Frankencoin Help Center
Frequently Asked Questions about Frankencoin
Everything you need to know about borrowing ZCHF, earning yield, governance, and how the Frankencoin protocol works on Ethereum.
ZCHF
Native Stablecoin Token
Oracle-Free
No Price Oracles Required
Ethereum
Deployed Network
Getting Started with Frankencoin
What is Frankencoin and how does ZCHF work?
Frankencoin is a decentralized, collateral-backed stablecoin protocol built on Ethereum. The native token, ZCHF (Frankencoin), is designed to track the value of the Swiss franc (CHF). Unlike many other stablecoins, Frankencoin does not rely on external price oracles to function — instead, it uses an innovative challenger mechanism where positions are maintained honest through economic incentives.
Key characteristics of Frankencoin: fully decentralized issuance, no oracle dependency, collateral-backed at all times, and governed by FPS token holders.
- ZCHF tracks the value of 1 Swiss franc (CHF)
- Collateral is locked in smart contracts on Ethereum
- New ZCHF is minted when you open a position
- The protocol is governed by holders of Frankencoin Pool Shares (FPS)
How do I borrow ZCHF on Frankencoin?
Borrowing ZCHF on Frankencoin is a straightforward three-step process. You choose a supported collateral asset, define your loan terms, and receive freshly minted ZCHF directly into your wallet.
- Step 1 — Choose a collateral: Select from supported assets such as WBTC, cbBTC, WETH, wstETH, PAXG, XAUt, GNO, CRV, and more.
- Step 2 — Define terms: Set your desired loan amount, liquidation price, and maturity date within the limits of the chosen position.
- Step 3 — Receive ZCHF: Once your collateral is deposited and the challenge period passes, ZCHF is minted to your wallet.
Each collateral type has its own Loan-to-Value (LTV) ratio and maximum maturity. Always ensure your liquidation price provides sufficient buffer against market volatility.
What collateral assets does Frankencoin accept?
Frankencoin supports a diverse range of collateral assets, each with its own risk parameters, LTV ratio, and interest rate. All positions are governed by community-approved proposals.
- WBTC / cbBTC — Wrapped Bitcoin variants, up to ~66% LTV
- WETH / LsETH / wstETH — Ethereum and liquid staking derivatives
- PAXG / XAUt — Gold-backed tokens, up to ~70% LTV
- GNO — Gnosis Token
- CRV — Curve DAO Token
- VCHF / REALU — Swiss franc and RealUnit assets
- SPYon / ysyBOLD / LENDS / BOSS — Additional approved collaterals
New collateral types can be proposed by anyone and must go through a governance challenge period before being listed on Frankencoin.
What happens if my Frankencoin position is liquidated?
If the market price of your collateral falls to or below your set liquidation price, your position becomes eligible for liquidation through the Frankencoin challenge mechanism. This is a unique, oracle-free process.
- A challenger buys your collateral at the liquidation price using ZCHF
- If no one challenges, the auction proceeds and collateral is sold
- The proceeds repay your loan; any excess collateral is returned to you
- You keep the ZCHF you originally borrowed
To avoid liquidation on Frankencoin, maintain a comfortable buffer between the current market price and your liquidation price. You can repay your loan at any time before maturity.
The Frankencoin challenge system is designed so that challengers are incentivized to act honestly — they risk losing funds if they challenge a position that is genuinely well-collateralized.
How does Frankencoin governance and FPS token work?
The Frankencoin protocol is governed by holders of Frankencoin Pool Shares (FPS). FPS represents ownership in the equity reserve pool and gives holders economic rights and governance power over the protocol.
- FPS holders earn a share of protocol fees and interest income
- FPS can be bought and redeemed against the reserve pool at any time
- Governance proposals (e.g., new collateral types) require a waiting period during which FPS holders can veto
- The reserve pool acts as a buffer absorbing protocol losses
Investing in FPS means you are providing equity to the Frankencoin system. The value of FPS depends on the health and growth of the protocol's reserve pool.
How can I earn yield with Frankencoin ZCHF?
There are multiple ways to earn yield through the Frankencoin ecosystem, both directly in the native protocol and through integrated DeFi platforms.
- Savings Module (Earn): Deposit ZCHF into the native savings module to earn a variable interest rate paid by borrowers.
- FPS Investment (Invest): Buy Frankencoin Pool Shares to receive a proportional share of all protocol revenue.
- Morpho Integration: Supply ZCHF liquidity to Morpho lending markets for variable borrow interest.
- Liquidity Providing: Provide ZCHF liquidity on DEXes like Curve or Uniswap for trading fees and incentives.
Is Frankencoin safe? What are the risks?
Frankencoin has been developed with extensive security in mind, including smart contract audits and an innovative economic design that removes oracle dependency. However, as with all DeFi protocols, risks exist.
- Smart contract risk: Bugs or vulnerabilities in the code could lead to loss of funds, though the contracts have been audited.
- Collateral price risk: If collateral value drops rapidly, positions may be liquidated.
- Peg stability risk: ZCHF may not always trade exactly at 1 CHF on secondary markets.
- Governance risk: Malicious proposals could be submitted during the governance window.
- Counterparty risk (Morpho): Third-party integrations carry their own contract risks.
Always do your own research before interacting with Frankencoin. The protocol is non-custodial — you retain full control of your assets, but you are also responsible for your own positions.
How do I connect my wallet to Frankencoin?
Connecting to Frankencoin is easy and works with any Web3-compatible wallet. The app uses WalletConnect, supporting hundreds of wallets.
- Click "Connect Wallet" in the top right corner of the Frankencoin app
- Choose your preferred wallet (MetaMask, Coinbase Wallet, Ledger, Rainbow, etc.)
- Make sure you are on the Ethereum Mainnet network
- Approve the connection request in your wallet
- You can now borrow, earn, and invest through Frankencoin
Frankencoin is deployed on Ethereum Mainnet. Ensure you have ETH for gas fees before interacting with the protocol.
Can I propose new collateral types on Frankencoin?
Yes! Frankencoin is an open, permissionless protocol. Anyone can propose a new collateral position by interacting with the governance contract. However, the proposal must survive a challenge period before going live.
- Navigate to the "Propose New Position or Collateral" section in the Frankencoin app
- Define your collateral asset, minimum collateral amount, liquidation price, interest rate, and maturity
- Pay the initialization fee (burned as ZCHF)
- A challenge period begins — FPS holders can veto the position
- If no veto occurs, the position goes live and you can start borrowing
Proposing a position requires careful parameterization. Poorly set liquidation prices or LTV ratios could result in financial loss to the proposer if challenged.
Where can I find the Frankencoin documentation and source code?
Frankencoin is a fully open-source project. All smart contracts, the frontend application, and technical documentation are publicly available.
- Documentation: docs.frankencoin.com — comprehensive technical and user guides
- Smart Contracts: github.com/Frankencoin-ZCHF/Frankencoin
- Frontend App: github.com/Frankencoin-ZCHF/frankencoin-dapp
- Community Discussions: GitHub Discussions
- Twitter / X: @frankencoinzchf
- Telegram: t.me/frankencoinzchf