From Governance to Utility: $ZK Token Proposal, Part I

TLDR

$ZK launched as a pure governance token. With interoperability and Prividiums now moving into real-world use, this proposal adds concrete economic utility. The model is straightforward: when the network is used, the ecosystem should benefit. Value would accrue in two ways:

  1. Onchain interop fees for moving assets and messages across ZKsync and Prividiums.

  2. Offchain enterprise licensing for advanced modules used by banks and institutions.

All value would flow into a governance-controlled system that buys ZK and then directs it toward staking rewards, token burn, and ecosystem funding. The goal is to align usage with value, make decentralization economically sustainable, and ensure the network captures a meaningful share of the economic benefits it creates.

Introduction

Over a year ago, the ZK token launched with a single purpose: governance of the ZKsync protocol. That launch also marked the transition of ZKsync from a single chain to the Elastic Network: a network of chains designed to be incorruptible, secured by cryptography and Ethereum finality rather than validator trust. At that stage, it was appropriate to avoid prematurely defining economic token utility. The architecture and adoption path were still forming.

Since then, the network has matured considerably. The Elastic Network today includes almost two dozen chains, interoperability is nearing readiness, and, crucially, Prividium has progressed from concept to real institutional adoption. While earlier deployments established the technical foundation, interoperability and Prividiums represent the most meaningful and economically significant surfaces for value accrual at the protocol level. These systems introduce direct, recurring economic flows, and are being explored by many of world’s largest Financial Institutions. As they soon go into production, it becomes necessary to define clearly how value returns to the network, so that participants and institutions building on this architecture understand the economic model that underpins it.

Earlier this summer, an initial outline was shared for how ZK token utility could evolve. This post expands that thinking and offers a structured path forward for community review and discussion. It is the first in a series of posts intended to initiate the conversation and help the ZK Nation arrive at an updated, collectively shaped ZK tokenomics design.

This document presents a proposed design for community governance consideration only. No representations are made regarding potential economic outcomes. Implementation requires community approval through established governance processes. This is not investment advice or a solicitation.

Foundational Principles

Token-economic systems are complex and nuanced. To guide this discussion, we first propose aligning on a small set of clear principles that frame the design and ensure coherence across all token-utility mechanisms:

1. Make decentralization economically sustainable

ZKsync is one of the leaders in creating the incorruptible financial infrastructure for the world. Such infrastructure cannot depend on a single actor or a narrow set of institutions. True credible neutrality (a core principle we share with Ethereum) requires that the system remains independent, permissionless, and resistant to capture over time.

For decentralization to persist, it must be economically sustainable. The network needs a durable economic model that supports ongoing development, security, and operation by many independent participants, not by a central sponsor. The tokenomics must therefore enable a self-sustaining ecosystem in which decentralization reinforces itself rather than erodes as the system grows.

2. Capture a meaningful share of the value the network creates

Networks create value through compounding effects: as more participants join, the set of possible interactions, counterparties, and markets expands, increasing the usefulness of the system for every actor. For this value to strengthen the system rather than dissipate externally, a meaningful portion must flow back into the network’s economy. This enables continuous improvement, security, public goods funding, and long-term independence. The design goal is to establish a self-reinforcing economic loop where adoption increases network resources, and those resources in turn enhance the network for all participants.

3. Align all incentives around the token

To maintain coherence and neutrality, the token should serve as the unified economic reference point for the ecosystem. Builders, operators, users, and institutions should benefit from the network’s success in a shared and transparent manner. Avoiding parallel incentive structures prevents fragmentation and ensures that all participants are working toward the same long-term outcome: strengthening the network and advancing its mission. Incentives must point in one direction.

Proposed Tokenomics Architecture

Under the proposed design, ZK token utility would be grounded in value created by the network across two economic vectors:

Category Source Description
Onchain value Protocol-native fees Value captured directly through onchain mechanisms at the protocol layer, such as fees for interoperability and other core settlement and messaging functions.
Offchain value Real-world binding mechanisms Value that cannot be captured natively onchain, but can be routed back to the network through real-world arrangements, such as licensing for enterprise software components.

All value would flow into a governance-controlled economic mechanism that uses proceeds to:

  • Acquire ZK from the market ($ZK buybacks)
  • Allocate ZK across:
  1. Supply reduction ($ZK burn)
  2. Staking rewards for decentralized operators
  3. Treasury funding for protocol and ecosystem development

The governance layer would determine allocation parameters, adjusting over time as adoption grows and requirements evolve.

Onchain Value: Interoperability Fees

There are many ways a protocol could capture value onchain, but most introduce friction or distort incentives. Over the past year, we identified one mechanism that is most economically meaningful and aligned with credible neutrality: interoperability fees.

Moving digital assets across system domains today is costly and inefficient. Users either rely on custodial cross-chain bridges with trust and security risks, use capital-intensive third-party bridging solutions, or fall back to traditional financial rails with multi-day settlement and high capital costs.

