ZkSync (ZK), a token of Ethereum’s Layer 2 (L2) network, has been showing strength in the reddish market, with its price rising 115% in the past seven days.
At the time of writing this memo, ZK estimated at $0.068as seen in the following graph.
ZK’s strong performance is explained by new developments in its ecosystem and renewed interest among investors. These advances received accolades such as: Vitalik Buterin raised awareness of the protocol.
“ZKsync has been doing valuable but under-recognized work in the Ethereum ecosystem, and we are thrilled that ZKsync can make this happen,” the Ethereum co-founder said via his X account after the Atlas presentation.
As reported by CriptoNoticias, this is an update to the ZK stack and marks a significant step towards the company’s vision of building a network of cryptographically secured and global economy-oriented sovereign chains.
The latest development in this ecosystem is a proposal that seeks to give ZK real economic utility beyond its limited role in governance functions. The initiative was introduced by Alex Gluchowski, founder of zkSync.
The title of this document is “ZK Token Proposal Part I”. It proposes to implement a mechanism where all income generated by the protocol is used to buy back and burn ZK tokens.
“The objective is to align use and value, to make decentralization economically sustainable, and to ensure that the network captures a significant portion of the economic benefits it generates,” the proposal emphasizes.
Three principles of proposal
This proposal is based on three main principles. The first is the economic sustainability of decentralization. This allows the network to be independent and resistant to capture by centralized actors.
The second principle is value capture. This is to ensure that the majority of the value created by the network is leveraged. Return to the ecosystem for improvement and safety.
Finally, by aligning incentives, we aim to make the token a unified economic reference point that benefits all participants (builders, users, and institutions) in a transparent manner.
“ZKsync is one of the leaders in building an incorruptible financial infrastructure for the world. Such an infrastructure cannot depend on a single actor or a small group of institutions. True and trusted neutrality (a fundamental principle shared with Ethereum) requires that the system remain independent and not be permissioned or manipulated for long periods of time,” the proposal explains.
It further clarifies that “for decentralization to last, it must be economically sustainable. Networks need a robust economic model that supports continued development, security, and operation by a large number of independent participants, rather than a central sponsor.”
The proposal proposes to channel all the value generated Towards an economic system managed by protocol governance.
Proceeds will go towards buying back and burning ZK tokens, staking rewards to decentralized operators, and funding the Treasury to drive ecosystem development.
The governance layer, on the other hand, defines the distribution parameters and adapts them over time as the project grows and needs.
Proposals must be discussed and approved by the community of this ecosystem before being implemented.
(Tag translation) Altcoin
