Executive Summary
ZENT operates non-custodial crypto vaults that defend the drawdowns. Users deposit BTC, ETH, SOL or XRP today (zHYPE vault planned for Phase 3) into an ERC-4626 vault running a transparent trend + volatility strategy: it holds the deposited asset while the trend is up and rotates to USDC (cash) when it turns down — spot only, no leverage, no shorts. The vault is non-custodial — users retain 100% custody of their assets throughout. Every rebalance is an EIP-712-signed on-chain transaction and is publicly verifiable.
ZENT is not a hedge fund. There are no minimum investments, no identity verification — fully on-chain — and no 2-and-20 fee structures. The strategy is fully transparent and rules-based, with no fitted parameters: the same rules ran in-sample and out-of-sample across a six-year walk-forward backtest. Honesty is the product — the goal is to end market cycles with more of your asset than simply holding it, at roughly half the drawdown.
Alongside the vault, ZENT offers a Research Network — market structure analysis across crypto, commodities, equities and forex, published weekly and available to ZENT subscribers. Research is not investment advice. It describes market conditions and observable anomalies — funding rate disparities, basis spreads, forward price deviations — without directional recommendations.
ZENT Token
ZENT token serves three functions: vault access, research subscription payments, and governance participation. ZENT is a utility token. It does not represent equity, does not entitle holders to revenue share, and is not marketed as an investment opportunity.
Vault Access
Anti-sybil staking requirement
Subscriptions
Research tiered access
Governance
Protocol parameter voting
Non-Custodial
Users retain 100% custody via ERC-4626 vault architecture
On-Chain Verified
All trades publicly verifiable on HyperEVM
No Minimums
Accessible to any wallet — no accredited investor requirements
Drawdown Defense
Rotates to USDC in downturns to cut max drawdown to roughly half of holding
The ZENTORY Vault
2.1 How It Works
Users deposit BTC, SOL, ETH, XRP or HYPE via an ERC-4626 vault contract. The protocol never takes custody. Instead, the vault runs a transparent trend strategy within a tightly defined mandate: it holds the deposited asset while the trend is up and rotates to USDC when it turns down. Over a full cycle the aim is to hold more of the underlying asset than simply holding it, with materially less drawdown. Users can withdraw at any time by redeeming their shares for the underlying asset.
Supported Assets
BTC
Wrapped Bitcoin
ETH
Wrapped Ether
SOL
Solana
XRP
Ripple
HYPE
Hyperliquid
Deposit Flow
User approves vault contract → deposits underlying asset → receives vault shares ERC-4626 tokens. Shares represent proportional ownership of vault strategy NAV.
Withdrawal Flow
User submits redemption request → vault shares burned → underlying asset transferred to user wallet. No lock-up periods, no withdrawal fees.
2.2 The Strategy: Transparent Trend + Volatility Rotation
The vault runs a single, transparent, directional strategy: it is long the deposited asset when the trend is up and flat (in USDC) when the trend is down. A volatility gate sizes and times the rotation so the vault steps aside during the worst declines. It is spot only — no leverage, no shorts. The rules are fixed and rules-based; there are no fitted parameters, and the same rules ran in-sample and out-of-sample. The edge is drawdown reduction: cutting the depth of losses while staying invested for the upside.
Trend Detection
The vault continuously reads the trend of the deposited asset. When the trend is up, it holds the asset in full to capture the move higher. When the trend turns down, it begins rotating to USDC. The signal is rules-based and transparent — there is no discretion and no directional forecast beyond the measured trend.
Volatility Gate
A volatility gate governs how the vault sizes and times the rotation between the asset and USDC. When volatility spikes alongside a weakening trend, the gate accelerates the move to cash so the vault steps aside during the sharpest declines. The gate is part of the published, fixed rule set — not a discretionary override.
On-Chain Rebalancing
Every rotation between the asset and USDC is executed as an EIP-712-signed on-chain transaction, inside limits enforced by the Solidity vault contract. The signer can only move within the mandate — it cannot exceed position bounds, touch unapproved venues, or take leverage. Each rebalance is recorded and verifiable.
Drawdown Defense
The point of rotating to USDC in downturns is capital preservation: by sitting in cash through the worst declines, the vault aims to cut its maximum drawdown to roughly half that of simply holding the asset. Smaller losses compound less damage, so more of the asset survives the cycle and is still working in the next uptrend. This is a long/flat directional strategy — not a hedged or market-neutral one.