The upcoming ZKsync native interoperability protocol will enable secure, near-instant movement of assets and messages across public chains and private Prividiums. Removing custodial risk and capital requirements materially lowers costs and increases certainty. In this context, modest protocol fees will not add friction. They will remain significantly lower than existing alternatives while delivering stronger guarantees and faster settlement.

For the sense of scale, interbank messaging already operates at extraordinary volume. SWIFT processes more than 50 million messages per day, amounting to tens of billions annually. If private chains become as common as corporate banking infrastructure, interoperable settlement and messaging will be continuous and foundational. In that setting, protocol-level interoperability fees, whether measured in basis points, cents, or dollars depending on value and use case, represent a straightforward and transparent source of sustainable value for the network. Even a modest share of global coordination activity migrating to cryptographic, Ethereum-anchored systems would establish a meaningful and durable economic base for ZKsync.

Offchain Value: Enterprise Licensing

ZK Stack has been open source from day one and will always remain open source. This is core to the ZKsync ethos. The base protocol, prover, and interoperability layer are public goods available to all, ensuring transparency, verifiability, and credible neutrality. This commitment is essential to building an incorruptible financial infrastructure that can serve as a foundation for the global digital economy.

At the same time, history of the open-source movement shows that developer ecosystems can be weakened when large enterprises adopt community-built infrastructure without contributing back. Certain advanced components, relevant primarily to regulated financial institutions and major enterprises, can enable significant value creation in private environments. Examples include integrations with treasury and ERP systems, compliance and reporting modules, audit interfaces, and operational control tooling. When such capabilities are funded by the ecosystem, it is reasonable that their use by enterprise participants returns value to the ecosystem.

Under this proposal, value generated from such enterprise components would flow into the same governance-controlled mechanism as on-chain value. In practice, this means establishing structures through which licensing-based revenue can return to the network and enter the same ZK buyback and allocation pathways, preserving a single unified economic loop. Achieving this requires careful legal design and compliant organizational structuring to ensure that real-world value flows can be directed back to a decentralized ecosystem in a transparent and enforceable way. That work is already underway.

Large financial institutions routinely pay hundreds of thousands to millions annually for critical infrastructure and compliance systems. There are thousands of banks worldwide, and even partial adoption of ecosystem-aligned enterprise modules would create a meaningful sustainable economic foundation.

Next Steps

This proposal presents a high-level direction for $ZK token utility. It will be shared on X and the ZK Nation forum to collect community feedback. We encourage all ecosystem participants to review, comment, and contribute to the discussion.

Once there is broad support for this direction, we will follow with detailed proposals covering interoperability fee mechanics, enterprise-value routing, governance controls, and reporting structures. The goal is to arrive at a clear, implementable model, adopted through governance and refined as the network scales.

The ZK token began as a tool for governance. Through governance, it can now become the heartbeat of an incorruptible economy. Together, we have the chance to define what a truly self-sustaining, community-owned financial network looks like.

17 Likes

Thank you for sharing this proposal! It’s exciting to see the ZK token mature from a purely governance token to a utility token. The promise of enterprise adoption feels more tangible now than ever.

That said, the path to adoption will come with many challenges. Although the total addressable market is very large —as you mention, there are thousands of banks worldwide — these financial institutions continue to rely on legacy and highly customized ERP systems.

They also routinely spend hundreds of millions of dollars on ERP implementation upgrades and “financial transformation” projects, often led by consulting firms such as Deloitte, Accenture, McKinsey, and others.

How are Prividiums expected to integrate with these legacy systems in practice and what is the technical readiness of enterprises (and ERP providers such as Oracle and SAP)? Furthermore, do their internal development teams have the required skillsets or do they need to be upskilled?

Looking ahead, there’s certainly opportunity for ZKSync to capture a portion of Prividum implementation fees and have them directed to the token. It could be interesting to explore a programmatic mechanism for this — particularly one where governance plays a role in setting parameters, and where capped minters are used to structure incentives for integration partners.

Thanks again for sharing the proposal, and hope this response kicks off some more discussion!

3 Likes

Hello,

I’m writing in my capacity as Director of the ZKsync Foundation, and I want to express strong support for the proposal “From Governance to Utility: $ZK Token Proposal, Part I”.

I think this proposal is thoughtful, timely, and strategically important for the ZKsync ecosystem.

