Tokenomics
Version 0.1.1

Zenlink Overview

Zenlink is an underlying cross-chain DEX protocol based on Polkadot and is committed to becoming the DEX composable hub of Polkadot. By accessing the ultimate, open, and universal cross-chain DEX protocol based on Substrate, Zenlink DEX Protocol enables all parachains to build DEX and achieve liquidity sharing in one click. Zenlink DEX Protocol includes Module, WASM, and EVM implementations, which are flexible and adaptable, allowing for customizable compositions and interoperability with different DeFi modules.
In addition, the Zenlink DEX Aggregator connects all DEX DApps on Polkadot and aggregates liquidity, providing a low slippage trading experience for users. Zenlink DEX Composable Hub enables developers to access the Zenlink DEX Module to build their own unique DEXs, forming a DEX composable hub for the Polkadot ecosystem.
Zenlink DEX Network architecture can be described as follows.
Zenlink DEX Protocol is an underlying cross-chain DEX protocol based on Substrate, which includes Module, WASM, and EVM implementations.
Zenlink DEX Module is a module that can be inserted into parachain code through Pallet. The module will be integrated into parachains, so that they can directly have the basic functions of DEX without repeated development, such as Swap, creating transaction pairs, adding/removing liquidity, etc.; at the same time, it can also share liquidity with all parachains integrated with Zenlink DEX Module.
Zenlink DEX WASM refers to the version of the WASM contract written with ink! Pallet. The advantage of this implementation is that the smart contract can be compiled and deployed to the parachain ink! module, instead of modifying the source code of the parachain. WASM is the native contract implementation in the Polkadot network and is the primary contract deployment method of the future, and the Zenlink DEX WASM version has the ability to be deployed to the WASM contract parachain for the first time.
Zenlink DEX EVM is a contractual deployment mode to achieve compatibility with the Ethereum virtual machine (EVM), and it is also a transition scheme adopted by the Polkadot network in the initial stage. The Zenlink DEX EVM version implements all the functions of the protocol layer, complements the perfect testing process, and can be deployed to the EVM contract parachain for the first time, which greatly expands the applicability of the platform.
Zenlink DApp is a front-end interactive product based on Zenlink DEX Protocol to facilitate users to use cross-chain DEX without awareness.
Zenlink Network Token (ZLK) is the native token of the Zenlink network, serving the participants of the entire Zenlink DEX network. It provides a fair and transparent governance mechanism and a reasonable means of value capture and is used to motivate eco-users to participate in the network development in the long term.

Zenlink Network Ecological

Zenlink network ecological participants consist of the following categories.
    Liquidity providers: provides liquidity for trading pairs on the Zenlink DEX network.
    Traders: users who make trades on Zenlink DEX.
    Governance users: users who obtain ZLK and participate in network governance in a variety of ways.
    Developers: developers involved in the Zenlink network.
    Parachains: parachains integrating Zenlink DEX Module
Zenlink is committed to providing valuable protocols, products, and services, and the development of its ecology depends on the joint efforts of the above participants. At the same time, Zenlink will continue to invest the value created by the network into ecological construction, encourage more contributors to participate in network construction, promote optimization and upgrading at all levels of the network, and then create greater value, making the whole network enter the development track of positive feedback. And ZLK is the most important medium to promote the whole eco-economic cycle.

Token Utility

ZLK is a utility token issued by Zenlink, which has multiple practical values, including:
1. Transaction fee discount: the basic transaction fee rate of Zenlink DEX is 0.3%. By holding a certain amount of ZLK token, users will receive a corresponding fee discount, as shown below:
2. Staking interest: users can get the corresponding interest by staking ZLK to the Staking Pool (the initial distribution of ZLK). Staking interest is issued according to the proportion of staking interests in a certain period. The calculation formula is:
Staking interests = staking quantity *staking time
The specific calculation method is as follows:
Ii,j=Interest%=i=0i=n±Qi,j(HnHi)i=0i=nMi I_{i,j} = Interest \% = \frac{ \sum\limits_{i=0}^{i=n} \pm Q_{i,j} ( H_{n} - H_{i} ) }{ \sum\limits_{i=0}^{i=n} M_{i} }
I_i,j: Represents the proportion of the staking value of the j address on the i block. M_i: Represents the value of Total Supply of the staking contract address on the i block. Q_i,j: Represents the number of Stake/Redeem tokens of the j address on the i block. H_i: Represents the block height i of the j address for Stake/Redeem operation. H_n: Block height n indicates the end of the staking period. ±: Value rules: take "+" for Stake operation and "-" for Redeem operation.
3. Governance: ZLK will give the community the right to participate in Zenlink governance, and ZLK holders can participate in Zenlink governance by initiating ZIP (Zenlink Improve Proposal), including, but not limited to, suggestions for the improvement of Zenlink products, the use of treasury funds, community building, etc.

