Features:
Offer System: Lenders create standing offers that borrowers instantly match
Cross-Protocol Integration: Collateral can be yield-bearing tokens from other protocols
Reputation as Collateral: ZK-proven credit scores reduce collateral requirements
Synthetic Credit Lines: Revolving facilities based on proven history
Example Flow:
User bundles: 5 OUSG + 0.1 WETH + BAYC #123
→ Borrows 50k USDC at 9% (lower rate due to diversified collateral)
→ Builds reputation privately
→ Next loan requires only 100% collateral ratio
No Liquidations: Unlike Aave/Compound, we eliminate systemic risk through pre-agreed collateral terms. No flash crashes, no cascading liquidations.
3. ZK & Privacy Integration
Innovation: Optional Privacy with Granular Disclosure Controls
The Privacy Problem: Traditional DeFi is completely transparent (bad for privacy) while TradFi is completely opaque (bad for trust). Xero solves this with selective disclosure.
Privacy Features Powered by SP1 zkVM:
Private Loan Amounts
Borrower proves amount > minimum threshold
Lender verifies without seeing exact value
Executed via ZK proof:
commitment = hash(amount, salt)
Hidden Collateral Values
Prove collateral > 150% LTV requirement
Conceal exact holdings and composition
Enable institutional privacy
Pseudonymous Reputation
Build credit score from loan history
Prove score > threshold with nullifiers (prevent double-use)
Never reveal specific loan details
Better rates without doxxing
Encrypted Interest Rates
Negotiate terms privately
Only parties see actual APY
Prevents front-running and copycats
Privacy Service Architecture:
Backend service generates SP1 ZK proofs
Three proof circuits: collateral-value, loan-amount, reputation
Redis caching for frequently-used proofs
Sub-second proof generation on Succinct network
Regulatory Compatibility:
Optional disclosure to authorized parties
Selective reveal for compliance
Maintain privacy for legitimate users
Audit trails without public exposure
User Choice: Privacy is optional. Users can operate in full transparency (public mode) or enable privacy features (private mode) per-loan.
4. Best Mantle Integration
Innovation: Leveraging Mantle's Full Stack for Optimal Performance
Why Mantle?
Low Gas Costs: Complex ZK proof verification on Ethereum would be prohibitively expensive. Mantle makes privacy affordable.
High Throughput: Handle high-frequency loan matching and offer updates
EVM Compatibility: Seamless integration with existing DeFi tooling
Security: Inherit Ethereum's security while maintaining L2 speed
Mantle-Specific Optimizations:
MNT Token Integration
Native support for MNT, METH, CMETH as collateral
Gas fee optimizations using Mantle's fee structure
Mantle ecosystem tokens whitelisted by default
Cross-Chain Architecture
Bridge Ethereum NFTs/RWAs to Mantle
Lock on Ethereum, borrow on Mantle
Relayer consensus for security
Optimized for Mantle's bridge infrastructure
Data Availability
Efficient storage using Mantle's DA layer
Proof data batching
Off-chain indexing for faster queries
Smart Contract Design
Gas-optimized for Mantle's opcode costs
Batch operations for efficiency
Modular architecture for upgrades
5. UX / Demo
Innovation: Seamless Privacy Without Complexity
The UX Challenge: Privacy protocols are notoriously difficult to use. We made it as simple as clicking a checkbox.
Key UX Innovations:
One-Click Privacy Toggle
☐ Privacy Mode Hide loan details using zero-knowledge proofsThat's it. No understanding of ZK required.
Backend handles proof generation automatically
User just sees "Processing privacy proof..."
Smart Defaults
Public mode by default (most users want transparency)
Privacy suggestions based on loan size
"Institutional borrowers often use privacy for loans >$100k"
Progressive Disclosure
Show basic info always (loan exists, it's active)
Reveal more with user consent
Educational tooltips explain privacy benefits
Wallet Integration (Privy)
Social login + Web3 wallet
Email, Google, Twitter login
Embedded wallets for non-crypto natives
No seed phrases to remember
Asset Selection UX
Categorized by type: Stablecoins | Crypto | RWAs | NFTs
Visual badges for asset types
"Low volatility" indicator for RWAs
NFT preview integration
Offer Matching Intelligence
"3 lenders accept RWA collateral for your loan"
"Best rate: 8.2% APY with Grace"
"⚡ Instant match available"
Mobile-First Design
Responsive on all devices
Touch-optimized controls
Native-feeling animations
Progressive Web App ready
Demo Flow (60 seconds):
1. Connect wallet (Privy social login) - 10s
2. Click "Borrow" - 2s
3. Enter: $10,000 USDC, 30 days, 10% APY - 15s
4. Select collateral: 0.5 WETH - 10s
5. Toggle privacy ON - 2s
6. Click "Create Request" - 3s
7. System generates ZK proof - 8s
8. Transaction confirmed - 5s
9. See matched lenders - 5s
10. Click "Accept Offer" - done ✓
No complex ZK setup. No manual proof generation. Just simple, beautiful lending.
🛠️ Technical Stack
Smart Contracts:
Solidity 0.8.20
OpenZeppelin libraries
Hardhat development environment
Frontend:
Next.js 14 (App Router)
TypeScript
Tailwind CSS
Privy (wallet integration)
ethers.js v6
Privacy Layer:
Succinct's SP1 zkVM
Rust programs for proof circuits
Node.js backend service
Redis caching
Infrastructure:
Mantle Sepolia testnet
IPFS for metadata
The Graph for indexing
📊 Current Status
Deployed on Mantle Sepolia:
✅ All core contracts deployed & verified
✅ Over $2m TVL
✅ 3 lending offers live
✅ RWA tokens (OUSG, XAUM) integrated
✅ Privacy module deployed
✅ Frontend live and functional
✅ Privacy service architecture complete
Live Demo: https://mantle.xeroprotocol.com
Contracts:
"FeeDistributor": "0xc7bB407B7c3b888efc63A94B449a97cEE55c0ccC"
"Governance": "0x43374Eaca1d4C015E528E3AAF43Ccf305195644b",
"ReputationRegistry": "0x524B6cC09696709Cd6D798A7F54519cD9db8c02c",
"PrivacyModule": "0x2a1b190C16Cf7e607C5B302d156e6003558F0C39",
"LoanCore": "0xEF8dc620694039fc80B60caF0Ee42a67b8505592",
"OfferBook": "0xa5765B5161d1D913407376a975DBF63Eb74e2365"
🚀 Future Plans
Q1 2026:
Mainnet launch on Mantle
Mantle bridge integration
Governance token launch
Q2 2026:
Mobile app (iOS/Android)
More RWA integrations
Institutional features
Regulatory compliance toolkit
💪 Our Core Competencies
RWA Track: Only protocol with native RWA support + preferential terms
DeFi Track: Most flexible collateral system + no liquidations
Privacy Track: Only optional privacy with granular control
Mantle Track: Fully optimized for Mantle's architecture
UX Track: Simplest privacy protocol ever built
The Xero Difference: We didn't just build another lending protocol. We reimagined what P2P credit can be when users control their privacy, accept any collateral, and eliminate systemic risks.
👥 Team
Our team is made up of experienced blockchain developers, marketers, & business development managers.