In this article, we will introduce the zkLink protocol's native token, ZKL.
What is zkLink?
zkLink is a Layer 3 multi-chain convergence infrastructure based on zero-knowledge technology, secured by zk-SNARKs, that powers the next generation of decentralized trading products such as DEXs, AMMs, NFT marketplaces and others.
zkLink has created the ZK-Rollup middleware, which connects natively to various Layers 1 and 2, with a wide range of high-level APIs, SDKs and trade-specific zkVMs. With zkLink, developers can easily deploy trading dApps with high customization and access to aggregated liquidity, allowing end users to benefit from a seamless experience across multiple networks.
In addition, zkLink develops zero-knowledge blockchain solutions for high-performance ZK applications. zkLink's core value proposition and product platforms, zkLink Origin and zkLink Nexus, are designed to provide solutions related to the blockchain execution layer and settlement layer.
Classic ZK storage systems typically choose a single chain as the settlement layer to maintain maximum security and integrity of off-chain transactions. Currently, most layer 2 solutions use Ethereum as the settlement layer. However, zkLink is introducing a new paradigm for ZK storage, known as multi-chain storage, through two product solutions, zkLink Origin and zkLink Nexus.
zkLink Nexus is designed to bridge the gap between different ZK-Rollup Layer 2 ecosystems to reduce liquidity fragmentation while providing security and scalability through zero-knowledge proofs. zkLink improves blockchain performance and reduces the cost of trading dApps. zkLink does not compromise on security as it inherits the security characteristics of Ethereum.
What is the zkLink token?
ZKL is the native utility and governance token for the zkLink protocol. ZKL helps developers unlock access to the zkLink rollup infrastructure service, including ZK-protected markets. It is also the zkLink DAO governance token that governs the development of the protocol. ZKL will be a standard ERC20 token issued on the Ethereum mainnet. The total supply of ZKL is limited to 1 billion and is not inflationary. ZKL will also be available on chains connected to it. So ZKL will be used for:
Unlock zkLink consolidated infrastructure services
Pay for computing resources with zero knowledge
Manage zkLink development with zkLink DAO
For more information about the zkLink protocol, check out our recently updated whitepaper blog article.
Introducing ZKL
The ZKL token is primarily used inside app rollups built on top of zkLink to pay fees associated with a specific app feature such as a CLOB, NFT app, or GameFi DApp, as well as to pay for zero-knowledge proof generation services that run on the server side of the cumulative application package - which are executed and provided by âreviewersâ. Additionally, ZKL is used for governance purposes of the zkLink protocol, where ZKL holders participate in the development of the protocol by initiating proposals and/or voting on them. Finally, ZKL has additional benefits such as providing discounts on trading commissions or fees for using the zkLink ecosystem dApps and other exclusive opportunities that may be linked to NFT mints or other platform incentives. These benefits are initiated and determined by the zkLink DAO.
Utility for ZKL token: features
Verification Fee: ZKL serves as the primary payment token for the zero-knowledge proof generation service offered by provers. To use the zkLink infrastructure solution for app accumulation, dApps must pay prover fees using ZKL. This fee is for verifiers to perform the computational work of generating ZKPS for off-chain transactions. In addition, verifiers need to stake ZKL to gain access to the Proof auction market, where they receive ZKL rewards for successfully completing a verification task. The Proof Auction Market is a smart contract that coordinates the zero-knowledge verification task, the price bidding process, manages verifier access, distributes verification fees, and more. Thus, verifiers play an important role in the protocol by providing the computing resources needed to compute and generate zero-knowledge proofs for off-chain transactions. Therefore, âverification feeâ is the first utility of ZKL.
Rollup Infrastructure License Fee: dApps using zkLink's rollups solution (App Rollups) pay an infrastructure license fee in ZKL to the zkLink DAO Vault, which is used to determine the fee structure for different types of dApps built on App Rollups . However, the alternative payment option includes future earnings sharing. zkLink DAO remains flexible when pricing structures change. Moreover, during this process, app savings packages charge transaction fees or other fees (in ZKL) to users to maintain their ongoing business operations.
Governance: ZKL is the governance token of the zkLink protocol. ZKL holders have the right to participate in the governance and development of the protocol by initiating and voting on proposals.
More information about the zkLink protocol, our token model and utility can be found in our whitepaper.
What are the benefits and use cases of ZKL?
ZKL has a variety of application use cases and application rollups built on the zkLink infrastructure. Specifically, just like any token operates at Layer 2 or within a specific DApp, ZKL is used to pay commissions to blockchain operators (speaking by analogy), as well as royalties to a specific DApp or app rollup. It can also be hosted and used for management purposes by those interested in forming or participating in the future of ZK-based applications and Layer 3 scaling solutions. Moreover, one of the key benefits and market dynamics that can support ZKL is zkLink applications with low transaction fees, especially in zkLink accumulative applications, as well as its low-cost cross-chain bridging functionality and interoperability with layer 2 connected devices. As more developments and applications are built on top of the zkLink infrastructure through application accumulative packages, demand and usage ZKL will only continue to grow. The industry is gravitating toward lower-cost, application-specific, and customizable ZK scaling solutions and blockchainsâhence, ZKL is highly likely to witness increased usage and demand in the coming years.
Tokenomics
ZKL token distribution
zkLink has a balanced distribution that includes multiple stakeholders such as team, community, ecosystem, backers, private investors, treasury and liquidity. The specific ZKL distribution percentages are shown in the chart below.
ZKL token release schedule
ZKL is currently scheduled for a Token Generation Event (TGE) in Q1 2024, during which ZKL will be released to the public and launched into the market. However, regarding the ZKL unlocking schedule, zkLink has developed a stable time frame for when and how many ZKL tokens will go on sale.
ZKL tokens are locked in a smart contract and will be released according to a predetermined schedule, whereby a certain number of tokens will be unlocked on TGE and the rest will be subject to varying monthly linear transfer deadlines.
Devolution is generally seen as a more strategic and flexible approach that benefits the project by aligning stakeholder interests, reducing risk, and building community trust. Additionally, this strategy helps align stakeholder interests with the long-term goals of the project and discourages profit-seeking in the short term.
Conclusion
The ZKL token will serve as a key element of the zkLink ecosystem. As a utility and governance token, it plays a multifaceted role in facilitating access to zkLink storage infrastructure services and ZK-protected markets. However, the importance of ZKL goes beyond just being a transactional and fee-based utility; it provides developers with the tools needed to leverage the protocol's capabilities to develop superior ZK-based application rollups. Additionally, ZKL's role as the zkLink DAO's governance token highlights its importance in shaping the protocol's future development. With a limited supply of 1 billion and status as a standard ERC20 token on the Ethereum mainnet, ZKL will become a non-inflationary asset that will also be available on connected chains. At its core, ZKL is more than just a tokenâit is the key to unlocking the full potential of zkLink, paying for core computing resources, and actively participating in the governance and evolution of the protocol.