Methodology Note: The strategy is intentionally transparent and rules-based. Proof is published two ways: a public, hash-chained live track record updated every four hours, and a six-year walk-forward out-of-sample backtest with no fitted parameters (in-sample equals out-of-sample). Trade logs, vault NAV, and risk metrics are recorded on-chain and queryable by any user. The current live track record is paper — simulated NAV on real prices — not real capital.
2.3 Non-Custodial Architecture
The vault's non-custodial design is its most critical security property. The protocol never holds user assets. Instead, it operates through a layered architecture that separates asset custody from strategy execution.
Architecture Layers
Layer 1 — Vault Contract (ERC-4626)
The vault contract holds user deposits as tokenized shares. Assets remain in the user's wallet. The contract records share balances and tracks NAV per share. It cannot move assets outside the strategy mandate.
Layer 2 — Strategy Execution
An off-chain signer computes the trend signal and submits EIP-712-signed rebalances between the asset and USDC. Every rotation is checked against Solidity-enforced limits — position bounds, approved assets, no leverage — so the signer can only act inside the mandate, never with arbitrary addresses.
Layer 3 — Governance
Strategy guardrails — maximum position sizes, allowed assets, circuit breakers — are governed by ZENT token holders via multi-sig. Changes require supermajority approval and a timelock period before execution.
User Wallet Sovereignty
Assets never leave the user's wallet. Vault contracts are execution mandates, not custodial accounts.
Solidity-Enforced Limits
The signer can only rebalance between approved assets and USDC, within hardcoded position bounds — no leverage, no shorts, no arbitrary addresses.
Timelocked Governance
Strategy guardrail changes require a governance vote and mandatory timelock before activation.
2.4 Fee Structure
20%
Performance Fee
Only charged on gains above a high-water mark
0%
Management Fee
No annual or monthly management fees
No hidden fees. Deposit, mint, redeem, and withdraw are all free. The 20% performance fee is only charged on gains above a high-water mark — if the vault is below its prior peak, no performance fee is charged until that peak is exceeded again.
Comparison to Hedge Funds: Traditional hedge funds typically charge 2% management fee + 20% performance fee on all profits — including those that merely track an index. ZENT charges 0% management and a performance fee only on gains above a high-water mark. All performance data is for illustrative purposes only; no guarantees are made.
The Research Network
3.1 Market Structure Research
The ZENT Research Network publishes weekly market structure analysis across crypto, commodities, equities and forex. Research is available to ZENT subscribers and describes observable market conditions and anomalies — it does not make directional recommendations or price predictions. Past performance does not guarantee future results.
What Research Covers
Funding Rates
Perpetual futures basis rates across exchanges, term structure, and historical spreads — with context on current rate levels versus historical ranges.
Basis Spreads
Futures-spot basis for BTC, ETH, and SOL across different tenors. Identifies periods when basis exceeds or falls below fair value estimates.
Forward Premiums
Implied rates derived from futures curve shape. Cross-exchange comparisons for cross-venue arbitrage opportunities.
Anomaly Alerts
Detected deviations from normal market structure — unusual funding spikes, basis blowouts, or persistent cross-venue dislocations.
Research is NOT investment advice. The Research Network describes what is happening in markets — funding rates are high, basis is wide, forward premium is elevated — without suggesting whether to long or short any asset. Subscribers use this information to understand the conditions that drive vault performance and to form their own views.
3.2 The ZENT Research Competition
The ZENT Research Competition is a Numerai-style market structure research competition. Quants stake ZENT and publish market structure research — funding rates, basis spreads, anomaly detection — and are scored on accuracy against resolved market data. Top performers receive ZENT from ecosystem allocations and are evaluated for integration into the vault's strategy framework.
Stake & Publish
Researchers stake ZENT to publish market structure analysis to the network. The stake is a bond against accuracy — consistent underperformance results in slashing.
Scored on Reality
Research is scored against resolved market data. Did the identified anomaly resolve as described? Was the basis spread captured? Scores are public and on-chain.
ZENT Rewards
Top performers receive ZENT from ecosystem allocations. The best researchers are evaluated for vault strategy integration.
Public Verification
All research submissions, scores, and payouts are recorded on-chain. A permanent, incorruptible track record — no selective reporting, no opaque black box.
The Research Competition serves two purposes: it crowdsources the best market structure analysis from independent quants worldwide, and it creates a transparent, on-chain track record that demonstrates the quality of research available to subscribers — a verifiable proof of the network's analytical capability.
3.3 Cross-Asset Expansion
The Research Network and the ZENTORY Vault are designed for multi-asset expansion. Each phase adds new asset classes, leveraging the same ERC-4626 architecture and market structure framework.
