Zircuit, a zero-knowledge blockchain backed by YZiLabs, Dragonfly, and Pantera, has announced the launch of Zircuit Finance. This new platform aims to address the credit and security risks prevalent in the Decentralized Finance (DeFi) space. With $3 billion in assets secured to date, Zircuit Finance is positioned as a secure platform for institutional-grade strategies, beginning with a stablecoin vault that offers up to 11% APY on USDC and USDT, with plans to expand to other assets such as BTC and ETH.
Addressing Industry Setbacks in DeFi
The introduction of Zircuit Finance follows a series of significant setbacks within the DeFi industry that have diminished user confidence. These issues stem from persistent gaps in transparency, risk management, and overall security. Credit events have resulted in aggregate losses exceeding $90 million, highlighting the risks associated with lending to unvetted counterparties. Furthermore, security incidents in November 2025 demonstrated that even established protocols can be vulnerable to hacks, leading to losses of over $100 million, despite adherence to industry best practices. These events underscore the critical need for enhanced safeguards and more dependable infrastructure, which Zircuit Finance aims to provide as a secure haven for onchain finance.
Strategic Approach to Risk Mitigation
“The future of DeFi isn’t about chasing the highest yields, it's about building the most secure foundation for capital to grow,” stated Dr. Martin Derka, Co-Founder of Zircuit. “Zircuit Finance is part of a broader shift to create a more stable, transparent, and trusted onchain economy where users and institutional allocators can deploy large sums of capital efficiently and safely.”
To effectively mitigate credit risk, Zircuit Finance engages exclusively with tier-one asset managers that possess multi-year track records and robust balance sheets. Each counterparty operates under a legal framework that enforces creditor rights, mandates collateralization standards, and includes default covenants. Zircuit requires frequent exposure reporting, ensuring real-time visibility into capital allocation and management.
Diversified Capital Allocation and Strategic Partnerships
Within its established framework, Zircuit vaults allocate capital across both regulated and decentralized venues. A portion of the assets will be managed by Monarq Asset Management, a regulated fund specializing in arbitrage and delta-neutral strategies with a proven history of disciplined risk management. Additional integrations with platforms like Aave and Morpho are in place to diversify exposure across venues and facilitate efficient withdrawals.
Zircuit is also collaborating with Forteus, the FCA-regulated asset management arm of Numeus Group. This partnership is focused on developing alpha-centric investment strategies designed to generate risk-adjusted returns in Ethereum and Bitcoin. These strategies are intended to complement Zircuit’s delta-neutral yield foundation, which operates under institutional-grade oversight.
On the infrastructure front, Zircuit is integrating with FalconX, which will serve as its prime broker and execution partner. FalconX’s global platform offers institutional-grade custody, trade execution, and risk management capabilities, supporting efficient capital deployment and compliance-aligned operations across various venues.
"As liquidity flows into DeFi at scale, the platforms that will lead are those delivering both performance and safety while bringing institutional-grade strategies accessible onchain. Our collaboration with Zircuit Finance reflects Monarq’s commitment to powering that next phase of growth, anchored in deep liquidity, disciplined risk, and operational transparency," said Shiliang Tang, Managing Partner of Monarq Asset Management.
Robust Security Architecture
Zircuit Finance’s security architecture forms the bedrock for all its institutional partnerships and yield strategies. At the smart contract layer, funds cannot be withdrawn from the Zircuit Finance vault ecosystem without a depositor’s explicit signature. The vault infrastructure has undergone audits by Quantstamp and Zenith. Furthermore, it is partially insured against smart contract vulnerabilities through Chainproof and incorporates LayerZero’s secure messaging system to enable authenticated cross-chain communication.
Complementing these security measures, Zircuit integrates its proprietary AI-powered Sequencer Level Security for vaults deployed on the Zircuit network. This advanced security feature proactively detects and quarantines malicious transactions before they are included in a block, extending protection beyond the smart contract layer to provide institutional-grade defense at the blockchain level.
Early Access and About Zircuit
Zircuit Finance is currently in early access. Interested parties can join the Zircuit Finance waitlist and find more information by visiting zircuit.com/waitlist.
ABOUT ZIRCUIT
Zircuit is recognized as the first zero-knowledge blockchain featuring integrated Sequencer Level Security. Founded in 2022 by security experts formerly from Quantstamp, Zircuit provides the Layer-2 infrastructure for Zircuit Finance. In addition to powering Zircuit Finance, Zircuit operates independently as a general-purpose rollup, prioritizing high performance with unparalleled security, and has secured up to $3 billion in Total Value Locked.