Zeta Markets' native token to bring incentive wars to Solana
The governance token Z will have a vote escrow model that might attract protocols looking to give additional incentives, Zeta Markets confirmed.
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Derivatives decentralized exchange (DEX) Zeta Markets revealed the whitepaper for their governance token Z on April 18, which will have a vote escrow (ve) model and 30% of its total supply earmarked for liquidity providers incentives. This could potentially start a ‘Ve Wars’ landscape on Solana, which is something Zeta Markets is looking out for, as confirmed by the protocol to Crypto Briefing.
The idea is to incentivize protocols to acquire Z tokens and lock them for additional platform incentives. By acquiring Z tokens, protocols could use their voting power to create additional incentives for users through boosted rewards on Zeta Markets.
The vote escrow model consists of granting voting power to token stakers based on the period of the token lock, and this voting power can be used to boost rewards in pools within the platform. The more time the user stakes his funds, the more voting power it has.
Therefore, it is usual for a ve landscape to see more projects built around a token with this governance model. Curve Finance and its CRV token are a notorious example, with different applications disputing the accumulation of the asset and aiming to boost rewards on Curve pools with their native crypto.
This ‘Ve Wars’ scenario is commonly beneficial for users since they receive multiple incentives to lend their voting power to different platforms. Since Zeta Markets is pioneering the ve model in Solana’s ecosystem, this could boost not only the value of the Z token but also the protocol’s total value locked.
“The launch of the $Z token whitepaper is a significant step towards realizing our vision of making decentralized finance a viable alternative to centralized systems,” said Tristan Frizza, Founder of Zeta Markets. “We aim to offer traders the ultimate perps exchange for speed, experience and security, that feels like a CEX but is secured by blockchain. The distribution and utility of $Z has been designed with this goal in mind, rewarding those who directly enhance the protocol’s liquidity and activity in the long term, and ultimately ensuring optimal exchange conditions for all.”
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