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What is COLD Banking Lounge?

The XFG COLD (Certificates of Ledger Deposit) Banking Lounge is a decentralized finance protocol built on the Fuego blockchain that allows users to lock XFG for fixed periods (3 or 12 months) to earn interest in the form of COLDAO (CD) tokens. Unlike the Ξmbers (HEAT) token mint system where XFG tokens are permanently burned to receive gas tokens for Fuego's zkC0DL3 rollup, the COLD protocol locks XFG that can be unlocked after the deposit term expires. The system offers 8 standardized tiers based on deposit amounts (0.8, 8, 80, or 800 XFG) with varying APY rates from 8% to 69%, plus special 80% APY bonus for 800 XFG deposits made before January 8, 2026.

COLD protocol operates across three layers of architecture: deposits are made on the Fuego blockchain, STARK proofs are verified on L2 (Arbitrum or zkEra -later zkC0DL3), and COLDAO (CD) interest tokens are minted on Ethereum as ERC-1155 tokens. The system leverages advanced cryptography including zkSTARK proofs for privacy, nullifiers to prevent double-spending, and cross-chain messaging via Arbitrum's L2→L1 bridge. COLDAO (CD) tokens serve dual purposes as interest-bearing assets and governance tokens for the COLDAO, providing users with both yield and voting power while reducing the circulating supply of XFG tokens through temporary locking along with the permanent burning of the Ξmbers (HEAT) system.

• How to redeem $COLD as interest (alpha)