Zona Review: Lending and Borrowing Infrastructure

In today’s DeFi market, yield is everywhere, but leverage is still complicated. Whether it’s liquid staking tokens, perpetual DEX LPs, or tokenized real-world assets, most users struggle to amplify returns without juggling multiple protocols and risking costly mistakes. Zona positions itself as a solution to this problem by turning complex looping strategies into a simple, one-click experience. By combining native lending infrastructure with automated leverage tooling, Zona aims to unlock both “locked productivity” in crypto assets and “idle liquidity” in RWAs. Instead of manually depositing, borrowing, swapping, and repeating, users can execute advanced strategies in a single transaction. Read out this Zona Review to know more.

What is Zona?

Zona is a one-click looping protocol designed to help users maximize returns from both crypto-native and real-world assets. Instead of manually depositing, borrowing, swapping, and reinvesting across multiple platforms, Zona automates the entire process into a single transaction. By combining its native lending layer with automated leverage tools, Zona enables users to gain boosted price exposure, enhanced yield, or both, while reducing operational complexity and execution risk.

• One-click looping for leveraged yield and price exposure
• Built on native lending infrastructure (ZonaLend)
• Supports both crypto assets and RWAs
• Enables recursive borrowing and reinvestment
• Eliminates manual multi-protocol transactions
• Reduces gas costs and execution errors
• Optimized for yield-bearing and LP assets
• Helps unlock idle liquidity in RWAs
• Designed for scalable, automated DeFi strategies

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Zona Review: Key Products

1. ZonaLend (Live)

• Core lending and borrowing market
• Users can deposit assets (crypto or tokenized RWAs) as collateral
• Borrow against deposits for liquidity or strategy execution
• Functions like a standard money market but is optimized for looping
• Provides liquidity backbone for automated leverage

Primary use cases:

• Earn yield on deposits
• Borrow stable or other assets
• Serve as the base layer for leveraged strategies

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2. ZonaLoop (Coming Soon)

• One-click looping interface built on ZonaLend
• Automates recursive deposit → borrow → reinvest loops
• Users input target collateral, position size, and leverage
• ZonaLoop executes all internal steps in a single transaction

Primary use cases:

• Leveraged price exposure
• Leveraged yield farming
• Simplifies complex multi-protocol workflows

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Zona Review: Lend

ZonaLend is the foundational lending and borrowing protocol within the Zona ecosystem, designed to support both crypto-native assets and tokenized real-world assets (RWAs). It enables users to deposit approved assets as collateral, earn yield, and access overcollateralized loans. Unlike traditional DeFi money markets, ZonaLend is optimized for leveraged looping strategies, making it suitable for users seeking amplified exposure, enhanced yield, or capital efficiency.

Example Use Cases

1. Leveraged Long on RWAs

Users can deposit RWA tokens as collateral, borrow stablecoins, purchase more RWA tokens, redeposit them, and repeat. This creates leveraged exposure to both asset appreciation and underlying income streams such as rental yield.

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2. Leveraged Short on RWAs

Users can deposit stablecoins, borrow RWA tokens, sell them for stablecoins, redeposit, and repeat. This enables users to profit from declining RWA prices.

3. Crypto-Only Exposure

Users can use ZonaLend as a standard lending protocol by depositing assets like USDT, USDC, or WETH without interacting with RWAs.

4. Passive Yield Generation

Depositors earn yield from interest paid by borrowers, creating a passive income stream while retaining liquidity.

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Loan-to-Value (LTV) Framework

• Initial LTV for RWA assets: 50%
• Adjusted dynamically based on:
  • Volatility
  • Liquidity depth
  • Market conditions

This conservative starting LTV helps reduce systemic risk during early market adoption.

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Asset Underwriting & Risk Management

Before listing any asset, ZonaLend applies a multi-layered underwriting process that evaluates:

• Market demand and institutional interest
• Liquidity and trading depth
• Historical volatility
• Oracle and infrastructure reliability
• Issuer credibility and redemption capacity
• Regulatory compliance
• Smart contract security

This framework aims to maintain protocol stability and minimize default risk.

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Borrowing on ZonaLend

Users borrow assets against deposited collateral through overcollateralized loans.

