ZeroLend

ZeroLend is a decentralized lending protocol that enables users to lend and borrow crypto assets across multiple Layer 2 networks, including Linea, zkSync, Manta, Blast, and X Layer. The protocol also supported liquid restaking tokens and real-world assets (RWAs). ^[1]

In February 2026, ZeroLend announced that it would wind down operations, citing unsustainable market conditions and operational challenges. ^[12]

Overview

Launched in 2023, ZeroLend serves as a lending protocol with a focus on LRTs (Liquid Restaking Tokens), RWA (Real World Asset) lending, privacy, and account abstraction. ^[8]​

On May 22, 2024, ZeroLend partnered with Hypernative, an institutional-grade Web3 real-time security platform to reinforce security for the marketplace. ^[9]​

"With Hypernative's advanced detection system, ZeroLend aims to proactively prevent threats, exploits, or other malicious activities, maintaining the integrity and security of our lending markets." - the blog post mentioned^[9]

Products

DeFi Lending

This is a decentralized, non-custodial liquidity protocol that enables users to participate as liquidity providers and borrowers. This feature allows individuals to leverage their crypto holdings to access additional liquidity or earn yields by supplying assets to the lending pool. ^[3]​

Liquid Restaking Token Lending

Users can deposit LRTs like EtherFi, Puffer, Renzo, and Kelp and take loans in stablecoins/ETH. By depositing LRTs, users can unlock extra liquidity while still earning staking rewards, thereby maximizing the utility of their staked assets. ^[4]​^[7]​

Real World Asset (RWA) Lending

ZeroLend allows the lending and borrowing of RWAs, which represent assets like stocks, bonds, real estate, and commodities tokenized on the blockchain. This feature provides access to capital by allowing users to leverage tangible assets as collateral for loans on the blockchain. ^[3]​

Account Abstraction

Account Abstraction improves DeFi transactions by removing complexities associated with traditional crypto wallets and gas fees. Users can utilize gas-less transactions, social logins, and delegated transactions, enhancing the overall user experience and accessibility of the platform. ^[3]​

ZeroLend Token (ZERO)

Launched in May 2024, $ZERO is a Linea ERC-20 token, serving as a utility and governance token within the ZeroLend ecosystem and bridgable to all chains using LayerZero. Holders of ZERO tokens have the power to govern the protocol, influencing decision-making processes and shaping the platform's future direction. ^[3]​^[5]​

ZERO has a total supply of 100,000,000,000 (100 billion) with 35% of the total supply allocated to Private Sale, 18% to Airdrop, 10% to Liquidity, 20% to Emissions, 5% to Treasury, 7% to Advisors, and 5% to the Team. ^[5]​

Utility

• Staking: Staking $ZERO tokens for a predetermined duration and receiving vote-escrowed (ve) tokens. Zerolend introduces a unique ve-model that incorporates both single token staking and dLP staking.
• Protocol Fees: $ZERO tokens can be used to pay fees on ZeroLend.
• Incentives: Users who add liquidity on ZeroLend, refer users to ZeroLend, or complete other tasks to grow the protocol will be rewarded using $ZERO tokens. All future potential airdrops the protocol receives will also be distributed back amongst token stakers.
• Integration with DeFi Ecosystem: ZERO as collateral for DeFi loans, yield farming, or leverage its utility across other DeFi use cases. ^[6]

ZeroLend One

The whitepaper for ZeroLend One was introduced in June 2024. ZeroLend One is the next version (v2) of the ZeroLend protocol and it introduces a highly scalable multi-chain lending protocol that is permissionless, isolated, and curates risk management. ^[10]​

"Why ZeroLend One? We saw a problem with the current v1 as we could not scale risk management nor could we scale the demand for many new assets to get listed on ZL. Risk management is expensive and we needed a way to scale faster. v2 solves these problems" - the team tweeted^[11]

ZeroLend One features Permissionless Lending Pools, Liquidity Hooks, Automated Risk Manager, User-set Fixed Rate Lending, NFT Positions, Margin Trading, etc. Development for ZeroLend One is still underway. ^[10]​^[11]​

ZeroLend Announces Wind-Down of Protocol Operations

On February 16, 2026, the ZeroLend team announced that it would begin winding down protocol operations after concluding that the lending platform was no longer economically sustainable. The decision came after approximately three years of development and operation. ^[12]

According to the team, several factors contributed to the shutdown. Many of the blockchain networks that ZeroLend initially supported had become inactive or experienced significant declines in liquidity. In some cases, oracle providers discontinued support for these networks, making it increasingly difficult to operate lending markets reliably or generate sustainable revenue. The team also cited the growing security challenges associated with operating a lending protocol, noting that increased attention from hackers and scammers, combined with the inherently thin margins of decentralized lending, resulted in extended periods of operating at a loss. ^[12]

ZeroLend stated that its immediate priority was ensuring users could safely withdraw their assets. Most lending markets had already been reconfigured with a 0% loan-to-value (LTV) ratio, effectively preventing new borrowing while encouraging users to withdraw their remaining funds from the platform.

The announcement also addressed assets on networks including Manta, Zircuit, and XLayer, where deteriorating liquidity had left some funds locked in illiquid or inactive markets. To facilitate the recovery of these assets, the team announced plans to execute a timelock upgrade that would modify the protocol’s smart contracts and enable the redistribution of affected funds. The stated objective of the upgrade was to maximize asset recovery for users impacted by the wind-down.

For users holding LBTC on Base, the team referenced a security incident that had occurred in February 2025. ZeroLend stated that it had been working to trace and recover the affected funds and announced that LBTC suppliers on Base would receive a partial refund funded through the team’s allocation from the LINEA airdrop. Affected users were instructed to contact project moderators or submit support tickets to coordinate the refund process.

The team described the announcement as the conclusion of the ZeroLend project and thanked its community, contributors, partners, and supporters for their involvement. During the wind-down process, users were encouraged to withdraw any remaining assets and rely only on ZeroLend’s official support channels for assistance. ^[12]