As the “CEO” of ZKFair, the key objectives would be growth and retention. The ambitious goal of >$10bn requires a strategy that addresses the challenges of a 100% community-owned project without a traditional treasury for funding initiatives. Here is a my detailed plan and how I would address existing challenges:
1. Revenue Without a Traditional Treasury
- The treasury can continue to grow through the retention of transaction fees: Ensure that this fee remains competitive with other existing L2s.
- In addition to this, strategic partnerships could also create mutual benefit, potentially sharing revenue and other resources.
- ZKFair could also charge fees to businesses or developers who plan to deploy a contract or require tailor-made solutions with technical support.
2. Product Focus
Short term: Territory
Perpetual exchanges can be analogous to expanding the surface area of ZKFair, by broadening the platform’s reach and appeal to a diverse set of users (traders and investors). These platforms attract a different demographic, looking to find short-term gains and high-leverage trading. Perpetual exchanges would increase the range of activities and opportunities available on the platform, thereby expanding its reach and “territory”.
Mid/Long term: Depth
On the other hand – yield generating products increase ZKFair’s stability and liquidity by adding volume/depth over time. These products deepen ZKFair’s value by providing more substantial/long-term engagement opportunities. Lending and borrowing for yield encourages deposits and time-locked assets which leads to increased TVL within the ecosystem. This appeals to users seeking passive income through interest earning to borrowers looking for liquidity without selling their assets.
3. Incentivising Token Retention
- Staking rewards where users lock their tokens to earn rewards either ($ZKF or $USDC) can be generated through network transaction fees.
- ZKFair should also implement governance participation incentives by offering rewards for participation in key decisions. The goal here is to encourage users to hold onto their tokens.
- By introducing a loyalty program, rewards can be distributed for long-term holders, such as increased staking yields or exclusive access to new features. An algorithm can be used to determine a score through time and volume weighted loyalty. See attempted concept here:
Algorithm: Loyalty reward system for ZKF holders
Defining parameters
- Time held (T): The duration for which a user has held ZKF tokens.
- Volume-Weighted Holding (V): The average amount of ZKF tokens held over time, giving more weight to larger holdings.
Calculating the Fair Score
- Time Score (TS): A score based on the time held.
- Volume Score (VS): A score based on the average volume of tokens held. Calculated using a formula that weights the amount of tokens held over time.
- Fair Score (FS): This score is a weighted sum of TS and VS. The weights can be adjusted based on what the platform wants to incentivize more (time held vs volume held).
Formula 1:
Fair Score = w1 * TS + w2 * VS
Where w1 and w2 are weights assigned to the Time Score and Volume Score, respectively.
Once there is a scoring system in place then it is only a matter of defining a reward pool
and distribution process in a given period (eg. monthly).
Formula 2:
User Reward = (User’s Fair Score / Total Fair Score of all users) * Total Reward Pool
It’s important to implement robust systems to accurately track holding durations and volumes. This should be transparent and resistant to gaming/farming or manipulation.
4. Enhancing $ZKF Utility
- In addition to the governance utility attached to ZKF, the community can also choose to implement access to exclusive features, using the token as a gateway for advanced features on the network.
- Implement a passive token burning mechanism to reduce the $10bn supply over time, potentially increasing the token’s value.
5. Community Engagement, Growth & Comms
- Leverage the community for organic grassroots marketing through social media.
- Create an ambassador program to incentivize community members to promote ZKFair.
- Create educational content to attract new users and developers.
- In addition to the aforementioned it is important to create regular community updates with regard to dev progress, financials and governance, maintaining transparency.
- Regularly conduct comprehensive security audits.
