zkETH, an ETH LST built for the Elastic Chain, launched in December 2024. Since then, it has grown into one of the largest assets on ZKsync Era, attracting over 45,500 depositors seeking the highest ETH staking yields available. Now with zkETH listed as a collateral asset on Venus Protocol, users have a new venue to unlock liquidity and earn additional yield.
In this guide, I’ll walk through everything you need to know about using zkETH—including how to obtain it, supply it on Venus, borrow against it, and maximize your yield.
Overviews
Before we start, let's go over all the details to make sure you're fully prepared.
What is zkETH (zkETH)?
zkETH is a native ETH LST that delivers DeFi’s highest ETH staking yield to users and builders on the Elastic Chain. It can be minted with ETH on Ethereum mainnet, ZKsync Era, and soon on other Elastic Chains.
With a current yield of 3.89%, zkETH is an attractive collateral asset on lending protocols like Venus, where staking rewards can offset a portion (or even all) of borrowing costs and improve capital efficiency.
What is Venus Protocol?
Venus Protocol is a leading money market on ZKsync Era, allowing users to supply crypto assets, borrow against them, and earn interest. While Venus offers additional features on other networks, such as stablecoin minting (VAI) and isolated lending pools, its deployment on ZKsync Era only supports a Core Pool.
In this shared liquidity model, users can deposit one supported asset as collateral and borrow another from the same pool—similar to protocols like Aave. To learn more, visit their docs.
Obtaining zkETH
The steps for minting zkETH were covered in a previous guide. The only change is a smoother user experience, thanks to our integration of Enso! Users can now deposit any asset to mint zkETH, and receive their ETH directly on ZKsync Era when unstaking.
Earning on Venus Protocol
To get started, head to the ZKsync Era Core Pool. You'll find all supported assets along with stats such as:
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Supply APY: Interest earned for supplying an asset
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Borrow APY: Interest paid for borrowing an asset
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Total Supply: Amount of an asset currently supplied
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Total Borrow: Amount of an asset currently borrowed
Next, click on zkETH. Before you get started, let’s review two key stats:
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Max LTV (Loan-to-Value): This is the maximum you can borrow against your zkETH. For example, if you deposit $1,000 worth of zkETH and the Max LTV is 70%, you can borrow up to $700 in another supported asset.
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Liquidation Threshold: This is the ratio at which your position becomes eligible for liquidation. If the value of your zkETH drops and your borrowed amount exceeds 75% of your collateral value, your position may be liquidated.
To deposit, follow the steps below:
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Connect your wallet
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Enter the amount of zkETH you’d like to deposit
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Click “Deposit” and sign the transaction
You can now borrow any other supported asset in the core pool. While you may borrow up to the Max LTV, it’s generally recommended to stay below that threshold to reduce liquidation risk.
zkETH Looping Strategy
For users looking to amplify their exposure to ETH, zkETH can be used in a looped leverage strategy. After depositing zkETH as collateral on Venus, you can borrow a supported stablecoin, use the borrowed asset to mint more zkETH, and supply it back to Venus—allowing you to repeat the process.
Each loop increases your total zkETH position. However, it also increases your liquidation risk with each cycle, so it’s important to monitor your LTV ratio.
If you encounter any issues, open a support ticket in the Discord.