The Token Generation event for a project is often considered the end of the protocol’s growth. Users who are farming incentives remove liquidity and exit the protocol. At ZeroLend, we believe that the launch of our token and the eventual decentralization of the protocol will catalyze tomorrow’s growth.

ZeroLend is one of the largest lending markets in DeFi. Currently, the dominant lending protocol on Linea, zkSync, Manta, and X Layer with growing potential on Blast.

ZeroLend’s goal is to create a self-sustaining, highly capital-efficient, risk-free lending market.

This article highlights the tokenomics of ZeroLend’s governance token - ZERO.

$ZERO Overview

$ZERO is a Linea ERC-20 token. It serves as a utility and governance token within the ZeroLend ecosystem and is bridgable to all chains using LayerZero.

Ticker: $ZERO Maximum Supply: 100,000,000,000 (100 billion) Initial circulating supply: 25,000,000,000 (25 billion) or 25% Token Format: Linea ERC20 bridged through LayerZeroContract Address: https://lineascan.build/address/0x78354f8dccb269a615a7e0a24f9b0718fdc3c7a7

$ZERO Utility

The ZeroLend ecosystem is designed to create value for token holders and stakers. Here are some of the utilities of the ZERO token:

1. Staking: Ve-tokenomics is a pivotal component of ZeroLend's economic structure. It involves staking $ZERO tokens for a predetermined duration and receiving vote-escrowed (ve) tokens. Zerolend introduces a unique ve-model that incorporates both single-token staking and dLP staking.

2. Protocol Fees: $ZERO tokens can be used to pay fees on ZeroLend in the future.

3. Incentives: Users who add liquidity on ZeroLend are incentivized to additionally stake a proportional number of $zero and dLP to unlock lucrative dual rewards in both the lending and borrowing side of the ZeroLend ecosystem

4. Integration with protocols: $ZERO will be integrated with other DeFi platforms. This cross-platform integration enables users to use $ZERO as collateral for DeFi loans, yield farming, or leverage its utility across other DeFi use cases.

5. Protocol Eligible Incentives: All future potential airdrops the protocol receives will be distributed back amongst token stakers / liquidity providers.

Token Distribution

Here’s a detailed breakdown of $ZERO allocation.

Private Sale

35% allocation will be distributed to our private sale investors. These investors helped bootstrap the protocol and secure tier 1 audits in the initial phase.

Vesting terms: 25% upfront. 6 months cliff, followed by linear 11 months linear vesting

Airdrop

18% of $ZERO tokens to early supporters and liquidity providers on ZeroLend. Our community enjoys the shortest and most lenient vesting terms, along with the highest % upfront.

Vesting terms: 40% upfront. 3 months cliff, followed by 3 linear months vesting.

Liquidity

After launch, 10% of $ZERO token supply will be allocated to liquidity pools to facilitate seamless trading.

Vesting terms: 80% upfront. 0-month cliff, followed by 11 linear months vesting.

Emissions

Of the total $ZERO supply, 20% is reserved for emissions to incentivize growth.

Vesting terms: 1200 months

Treasury

5% $ZERO tokens will be directed to our treasury. We will utilize this allocation for operational expenses, future initiatives, and ecosystem expansion.

Vesting terms: 11 months

Advisors

7% of $ZERO tokens are reserved for advisors / industry leaders who helped grow the protocol through their experience and connections.

Vesting terms: 8% upfront. 6month cliff, followed by 11 months linear vesting

Team

From the total supply, 5% of $ ZERO tokens are reserved for team members to incentivize their contributions and the long-term growth of the ZeroLend protocol.

Vesting terms: 0% upfront, 12 months cliff, followed by 48 months linear vesting.

$ZERO Emissions Schedule

The supply of $ZERO tokens set out for emissions is kept at 20 billion tokens (20% of the supply)

The first six months of $ZERO emissions are inflationary. After six months of TGE, the emissions have become deflationary.

Concluding Thoughts

$ZERO tokenomics is designed to ensure ZeroLend's long-term sustainability. Most of the $ZERO inflation (from liquidity mining, treasury allocation, private sales, etc.) will end within a year. After 12 months, we will reduce emissions by half every year.

This will ensure a steady increase in the circulating supply, with approximately 78% $ZERO in circulation by the end of a year post-TGE. The remaining 22% will be released using exponential decay.

For those who would like to examine precise numbers on how much ZERO will be added to circulation month by month, an Excel sheet (linked here) has been created.

About ZeroLend

ZeroLend is one of the fastest-growing lending protocols with a focus on LRTs, RWA lending, privacy, and account abstraction.

• Website: https://zerolend.xyz/

• Twitter: https://twitter.com/zerolendxyz

• Discord: https://discord.gg/zerolend

• DefiLlama: https://defillama.com/protocol/zerolend