# Usual Zero Rate (Fira)

## Market Parameters

| Parameter                    | Value                                         |
| ---------------------------- | --------------------------------------------- |
| Collateral asset             | bUSD0 (Bonded USD0)                           |
| Loan asset                   | USD0                                          |
| Base borrowing rate          | 0%                                            |
| Protocol fee                 | 0.10% APR (10 bps)                            |
| LTV                          | 88%                                           |
| LLTV (Liquidation threshold) | 99.99%                                        |
| Oracle                       | Fixed-price 1:1 (bUSD0/USD0)                  |
| Maturity                     | June 11, 2028, 11:30 UTC                      |
| Chain                        | Ethereum Mainnet                              |
| Interest rate contract       | Immutable — cannot be changed post-deployment |

## How It Works

1. **Deposit** bUSD0 as collateral into the UZR market.
2. **Borrow** up to 88% of the collateral value in USD0.
3. **Accrue** a 0.10% APR fee continuously on outstanding debt.
4. **Repay** debt at any time before maturity to recover collateral.

The borrowing cost is set at deployment and cannot change. The interest rate strategy contract is immutable once the market is created.

## Oracle Design

UZR uses a **fixed-price oracle** that values bUSD0 at a constant 1:1 ratio with USD0 for all LTV calculations. This is a deliberate design choice:

* **Benefit**: Consistent borrowing capacity regardless of secondary market price fluctuations. Higher effective leverage compared to mark-to-market oracles.
* **Assumption**: If bUSD0 trades below 1 USD0 on secondary markets, the protocol still values it at 1. This trust assumption is accepted given bUSD0's redemption guarantee at maturity.

## Fee Structure

The 0.10% APR fee accrues continuously on outstanding debt — not per borrow event. All fees route directly to the Usual Treasury.

|                 | Euler (USL)      | Fira (UZR)     |
| --------------- | ---------------- | -------------- |
| Borrow rate     | \~1.5–2%         | 0% + 0.10% fee |
| Max leverage    | \~8.1x           | \~12.3x        |
| Fee destination | Euler + external | Usual Treasury |
| Oracle          | Mark-to-market   | Fixed 1:1      |

## Lending Side

The Usual DAO is the sole lender on UZR. The DAO sets lending caps and supplies USD0 directly. Individual users cannot lend on this market.

This design gives the DAO full control over exposure while routing all protocol revenue to the Usual Treasury.

## Migration from Euler

Migration from USL (Euler) to UZR (Fira) is executed through a dedicated migrator contract in a single atomic transaction:

1. DAO enables migration capacity (makes USD0 borrowable against U0R).
2. bUSD0 collateral is withdrawn from Euler.
3. bUSD0 is posted as collateral on UZR.
4. USD0 is borrowed on UZR at the same effective LTV (88% ceiling).
5. Borrowed USD0 repays the Euler debt.
6. The Euler loan token is burned as the position closes.

Migration is **opt-in**. Euler remains available; positions are not forced to migrate. No additional protocol fees are charged beyond gas costs.

## Available Features

UZR supports all Fira protocol-level features:

* **Borrow & Repay** — Deposit bUSD0, borrow USD0, repay before maturity
* **Leverage Loop** — Recursive borrowing to amplify exposure to the bUSD0 discount-to-par convergence (up to \~12.3x)
* **Multiply** — One-click leverage loop via a slider interface

## Technical Reference

| Detail             | Value                                                                |
| ------------------ | -------------------------------------------------------------------- |
| Market ID          | `0xA597B5A36F6CC0EDE718BA58B2E23F5C747DA810BF8E299022D88123AB03340E` |
| IRM contract       | `0xdfCF197B0B65066183b04B88d50ACDC0C4b01385`                         |
| Oracle contract    | `0x30Da78355FcEA04D1fa34AF3c318BE203C6F2145`                         |
| Lending market     | `0xa428723eE8ffD87088C36121d72100B43F11fb6A`                         |
| USD0 (loan token)  | `0x73A15FeD60Bf67631dC6cd7Bc5B6e8da8190aCF5`                         |
| bUSD0 (collateral) | `0x35D8949372D46B7a3D5A56006AE77B215fc69bC0`                         |

### Risks

Multiply amplifies both upside and downside. Higher leverage means higher exposure to the following risks:

#### No Liquidation Before Maturity

UZR uses a fixed 1:1 oracle (bUSD0/USD0) and sets the liquidation threshold (LLTV) at 99.99%, far above the 88% maximum borrow LTV. Since the oracle price never moves, only interest accrual (0.10% APR) changes the LTV. From 88%, reaching 99.99% would take over a century. Positions cannot be liquidated before maturity.

At maturity, the Usual DAO can trigger **forced liquidation** to close remaining positions and enable collateral redemption. This is an intentional design for a maturity-based system, not a penalty — borrowers should repay or close positions before the maturity date.

#### Slippage Risk

Each loop iteration involves a USD0 → bUSD0 swap on secondary markets. At high leverage levels, the cumulative swap volume increases. Large swaps may incur price impact, especially in low-liquidity conditions.

#### Interest Accumulation

The 0.10% APR fee accrues on the total debt, not just the initial borrow. A 5x leveraged position accrues fees on 5x the initial collateral value in debt. Over long durations, this compounds.

## Simulator

Stress-test UZR parameters, sprice, LTV, maturity, in the live simulator: [simulator.fira.money](https://simulator.fira.money/)

## Related

* Markets Overview — How Fira markets work
* Liquidations — Position health and liquidation mechanics
* UIP-18: UZR Launch — Governance proposal that authorized UZR deployment
* Whitepaper: UZR Bootstrapping — Formal specification (Section 6)