What Is Frankencoin?
Frankencoin (ticker: ZCHF) is a decentralized stablecoin that tracks the value of the Swiss franc (CHF). Unlike many stablecoins that rely on centralized oracles, trusted price feeds, or opaque reserve management, Frankencoin uses a novel oracle-free collateralization mechanism. This means the protocol can function securely without depending on external price data that could be manipulated or become unavailable.
Deployed on Ethereum, Frankencoin allows anyone to lock up accepted crypto collateral — such as WBTC, WETH, wstETH, PAXG, and more — and mint freshly created ZCHF tokens directly against it. When borrowers repay their loans and return the ZCHF, those tokens are burned, maintaining the integrity of the supply.
"Frankencoin is collateralized, oracle-free, and governed by its community — setting a new standard for trust-minimized stablecoins on Ethereum."
Our Mission
The mission of Frankencoin is to provide the DeFi ecosystem with a stable, CHF-pegged asset that is:
- Truly decentralized — no central authority controls the minting, burning, or governance of ZCHF.
- Transparent — all collateral, positions, and protocol parameters are verifiable on-chain at any time.
- Resilient — the oracle-free design removes a critical attack vector present in most stablecoin protocols.
- Community-governed — ZCHF equity holders (FPS token holders) participate in protocol governance and share in the protocol's revenue.
Key Features of Frankencoin
Collateral-Backed
Every ZCHF in circulation is backed by crypto collateral locked in smart contracts, ensuring full on-chain transparency of reserves.
Oracle-Free Design
The protocol does not rely on external price oracles. Position proposers set their own liquidation prices, subject to a community challenge period.
Community Governance
FPS (Frankencoin Pool Share) token holders vote on new collateral proposals and protocol parameters through on-chain governance.
Multiple Collateral Types
Borrow ZCHF against WBTC, cbBTC, WETH, wstETH, LsETH, PAXG, XAUt, CRV, GNO, and many more accepted assets.
Savings Module
ZCHF holders can earn yield by depositing into the savings module, funded by borrowing interest paid by position owners.
Morpho Integration
Frankencoin is also available to borrow at variable rates through the Morpho lending protocol, expanding access to ZCHF liquidity.
How Frankencoin Works
The core mechanism of Frankencoin is elegantly simple. A borrower who wants to mint ZCHF opens a position by:
- Step 1 — Propose a Position: The borrower proposes a new lending position, specifying their chosen collateral asset, a liquidation price, an interest rate, and a maximum loan size. This proposal enters a mandatory waiting period (typically 5 days) during which the community can challenge it if the terms are unreasonable.
- Step 2 — Deposit Collateral: After the challenge period, the borrower deposits their collateral into the position contract.
- Step 3 — Mint ZCHF: Fresh ZCHF tokens are minted and sent directly to the borrower's wallet, up to the allowed loan-to-value limit.
- Step 4 — Repay and Unlock: To retrieve their collateral, the borrower returns the borrowed ZCHF (plus any accrued interest). The returned ZCHF is burned, removing it from circulation.
If a position becomes undercollateralized — for example, because the collateral's market price drops below the liquidation threshold — any participant can trigger a liquidation auction to repay the debt and claim the collateral.
The Swiss Franc Peg
Frankencoin is designed to track the value of the Swiss franc (CHF), one of the world's most stable and trusted currencies. Switzerland's political neutrality, robust financial system, and strong rule of law have historically made the CHF a safe-haven currency. By pegging to CHF, Frankencoin offers DeFi users exposure to a stable asset that is distinct from the USD-dominated stablecoin landscape.
The peg is maintained through the collateral mechanics and market arbitrage: if ZCHF trades above 1 CHF, it becomes profitable to mint more ZCHF and sell it; if it trades below 1 CHF, it becomes profitable to buy ZCHF and repay loans, reducing supply.
Governance and the FPS Token
The Frankencoin protocol is governed by holders of the Frankencoin Pool Share (FPS) token. FPS represents equity in the protocol — holders benefit from protocol revenue (generated by borrowing fees) and bear the risk of covering any shortfalls.
Key governance powers include:
- Voting to approve or reject new collateral types and position proposals.
- Setting protocol-level risk parameters.
- Managing the equity reserve buffer that protects ZCHF holders.
- Directing protocol treasury funds.
FPS holders can invest in the protocol through the Invest page and participate in shaping the future of Frankencoin.
Security and Audits
The security of Frankencoin is paramount. The smart contracts powering the protocol have been developed by experienced Solidity engineers and reviewed by independent security researchers. The codebase is fully open-source and available on GitHub, enabling continuous community review.
The oracle-free architecture significantly reduces the attack surface compared to oracle-dependent protocols, eliminating flash-loan oracle manipulation as a threat vector. The collateralization model and challenge period further protect against undercollateralized positions entering the system.
Ecosystem and Integrations
Frankencoin is integrated with several major DeFi protocols and platforms:
- Morpho: Variable-rate ZCHF borrowing markets on the Morpho lending platform.
- Curve Finance: CRV token is accepted as collateral for minting ZCHF.
- Lido / Liquid Staking: wstETH and LsETH are supported collateral types.
- Coinbase: cbBTC (Coinbase Wrapped BTC) is accepted as collateral.
- Paxos / Tether Gold: PAXG and XAUt gold-backed tokens are accepted, linking Frankencoin to physical gold reserves.
- Ondo Finance: SPYon (tokenized S&P 500 ETF) is accepted as collateral, connecting TradFi and DeFi.
Why Choose Frankencoin?
In a crowded stablecoin landscape, Frankencoin stands out for several reasons:
- CHF denomination: Access a non-USD stablecoin backed by one of the world's strongest currencies.
- No oracle risk: The protocol's oracle-free design is a fundamental security improvement over Chainlink-dependent or other oracle-reliant stablecoins.
- Earn on your ZCHF: Unlike many stablecoins that generate no yield for holders, ZCHF holders can earn interest through the savings module.
- True decentralization: No admin keys, no central mint authority, no blacklisting — just smart contracts and community governance.
- Diverse collateral: From Bitcoin to tokenized gold to real-world assets, Frankencoin accepts a wide range of collateral types.
Community and Resources
The Frankencoin community is active across multiple platforms. Join the conversation, ask questions, and stay up to date:
- Twitter/X: @frankencoinzchf for the latest news and announcements.
- Telegram: t.me/frankencoinzchf for community chat.
- GitHub: Frankencoin-ZCHF for open-source code.
- Documentation: docs.frankencoin.com for technical documentation.
- Governance Discussions: GitHub Discussions for governance proposals.
- Newsletter: Frankencoin Substack for in-depth updates.