# Swivel Finance

By [minakov](https://paragraph.com/@minakov) · 2023-02-20

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[Swivel Finance](https://swivel.finance/) is a decentralized financial protocol built on the Ethereum blockchain that provides tools for creating and managing smart contracts for lending. Users can create and trade credit positions and earn returns on their investments in loans.

Swivel Finance also provides a set of risk assessment and portfolio management tools. For example, users can use risk modeling tools to assess potential losses or returns from credit positions.

The main advantage of Swivel Finance is its decentralization, which means that credit position management is done without intermediaries or centralized parties. This provides a more transparent, secure, and reliable lending process.

Swivel Finance employs the concept of tokenizing cash flows, which allows for the separation of a single income-generating token into two distinct tokens until a specified future date. The first token represents the income, while the second token represents the right to exchange it for the underlying token in the future. They are called nTokens and zcTokens, respectively. This provides users with more flexibility in managing their investments and enables them to earn returns from lending on Swivel Finance.

zcTokens in Swivel Finance are ERC-20 standard tokens that provide the right to exchange for the underlying asset at a 1:1 ratio upon maturity. This means that zcToken holders can exchange them for the corresponding underlying asset when it becomes available in the future.

Overall, Swivel Finance is an interesting DeFi project that provides new opportunities for investors and entrepreneurs. However, it is recommended to carefully study the features and risks of the protocol before using it to minimize potential losses.

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*Originally published on [minakov](https://paragraph.com/@minakov/swivel-finance)*