Target Users

• Users seeking liquidity without selling assets
• Traders deploying leveraged strategies
• Investors hedging portfolio risk

Interest Model

• Variable rates based on utilization
• Higher utilization leads to higher interest
• Zona earns protocol revenue via reserve factors

Health Factor & Risk Monitoring

ZonaLend uses a Health Factor (HF) system to measure position safety.

Health Factor	Status	Risk Level
< 1.0	Liquidation	Critical
1.0 – 1.1	Critical	High Risk
1.1 – 2.0	Safe	Moderate
> 2.0	Excellent	Low Risk

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Zona Review: Loop

ZonaLoop is Zona’s automated looping interface built on top of ZonaLend’s lending infrastructure. It enables users to create leveraged yield and price exposure positions through a single transaction. By abstracting away the manual deposit, borrow, swap, and redeposit steps, ZonaLoop transforms complex multi-protocol strategies into a simple, user-friendly workflow.

Instead of managing multiple platforms and transactions, users only need to specify their collateral, position size, and target leverage. ZonaLoop handles the execution automatically, reducing operational risk and improving capital efficiency.

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How ZonaLoop Works

ZonaLoop compresses traditional looping strategies into one unified transaction:

1. Deposit Collateral
   Users deposit RWAs or crypto-native assets into ZonaLend as collateral.
2. Borrow Against Collateral
   The system automatically borrows stablecoins based on the selected leverage level.
3. Swap and Re-Deposit
   Borrowed stablecoins are swapped into the target collateral asset and redeposited.
4. Automated Repetition
   The process repeats until the desired leverage is reached.

All steps are executed atomically, minimizing execution and liquidation risks.

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Benefits of Using ZonaLoop

1. One-Click Simplicity

Users no longer need to manage multiple protocols, wallets, and transaction flows. ZonaLoop reduces advanced strategies to a single interaction.

2. Gas Efficiency

Bundling all loop steps into one transaction significantly lowers gas costs compared to manual looping.

3. Leveraged Yield

By increasing position size through recursive deposits, users can amplify yield from productive assets such as LSTs, LP tokens, and RWAs.

4. Leveraged Price Exposure

ZonaLoop allows users to gain greater market exposure without committing additional capital, enabling more capital-efficient trading strategies.

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Zona Review: Supported Assets

Asset Category	Asset Type	Examples	Primary Use Case	Risk Profile	Leverage Suitability
Blue-Chip Crypto	Major cryptocurrencies	WBTC, WETH	Collateral, leveraged exposure	Low–Medium	High
Yield Stablecoins	Yield-bearing stables	sUSDe, sUSDS, sUSDAI	Passive income, leveraged yield	Low	High
Liquid Staking Tokens	Staking & restaking assets	stETH, eETH, sETH	Amplified staking rewards	Medium	High
Perp DEX LP Tokens	Perpetual LP positions	GM, GLV	Fee-based yield farming	Medium–High	Medium
Volatile Tokens	Memecoins & emerging assets	Meme tokens	High-risk trading strategies	High	Low–Medium
Tokenized Treasuries	Government debt	T-Bills	Stable collateral, income	Low	High
Equities & ETFs	Tokenized stocks & indices	NVDA, S&P 500	Traditional market exposure	Medium	Medium
Commodities	Precious metals & resources	Tokenized Gold	Inflation hedge, diversification	Low–Medium	Medium
Real Estate Assets	Property-backed tokens	RE Funds, REITs	Rental income, leveraged yield	Medium	Medium
Money Market & Credit	Structured RWA products	MMFs, Credit pools	Stable yield strategies	Low–Medium	High

Conclusion

Zona positions itself as a next-generation DeFi infrastructure layer that bridges productive crypto assets and real-world assets through automated leverage and capital efficiency. By combining ZonaLend’s institutional-grade lending framework with ZonaLoop’s one-click automation, the protocol removes much of the operational complexity that has traditionally limited advanced yield strategies to experienced users.

Its focus on rigorous asset underwriting, conservative risk parameters, and fully onchain liquidation mechanisms reflects a long-term approach to sustainability rather than short-term incentive-driven growth. If Zona continues to expand high-quality RWA integrations while maintaining strong oracle reliability and liquidity depth, it has the potential to become a core platform for leveraged yield farming and onchain RWA financing.

Frequently Asked Questions