Phase 1 — Crypto (Now)
Live on HyperEVM TestnetAssets: BTC, SOL, ETH, XRP, HYPE
Core vault strategies deployed for major crypto assets. Research network publishing weekly crypto market structure reports.
Phase 2 — Commodities (Q3 2026)
In DevelopmentAssets: Tokenized Gold (XAUT, PAXG), Silver
Vault expansion to tokenized commodities via partners. Basis trade opportunities between on-chain and off-chain commodity markets.
Phase 3 — Equities (Q4 2026)
PlannedAssets: RWA Equity (via Securitize, Ondo)
RWA equity integration enables vault strategies to capture basis between tokenized equities and their off-chain counterparts. Institutional vault tier.
Phase 4 — Forex (2027)
PlannedAssets: Majors via CASP Licensed Partners
Forex integration via CASP-licensed liquidity providers. Carry trade analysis and cross-border basis capture across fiat currency pairs.
ZENT Token
4.1 Token Utility
ZENT is a utility token with three primary functions within the protocol. It is not a security — it does not represent equity, does not entitle holders to a share of protocol revenue, and is not marketed as an investment opportunity.
Vault Access (Anti-Sybil)
Users must stake ZENT to access the vaults — deposit, redeem, and track performance. Staking creates an anti-sybil mechanism that prevents automated bot activity and aligns long-term holders with protocol health.
Research Subscriptions
ZENT pays for tiered access to the Research Network — from basic weekly reports to real-time anomaly alerts and competition data. Subscriptions are ZENT-denominated operational payments, not investment products.
Governance
ZENT holders vote on vault risk parameters, maximum position sizes, circuit breaker thresholds, new asset approvals, and keeper incentive allocations. Governance is the primary decentralisation mechanism.
4.2 Token Distribution
ZENT has a fixed total supply of 1,000,000,000 tokens. No admin mint key exists — supply is permanent and immutably capped. All allocation is locked in smart contracts and programmatically released on schedule.
| Allocation | % | Tokens | Vesting Schedule |
|---|---|---|---|
| Quant Contributor Rewards | 22% | 220M | Emitted via EpochScoring to accurate, stake-backed signals |
| Treasury | 20% | 200M | Time-locked, governance-released; growth, partnerships, runway |
| Team & Founders | 18% | 180M | 4-year linear vest, 1-year cliff from TGE |
| LP Rewards | 10% | 100M | 24-month linear, front-loaded to first-6-month depositors |
| Strategic Round | 10% | 100M | 18-month linear, 6-month cliff |
| Protocol-Owned Liquidity | 8% | 80M | HyperSwap ZENT/USDC seed pool, locked 12 months |
| Public DEX Float | 5% | 50M | Unlocked at TGE for HyperSwap trading |
| Bug Bounty & Insurance | 4% | 40M | Multisig-controlled draw-on-pay pool (Immunefi + insurance seed) |
| Testnet Airdrop | 3% | 30M | 25% at TGE, 75% linear over 6 months (MerkleDistributor) |
TGE = Token Generation Event. Team vesting is longer than investor vesting — a deliberate alignment signal. All allocations are in time-locked smart contracts, not externally owned accounts.
4.3 ZENT Is NOT a Security
This point is critical and non-negotiable.
ZENT is a utility token. It provides access to vault services, research subscriptions, and governance rights. It does not represent equity in Zentory Labs or any affiliate. It does not entitle holders to any share of revenue, profit, or assets. Holding ZENT does not create an investment relationship between the holder and the protocol.
Not a Security Because:
- No equity or ownership claim
- No revenue or profit share
- No promise of financial return
- No investment contract relationship
Value Derives From:
- Utility demand for vault access
- Research subscription payments
- Governance participation rights
- Scarcity from buyback and burn
Regulatory Design: ZENT is designed to comply with applicable regulations, including the SEC Howey test in the United States and MiCA regulations in the European Union. The team has obtained legal counsel on token classification and will continue to monitor regulatory developments. This document does not constitute legal advice — users should consult qualified counsel regarding their own jurisdiction.
