May 29 marks the date of a significant milestone for Zaros with the launch of the ZRS token, initiating a crucial step towards the decentralization of the protocol.

In this article, we explore every aspect of ZRS that you need to understand, including:

• LBP System

• Key Features

• Tokenomics

• veZRS

• Zaros DAO

• zPOINTS

Let’s get going!

LBP System

The initial opportunity to acquire ZRS will be via a Liquidity Bootstrapping Pool (LBP) on Fjord Foundry, starting on May 29 and running until June 1.

We have intentionally chosen to introduce ZRS through an LBP to ensure equitable access and enable a community-driven approach to price discovery. This method is in line with our commitment to fostering a more inclusive ecosystem.

Key advantages of LBPs compared to other methods include:

• High-to-Low Pricing Mechanism: Similar to a Dutch Auction, LBPs start with high token prices that decrease over time, encouraging a fair and balanced participation.

• Dynamic Asset Weighting: LBPs deviate from traditional Initial DEX Offerings (IDOs) by incorporating variable token weighting within the pool, promoting a more equitable distribution of tokens.

For those unfamiliar with LBPs, we recommend reviewing the documentation available on Fjord Foundry to better understand the benefits of using this method for token launches.

Key Features

ZRS sticks to the ERC-20 standard and functions as the utility token for Zaros. By locking ZRS tokens into the protocol for periods up to one year, holders receive veZRS tokens.

This locking mechanism not only grants holders voting rights within the Zaros DAO but also entitles them to a share of the trading fees generated by the leverage trading DEX. The amount of voting power increases with the length of the token lock, enhancing holders' influence over protocol decisions.

Here are the main benefits of ZRS:

• Trading Fees Distribution for veZRS Lockers:

veZRS entitles holders to 15% of the trading fees from the Perpetuals DEX. The distribution of these rewards is proportional to each holder's voting power, which increases with the duration of the lock. In essence, the longer your ZRS tokens are locked, the greater your share of the trading fees.

• Voting Power:

By locking ZRS tokens to acquire veZRS, users gain not only a portion of the DEX’s trading fees but also enhanced voting rights within the Zaros DAO. The duration of the token lock directly correlates to voting power, providing greater governance control to those more deeply invested in the protocol's future.

• Swap Fees Distribution:

Holders of ZRS tokens will also benefit from the swap fees generated by the ZRS-ETH pool on Balancer, adding another layer of utility and reward for token ownership

Tokenomics

Ticker: ZRS

Total Supply: 1,000,000,000

Initial Supply: 96,520,000

Token Distribution Breakdown:

• Investors: Allocation for early investors with a 6-month cliff and a 12-month vesting period.

• Future Core Contributors: Token allocation for upcoming core team members with cliff and vesting periods TBD.

• IDO LBP: Token allocation for the Initial DEX offering, to be launched through Fjord Foundry's LBP. No cliff, no vesting.

• Ecosystem Incentives (zPoints): Includes incentives for initial protocol participation, ongoing incentives for protocol participation for the next 4 years, and airdrops.

• Treasury: Reserved tokens for operational needs, opportunistic fundraising, and ongoing expenses. 0,75% at TGE, no cliff, and vesting schedule TBD.

• Advisory: Tokens allocated to advisors with a 6-month cliff and an 18-month vesting period.

• Core Contributors: Token allocations for the core team members with a 6-month cliff and a 24-month vesting period.

For detailed information on the emission schedule, please refer to this spreadsheet.

Revenue Distribution

The Zaros Revenue Distribution system is responsible for managing the allocation of ETH real yield accrued by the protocol through fees paid by traders using Zaros' trading products.

• 70% to ZLP Vaults: The majority of the accrued ETH is directed to ZLP Vaults LPs, rewarding them for market-making and generating liquidity for Zaros.

• 15% to veZRS Lockers: A significant portion of the revenue is allocated to veZRS lockers, promoting long-term investment and active participation in the ecosystem.

• 10% to the DAO Treasury: This allocation is reserved for the DAO Treasury. This portion empowers the DAO with funds to support its decision-making processes.

• 5% for Buyback and Burn of ZRS: The remaining revenue is utilized to purchase and subsequently burn ZRS tokens, effectively reducing the total supply.

It's important to note that these allocations are subject to change through future ZCCPs (Zaros Configuration Change Proposals).

veZRS

The veZRS token adopts the ve80/20 system, essentially resembling the vote escrow model but with an 80/20 Balancer Pool Token (BPT) instead of the raw ZRS token.

veZRS is an NFT obtained through the deposit of LP tokens from the ZRS/ETH 80/20 pool on Arbitrum. This NFT carries voting power determined by token quantity and lock duration, with locking periods extending up to 1 year on Zaros. Longer lock times result in higher voting power.

Regarding fees, Zaros accumulates various tokens from trading fees and liquidations based on the collateral of the trade and converts them into ETH.

Zaros DAO

Following the IDO, the Zaros DAO will be initiated. Aligned with the decentralized principles of blockchain and DeFi, Zaros will establish a DAO to guide the direction of the protocol's development and progression.

Decision-making within the DAO will revolve around two types of proposals: ZIPs (Zaros Improvement Proposals) and ZCCPs (Zaros Configuration Change Proposals).

• ZIPs: The purpose of this process is to ensure changes to Zaros are transparent and well governed. A ZIP is a design document providing information to the Zaros community about a proposed change to the system. The author is responsible for building consensus within the community and documenting dissenting opinions.

• ZCCPs: Documents for making a case for modifying one of the system configuration variables. The intent is to provide a clear and detailed history behind each configuration change and the rationale behind it at the time it was implemented. The author of the document is responsible for building consensus within the community and documenting dissenting opinions.

zPoints

On Zaros, each season brings an opportunity for users to earn rewards through zPoints, which can be converted into ZRS tokens. It's important to understand that each season will feature its own distinct points system. For example: points earned during season 1 will not carry over to season 2, nor will they have the same conversion rate.

Key Aspects:

Seasonal Rewards: Earn zPoints by engaging in various seasonal activities including platform engagement, participating in the Trading League Competition, and contributing liquidity to ZLP Vaults.

Conversion to ZRS Tokens: Accumulated zPoints will be converted to ZRS tokens at specific time windows in the future, by the end of each season.

Distinct Points System: The points system varies per season. Points from season 1 will not be transferable to season 2, nor the conversion rate necessarily will be the same, it may change.

Trading League Competition:  Participating in the Trading League Competition is an excellent strategy to boost your zPoints balance. By engaging with its actions, not only can you increase your zPoints, but you also have the chance to earn Elos. These Elos serve as multipliers, significantly enhancing your total zPoints accumulation.

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About Zaros

Zaros is the first LRTFi perpetuals DEX powered by a CEX-like UX coming to Arbitrum & Monad. It enables boosting ETH staking & restaking yield by delegating liquidity to the protocol's ZLP Vaults, while traders on the other side may leverage up to 100x across crypto, FX, and commodities perpetuals.

Zaros recently has successfully raised $1.8 million in funding. The round saw participation from prominent venture funds, including SNZ Holdings, Seven Capital, Cogitent Ventures, and DCI Capital.

Notable early angel investors include Fernando Martinelli, founder of Balancer; Kieran Warwick, founder of Illuvium; Danny Wilson, CFO of Illuvium; Antony Sassano, founder of TheDailyGwei; Andy Chen, CTO at Scalene and former Lead Architect at Synthetix, and Kevin Lu, CEO at Scalene and former Growth Lead at Band Protocol.