Economic Mechanism

In order to promote network growth and ensure a healthy cycle of the entire ecosystem, Zenlink designed the following economic mechanisms for ZLK:

Liquidity Mining

Zenlink is currently a DEX based on AMM (automatic market maker) model. In order to establish a liquidity pool so that users can get a better trading experience, a corresponding liquidity incentive program will be provided. Token holders can obtain the LP Token of the corresponding trading pair by providing liquidity to the Zenlink DEX network. The LP Token represents the voucher to add and remove liquidity, and liquidity incentives can be obtained by staking LP Token. The reward shall be distributed periodically, as detailed in the announcement or program of liquidity mining launched in the future.

Transaction Mining

Users who trade with DEX can also get ZLK tokens. Considering the fairness of participating users, there will be a balance between users with different transaction volumes in the design of the mechanism. The incentive for transaction mining comes from two parts: 10% of the transaction fee income and 15% of the initial ZLK allocation. The reward is distributed according to the proportion of the contribution value of the transaction volume in a certain period, which is calculated as follows:
Transaction contribution value = transaction volume ^ 0.5

Transaction Fee Fund Pool

The transaction fee will be managed in a dedicated fund pool. At present, the maximum transaction fee is 0.3% of the amount of each transaction, and depending on the actual situation, the transaction fee charged on different parachains may be in different tokens, so there are theoretically multiple tokens in the transaction fee fund pool. The main uses of transaction fees include:
    ZLK liquidity provider share: 50%
    Buyback and destruction of ZLK share: 30%
    Traders share: 10%
    Reservation share: 10%

Staking Pool

This part of the token is reserved for 5% of the total supply and is used to reward ZLK staking users and parachain projects with integrated Zenlink DEX Module.

DAO Treasury

This part of the token is reserved for 5% of the total supply and is jointly managed by DAO members to support the development of the Zenlink network. Its expenditure purposes include, but are not limited to:
    Zenlink marketing or community-building activities.
    Rewards to DAO members based on the proof of workload.
    Developer Grant.
*We will publish a separate document on the model design of Zenlink NFT

ZLK Distribution

Zenlink will issue the same set of ZLK Token in Kusama Network and Polkadot Network with a maximum supply of 100 million. Due to the buyback mechanism, there will be a certain degree of deflation, and the actual maximum circulation will be less than 100 million. The token distribution ratio of the two networks is tentatively 40% of Kusama issuance and 60% of Polkadot issuance, following the same distribution rules (i.e. 40,000,000 ZLK issued on the Kusama network and 60,000,000 ZLK issued on the Polkadot network, which will follow a non-discriminatory release rule). The specific distribution is as follows:
Community: 50%, of which:
    Transaction mining: 15%, non-linear unlocked
    Liquidity mining: 25%, non-linear unlocked
    DAO Treasury: 5%, used on demand for network construction expenses and is jointly controlled by the community and Zenlink team.
    Staking Pool: 5%, which is used to reward ZLK staking users and parachains that integrate Zenlink DEX Module.
Early investors: 26%, of which:
    Seed round: 7%, linearly unlocked every 3 months, 1/8 unlocked each time
    Angel round: 11%, linearly unlocked every 2 months, 1/8 unlocked each time
    Series A Round: 8%, linearly unlocked every month, 1/8 unlocked each time
Team: 20%, linearly unlocked every 3 months and released in 24 months (No unlocking for the first 2 months after launch).
Zenlink Foundation: 4%, reserved and there is no plan to unlock for now.

Risk Statement

Investment risk: ZLK is a native utility token for Zenlink DEX network, not an investment product. Before making any purchase related to ZLK, the purchaser should carefully consider whether it is in line with its financial condition, risk tolerance, and other risks that may be involved in the purchase of ZLK.
Security risk: security is always the highest priority of the Zenlink DEX protocol, and the core development team and external security audit parties will invest a lot of resources to ensure the security and reliability of the protocol as much as possible. After the launch of the product, the core code will be gradually open source, and the bug reward program will also be launched to enhance the reliability of the code, but there is no guarantee of 100% security. Please be aware of this risk before making any purchases of ZLK.

Annexes

Zenlink_Tokenomics_Page.pdf
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English Version
Zenlink_Tokenomics_Page_CN.pdf
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中文版
Last modified 8d ago