Roadmap
Phase 1 — ZENTORY Vault (Now)
April 2026- ZENTORY Vault live on HyperEVM Testnet (Chain 998)
- ZENT token deployed with staking and governance
- Research Network publishing weekly crypto market structure reports
- Transparent trend + volatility strategy for BTC, ETH, SOL, XRP (zHYPE vault scheduled for Phase 3)
- First Research Competition participants onboarded
Phase 2 — Mainnet & Commodities
Q1 2027 (gated on external audit)- ZENTORY Vault on HyperEVM Mainnet (gated on external audit)
- Tokenized commodity vault integration (gold, silver)
- ZK proof implementation for trade verification
- Research subscriber tier system launched
- Target: TVL growth as protocol matures
Phase 3 — RWA & Institutional
2027 (post-mainnet)- RWA equity partnerships (Securitize, Ondo)
- Institutional vault tier with transparent on-chain access
- Multi-sig governance upgrade — full DAO transition
- Strategy parameter governance fully on-chain
- Target: scaled TVL with institutional access
Phase 4 — Forex & Multi-Asset
2028- Forex carry trade research via CASP-licensed partners
- Full multi-asset vault — crypto, commodities, equities, forex
- zkML verification for strategy execution
- Competitions expanded to cross-asset market structure
- Target: multi-asset vault scaling
Legal Disclaimer
Important Disclosures
1. ZENT Token Classification
ZENT is a utility token. It is not a security, investment contract, or financial instrument. Purchasing ZENT does not create an investment relationship, equity ownership, or entitlement to any share of revenue, profit, or assets of Zentory Labs, the ZENT Protocol, or any affiliated entity. ZENT is not marketed or sold as an investment opportunity. The value of ZENT, if any, derives entirely from its utility functions within the protocol.
2. The ZENTORY Vault Involves Algorithmic Trading
The ZENTORY Vault uses a systematic, directional trend strategy to rotate between the deposited asset and USDC. This strategy carries inherent risks, including but not limited to:
- Market risk: market conditions may cause strategies to underperform or generate negative returns
- Execution risk: slippage, venue failures, and oracle inaccuracies may impact outcomes
- Model risk: algorithms may behave unexpectedly in unprecedented market conditions
- Smart contract risk: vulnerabilities in vault contracts could result in loss of funds
- Liquidity risk: positions may be difficult to close during market dislocations
Past performance does not guarantee future results. Backtested results, historical returns, and hypothetical scenarios are not indicative of future performance. The vault's strategies may lose value or become entirely worthless.
3. No Investment Advice
Nothing on this website, in this whitepaper, or in any ZENT Research Network publication constitutes financial, investment, legal, tax, or other professional advice. The Research Network describes observable market conditions — funding rates, basis spreads, forward premiums, and anomalies — without making directional recommendations. Readers should form their own independent assessments and consult qualified advisors before making any financial decisions.
4. Non-Custodial Nature and User Responsibility
The ZENTORY Vault is non-custodial. Users retain 100% custody of their assets. This means that users are solely responsible for the security of their own wallets, private keys, and recovery phrases. Zentory Labs does not have the ability to access, freeze, or recover user funds. Users who lose their private keys or suffer wallet compromise will lose their assets permanently. Users must independently verify that the vault contracts they interact with are authentic, official deployments.
5. Regulatory Variability
The regulatory status of ZENT tokens, vault shares, and related activities varies by jurisdiction. Some jurisdictions may classify ZENT or vault participation as a regulated activity. Users are solely responsible for understanding and complying with applicable laws in their jurisdiction. The protocol may be modified or restricted in response to regulatory developments. Zentory Labs does not warrant that the protocol is legal in any particular jurisdiction.
6. Research Network Disclosures
Research published through the ZENT Research Network is based on observable market data and is intended for informational purposes only. Research is not investment advice, financial guidance, or a recommendation to buy, sell, or hold any asset. Research competition submissions are the views of independent contributors, not of Zentory Labs. The protocol does not endorse or verify the accuracy of third-party research published through the network.
This whitepaper is provided "as is" without warranty of any kind, express or implied, including but not limited to warranties of merchantability, fitness for a particular purpose, or non-infringement. In no event shall Zentory Labs, its founders, employees, or affiliates be liable for any direct, indirect, incidental, special, or consequential damages arising from the use of this document, the ZENT Protocol, or any related services.
This whitepaper is intended for informational purposes only and is subject to change. The protocol described herein is under active development and features described may change prior to full deployment. This document was prepared as of the date indicated and may be updated without notice.
Prospective participants should conduct their own independent due diligence and consult with qualified legal, financial, and tax advisors before making any decisions related to ZENT tokens, vault participation, or research subscriptions.
Disclaimer: This site is for informational purposes only. Nothing herein constitutes an offer or solicitation to buy, sell, or hold any token, security, or investment. ZENT is a utility token — not a security. All crypto investments involve substantial risk, including possible total loss. Not legal or investment advice.
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