Introduction

An Introduction to staking on Horizon Protocol

The cornerstone of Horizon Protocol is staking HZN to mint new zUSD, the foundational element for all synthetic assets, known as zAssets, in the Horizon Protocol ecosystem.

Within this ecosystem, a pivotal function is to maintain the collateralization ratio by providing staking mechanisms for network stability, and facilitate the creation of zAssets. This crucial role is instrumental in launching the first zAsset on the Horizon Protocol, zUSD, which is minted using HZN as collateral.

Horizon Protocol creates zAssets through collateralization, similar to using an asset as security for a loan, or debt. Stakers actively manage liquidity by maintaining a healthy debt-to-collateralization ratio, also known as "C-Ratio." This ratio safeguards both stakers and the protocol against default risk.

In summary, the fundamental core of Horizon Protocol are its zAssets, created by staking HZN to mint zUSD, establishing staking as the backbone of the protocol.