Not-for-profit organization dedicated to advancing the interoperability protocol LayerZero, LayerZero Foundation announced plans to conduct a fee switch referendum. This on-chain vote will take place among ZRO token holders, starting at 00:00 UTC on December 20th and concluding at 00:00 UTC on December 27th.
The fee switch referendum is a biannual voting mechanism where ZRO holders determine whether to activate the LayerZero protocol fee. This fee corresponds to the combined DVN and Executor fees incurred during the verification and execution of each LayerZero message. If activated, the protocol fees will be utilized to buy back and burn ZRO tokens, effectively reducing their circulating supply.
According to the voting procedure, a snapshot of ZRO balances will be taken 20 minutes before the referendum starts and at the beginning of the voting period. The lower of these two balances will determine a holder’s voting power, ensuring that ZRO transfers occurring during the voting window are not double-counted. ZRO is available on several blockchains, including Ethereum, Optimism, Base, Polygon, Avalanche, BNB Chain, and Arbitrum. When a vote is cast, lzRead will aggregate the holder’s total ZRO balance across all supported networks, and voting power will be calculated based on this combined total. Votes are then sent to Arbitrum via LayerZero and recorded on the hub chain, which in this case is Arbitrum.
Fee Switch Referendum
On Dec 20, 2024, 00:00 UTC, ZRO holders will vote:
• “Yes” to activate the LayerZero protocol fee
• “No” to keep the protocol fee inactive
Voting ends Dec 27, 2024, 00:00 UTC.
TL;DR
– Only circulating ZRO is eligible to vote.
– Quorum is 60%. From… pic.twitter.com/vt3x0RJ6Gk
— LayerZero Foundation (@LayerZero_Fndn) December 13, 2024
Fee Switch Referendum: Key Voting Parameters
The referendum will be decided by the holders of the circulating ZRO supply. The voting pool includes tokens distributed through the Community Allocation for “Retroactive Initiatives,” equivalent to 83,283,110 ZRO, and “Ecosystem and Growth,” equivalent to 26,664,139 ZRO. The total voting power is based on the circulating supply of 109,947,249 ZRO.
A quorum of at least 60% of the circulating supply must participate for the referendum to be valid. If the quorum is not met, the fee switch will default to “No.” If the quorum is met, a simple majority exceeding 50% of the votes cast for either “Yes” or “No” will determine the outcome of the referendum.
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