ZKsync, an Ethereum Layer 2 leveraging zero-knowledge proofs, will unveil its latest tokenomics proposal for its native token ZK, moving it from a pure governance token to a utility token.
According to a press release shared with The Defiant, the proposal would create value for ZK tokens through on-chain interoperability fees and off-chain enterprise license revenue. These revenue streams fund staking rewards, ecosystem funding, and buyback and burn mechanisms.
The move addresses the lack of tangible value in governance tokens and is an extension of the ZKnomics roadmap, which was first published in June. This original brief emphasized the need for usage-based revenue, programmatic delivery, and gradual implementation of the ZKnomics shift.
Today’s proposal is “Part 1” of the new Tokenomics design, which primarily focuses on the ZK token value flywheel.
ZK's flywheel proposal. Source: ZKsync
The market reacted strongly to this announcement, and ZK soared more than 14% on the day. ZK is currently up 62% for the week, indicating that there may have been advance information on this proposal given the unusually weak overall altcoin market of late.
ZK 1 month price chart. Source: CoinGecko
This move could bring a much-needed comeback to the ZK token, which has fallen 83% from its all-time high in June 2024. ZK currently trades at around 5 cents per token, or a market cap of $380 million.
Commenting on the proposal, Alex Gluchowski of Matter Labs, who developed the protocol, said, “ZKsync has been building the rails for Incorruptible Finance for years. Now we are moving to the next stage of building a real economy around it. This is the moment when the $ZK token grows from governance to real utility. As the network scales in production, the value flowing through ZKsync should flow back into the ecosystem.”
