[ZKsync] XVS Incentives Model Proposal

Summary

As part of the multichain expansion, Venus Protocol aims to create an active and engaging community on ZKsync by introducing an incentive structure that rewards both liquidity providers and borrowers.

Key points of the plan:

  • Market Emissions: 30,000 XVS will be allocated to the first 4 months as liquidity incentives.
  • XVS Vault Base Rewards: 6,000 XVS will be allocated for the first 4 months for the ZKSync vault, with an additional 20% from the protocol reserves on ZKSync from the previous quarter as per tokenomics.
  • Bootstrap Liquidity on DEX: 1,500 XVS and 5 ETH will be used to provide liquidity on DEXs.
  • Multichain Development Grants: 3,000 XVS allocated for community-driven multichain and cross-chain expansion.

Incentive Structure

Table 1: XVS monthly distribution

Chain/Quarter Month 1 Month 2 Month 3 Month 4 Total Distribution (%)
ZKSync Markets 12,000 6,000 6,000 6,000 30,000 83%
ZKSync XVS Vault 1,500 1,500 1,500 1,500 6,000 17%
Total 13,500 7,500 7,500 7,500 36,000 100%

Table 2: XVS monthly distribution per market

Pool Market M1 Allocation M2 Allocation M3 Allocation M4 Allocation Total Allocation Distribution (%)
Core ZKsync 1,800 900 900 900 4,500 15
Core ETH 2,400 1,200 1,200 1,200 6,000 20
Core BTC 2,400 1,200 1,200 1,200 6,000 20
Core USDT 1,800 900 900 900 4,500 15
Core USDC.e 3,600 1,800 1,800 1,800 9,000 30
Total 12,000 6,000 6,000 6,000 30,000 100

Table 3: Proportional distribution for supply and borrow

Pool Market Supply Borrow
Core ZKsync 80% 20%
Core ETH 80% 20%
Core BTC 80% 20%
Core USDT 80% 20%
Core USDC.e 80% 20%

*This incentive structure may be adjusted based on market conditions, as well as continuous analysis and results.

XVS Vault Base Rewards

Venus Protocol will maintain its commitment to the XVS vault rewards, for the new ZKSync vault deployment. Each quarter, a base reward of 4,500 XVS will be allocated to vault rewards, with an additional 20% of the protocol reserves added.

Table 4: XVS Vault Base Rewards for ZKSync (XVS)

Quarter Rewards
Q1 4,500 XVS
Q2 4,500 XVS + 20% of Q1 Reserves
Q3 4,500 XVS + 20% of Q2 Reserves
Q4 4,500 XVS + 20% of Q3 Reserves

Details

The emissions schedule was calculated based on the market proportions on the Ethereum Mainnet and Arbitrum. Furthermore, the allocation weights were distributed based on market performance on ETH Mainnet and Arbitrum in terms of Market Size and Total Borrow Amounts.

DEX Bootstrap Liquidity

With the new XVS vault on ZKSync for Venus Prime and Governance, this proposal aims to provide liquidity with 1,500 XVS and 5 ETH to seed a pair on DEXs and ensure a smooth start.

Multichain/Cross-Chain Development Grants

Venus Protocol is launching a Multichain/Cross-Chain development grants program to boost its cross-chain deployments. With a 3,000 XVS budget, this initiative aims to encourage community participation in multichain development, either via RFPs or strategic funding opportunities. This will support Venus’s innovation and expansion across different blockchain ecosystems.

Conclusion

In conclusion, following the successful deployment for Ethereum and Arbitrum, Venus Protocol is now applying a similar strategy for ZKSync. This includes allocations of 30,000 XVS for liquidity incentives, 6,000 XVS for vault rewards, 3,000 XVS for multichain development grants, and 1,500 XVS & 5 ETH for bootstrapping DEX liquidity. This strategy, with its focus on gradual emissions to encourage user retention and loyalty, is designed to expand Venus’ participation across the DeFi ecosystem.

5 Likes

Introduce incentives, get a first mover advantage, and try to see how much growth you can achieve :grinning:

3 Likes

Currently, this step is very important to get the highest possible TVL before our competitors get around to and finish deploying zkSync too! It is necessary for me to deploy the reward initiative as soon as possible to attract the largest part of the zkSync army to our clear and user-friendly UI. :sunglasses:

2 Likes

Look good, hope to see it live soon

2 Likes

First of all, I would like to congratulate the Venus team on this great launch on ZKSync. I am very happy to see the protocol grow along with the amazing community that always supports them. I have always believed that Venus will go far, and now with this launch on ZKSync, I think the incentive model is perfect. I believe this will promote significant growth on this new network, and I look forward to seeing it implemented soon.

1 Like

First moovers loading!!!

good idea! We need this strategy to help multichain development for Venus.

Very important proposal. Let’s do it to increase TVL on this network.

giving additional awards for first-timers seems like a great idea, I fully support this initiative

No doubt, this is a great approach. It will definitely expand our user base! :wink:
Congrats once again Venus community :blush: