What is Frankencoin?

Frankencoin (ZCHF) is a decentralized stablecoin pegged to the Swiss franc. Unlike centralized stablecoins such as USDT or USDC, Frankencoin does not rely on a single issuer holding bank reserves. Instead, it uses an over-collateralized system where crypto assets are deposited on-chain to back every ZCHF in circulation. The protocol is fully transparent — all collateral, positions, and system parameters are publicly verifiable on the blockchain.

Why the Swiss Franc?

The Swiss franc is one of the world's most stable and trusted currencies. Over the past 50 years, it has appreciated more than 240% against the US dollar. By bringing the Swiss franc on-chain, Frankencoin provides a stable store of value for DeFi participants who want exposure to CHF rather than USD. This is particularly relevant for European users, Swiss businesses, and anyone seeking a stable non-USD alternative in decentralized finance.

Oracle-Free Design

Most stablecoins and lending protocols depend on external price oracles — third-party services that feed market prices to smart contracts. These oracles introduce a point of failure: if manipulated, they can trigger cascading liquidations or enable exploits. Frankencoin eliminates this risk entirely. Instead of relying on oracles, the protocol uses an auction-based mechanism where market participants themselves determine collateral valuations. This design, described in detail in the founding PhD thesis at the University of Zurich, makes Frankencoin uniquely resilient to oracle manipulation attacks.

How It Works

Anyone can mint ZCHF by depositing approved collateral (such as ETH, WBTC, or other ERC-20 tokens) into a position. The collateral must exceed the value of the minted ZCHF, creating an over-collateralization buffer. If collateral values drop below safe levels, the system's automated liquidation mechanism activates. A separate reserve pool, funded by Frankencoin Pool Share (FPS) holders, provides an additional safety layer. The entire system operates without intermediaries, central operators, or trusted third parties.