🏦ZKX Tokenomics and Governance

Introducing $ZKX Token

The support of our community has remarkably defined our journey in shaping ZKX. From early adopters to contributors who played a pivotal role in shaping the community, their unwavering contribution has positioned us as one of the biggest communities on Starknet and within the world of L2s.

Guided by a shared vision, the ZKX team is dedicated to creating a fair ownership mechanism for the future ZKX token, benefiting token stakers and traders. This strategic approach is a conscious step towards avoiding the pitfalls of over-tokenization while prioritizing a sustainable token model.

ZKX Token: Your Key to Governance and Rewards

In designing the tokenomics, our core aim was to foster reciprocity for the value created by the users and institutions contributing to the exchange. As a result, the $ZKX token is the platform’s governance token, and staking the token unlocks governance power, protocol’s revenue in USDC, and long-term benefits for the community.

You can earn and utilize the $ZKX token within the exchange in the following ways:

1. Trading

Trading is incentivized with $ZKX token via a gamified rewards distribution algorithm called High Tide. The High Tide algorithm analyzes the behavior of traders according to the following parameters:

Consistency PnL Volume Past Season Participation

At the end of each trading season, token rewards are distributed via the High Tide algorithm, generating a distinct score on the ZKX leaderboard. Digital Shares of ZKX are then assigned according to one's position on the leaderboard. This strategic allocation of ZKX tokens as rewards aims to bolster liquidity right from the exchange's inception. In the future, the community and anyone who wants to list a market on ZKX will be able to offer any ERC-20 as liquidity incentives through High Tide.

Our goal is to reward traders for their activity on the exchange while ensuring they have a compelling reason to stay for a sticky trading experience with equitable rewards. This choice is based on user research and insights from focus groups, ultimately leading us to the High Tide algorithm.

2. Staking

By staking ZKX tokens in a time-locked pool, you gain access to the protocol's revenue share in USDC. Your share of the revenue depends on the duration, quantity of tokens locked, and the percentage of the protocol's revenue distributed to the staking pool, which the community will decide. This token lock-up incentivizes ZKX's growth and enhances its value accrual mechanism.

3. Voting

Staking $ZKX grants access to Digital Shares of ZKX (Soulbound). The duration and quantity of tokens staked directly influence your governance power within the ZKX DAO. The governance power enables you to shape the direction of the DAO and delegate any parameter or function within the protocol to any qualified team that wants to become a sub-DAO of ZKX. Stakeholders of the protocol, from traders to stakers, are represented in what we call Liquid Governance, a concept that will be revealed in 2024. The DAO governance will seamlessly integrate into the main platform UI to simplify participation.

The ZKX Token Economy Flywheel: Balance of Ownership & Power between the Stakeholders

Our High Tide algorithm and Liquid Governance have been designed to establish a power balance between stakeholders, all while incentivizing them based on their activity. This ensures a balance between ownership and control and sets the stage for the ZKX DAO. Once the DAO is established, it will prioritize the community's well-being through democratic decision-making, preventing unilateral protocol decisions and keeping the power in the hands of our active users.