Xero Protocol

🎯 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:

1. Offer System: Lenders create standing offers that borrowers instantly match

2. Cross-Protocol Integration: Collateral can be yield-bearing tokens from other protocols

3. Reputation as Collateral: ZK-proven credit scores reduce collateral requirements

4. 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:

1. Private Loan Amounts

   • Borrower proves amount > minimum threshold

   • Lender verifies without seeing exact value

   • Executed via ZK proof: commitment = hash(amount, salt)

2. Hidden Collateral Values

   • Prove collateral > 150% LTV requirement

   • Conceal exact holdings and composition

   • Enable institutional privacy

3. 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

4. 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?

1. Low Gas Costs: Complex ZK proof verification on Ethereum would be prohibitively expensive. Mantle makes privacy affordable.

2. High Throughput: Handle high-frequency loan matching and offer updates

3. EVM Compatibility: Seamless integration with existing DeFi tooling

4. Security: Inherit Ethereum's security while maintaining L2 speed

Mantle-Specific Optimizations:

1. 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

2. 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

3. Data Availability

   • Efficient storage using Mantle's DA layer

   • Proof data batching

   • Off-chain indexing for faster queries

4. 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:

1. One-Click Privacy Toggle

   ☐ Privacy Mode
   Hide loan details using zero-knowledge proofs
   

   • That's it. No understanding of ZK required.

   • Backend handles proof generation automatically

   • User just sees "Processing privacy proof..."

2. Smart Defaults

   • Public mode by default (most users want transparency)

   • Privacy suggestions based on loan size

   • "Institutional borrowers often use privacy for loans >$100k"

3. Progressive Disclosure

   • Show basic info always (loan exists, it's active)

   • Reveal more with user consent

   • Educational tooltips explain privacy benefits

4. Wallet Integration (Privy)

   • Social login + Web3 wallet

   • Email, Google, Twitter login

   • Embedded wallets for non-crypto natives

   • No seed phrases to remember

5. Asset Selection UX

   • Categorized by type: Stablecoins | Crypto | RWAs | NFTs

   • Visual badges for asset types

   • "Low volatility" indicator for RWAs

   • NFT preview integration

6. Offer Matching Intelligence

   • "3 lenders accept RWA collateral for your loan"

   • "Best rate: 8.2% APY with Grace"

   • "⚡ Instant match available"

7. 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

1. RWA Track: Only protocol with native RWA support + preferential terms

2. DeFi Track: Most flexible collateral system + no liquidations

3. Privacy Track: Only optional privacy with granular control

4. Mantle Track: Fully optimized for Mantle's architecture

5. 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.