Why I believe this is the right direction

  • The proposal adresses protocol evolution as ZKsync infrastcture matures. With interoperability and enterprise adoption advancing, the community will be able to add sustainability mechanisms to support ongoing development. The framework focuses on three key areas: ensuring decentralized operations remain viable long-term, establishing protocol funding through technical fee structures, and maintaining unified governance incentives. This represents exactly the kind of infrastructure planning you’d expect as a network transitions from early-stage governance to production-scale operations
  • I especially like the unified model of: value → buy-backs → allocate to burn / staking / ecosystem funding - this creates a clean loop where usage translates into network strength and growth
  • From a real-world institutional / financial infrastructure perspective, the enterprise licensing vector is compelling: enables institutions (banks, corporates, regulated entities) to adopt, integrate and pay

Some reflections & questions

  • Governance vs Utility: The proposal marks a thoughtful shift from the earlier “pure governance” narrative to a “governance + utility” narrative - this is important, timely and positive
  • Metrics & transparency: More work is needed on the mechanics for the buy-back, burn and staking - how they are governed, reported, and audited
  • Token supply / inflationary pressures: This model creates strong links between usage and deflationary forces which further strengthen the positive impact of the Token in the ecosystem
  • Community involvement and feedback loops: I strongly support the idea that this is an experiment and community-shaped design. I encourage the community to participate in this debate and to give feedback so that the model can evolve fast to support and accelerate real-world adoption

My overall position

In short: I support this direction.

Given the fast growth in ecosystem and institutional adoption, the time is right to transition from pure governance to live utility. I believe this design positions the network to accrue value effectively, support decentralisation, and generate meaningful alignment.

I look forward to seeing how the proposal takes shape and I encourage all community members, builders, institutions, and token-holders to review carefully, ask hard questions, and contribute their views: this is our network.

Thanks to Alex for framing this clearly and inviting community collaboration.
Marco Cora, Director, ZKsync Foundation

4 Likes

I have been working with ZKsync since the testnet stage, and I’m genuinely glad to see these proposed innovations. Especially now, as the era of interoperability has arrived - we’ve witnessed the shift from multichain to crosschain and now to omnichain.

Overall, I consider the proposed mechanisms for modernizing tokenomics acceptable. The key point, however, is to remember that offchain value should never outweigh onchain value; otherwise, we risk creating a profitable yet essentially Web 2.5 service - 1 trapped in endless competition with the outdated world, instead of building its own “blue ocean” of Web 3.0 innovation.

2 Likes

Thanks for bringing this very valid point up for discussion. We are actively engaged in conversations with potential partners such as Deloitte (they actually were the consulting partner in the Prividium white paper from this fall).

We are actively working on launching initial work with some of the major ERP systems to ensure proper integration is available in Prividiums. The goal is to make it as easy for any Web2 company to integrate it into existing systems and decrease the time to go into production from many months to just a few weeks. It will still take us some time but we’re on track to have all of this complete in 2026.

2 Likes

Fully agree. It’ll be critical for us to take some of the best use cases that are building as app chains using ZKsync Stack and making them be core primitives within interop. This would transform interop into more than just a messaging and value transfer layer and into an actual business service layer or app store that would drive more adoption. This also greatly increases our ability to have different pricing for interop based on the actual business value being provided on top of just messaging/value transfer

I think an alternative idea

  1. Why a supply burn makes sense

With a 21 billion total supply of ZK tokens, there is a risk of oversupply, weak scarcity and muted incentives for holders, users and builders. A targeted burn of a portion of that supply helps drive several key benefits:
• Creates scarcity and signal of value
By reducing the circulating supply, each remaining token can represent a larger share of network value. This builds a clearer link between usage of the network and token value, enhancing appeal for long-term holders.
• Aligns incentives with ecosystem growth
When tokens are burned from the ecosystem, the remaining holders benefit more directly from increased protocol usage, network fees, or enterprise licensing revenues. That alignment encourages users, builders and operators to adopt and support the network.
• Reduces inflation pressure / supply overhang
Even if the network grows, if the token supply remains large or continually dilutes, the price may stagnate. Burning supply helps remove that overhang and mitigate inflation-type pressures that discourage speculative interest and ecosystem investment.
• Demonstrates commitment and confidence
A token burn is a visible, irreversible act. It signals to the community (and markets) that the protocol is actively managing tokenomics, taking value capture seriously, and prioritising utility over pure governance. This builds credibility.
• Strengthens the value capture flywheel
If the network captures value (via interchange fees, enterprise licensing, etc. as referenced in the ZK proposal), burning tokens channels that captured value into the token base itself—making it more than just a governance instrument. This closes the feedback loop: usage → value capture → token burn → greater remaining token value.

In short: burning supply transforms the token from a largely passive governance asset into a dynamic “share” of the protocol’s economic future.

⸻

  1. How to implement a burn-mechanism (and governance best practices)

To ensure this is credible, fair and sustainable, consider these design points:
• Define the source of tokens to burn
For example: a portion of protocol revenues (on-chain fees, interoperability fees, enterprise licences) could be used to buy ZK on the open market and burn it. This creates a buy-and-burn mechanism rather than simply issuing fewer tokens.
This mirrors the model described in the proposal: value flows into a governance-controlled economic mechanism that uses proceeds to acquire ZK and then allocate to burn, staking rewards and treasury. 
• Set transparent burn triggers & parameters
For example: every quarter, a percentage of net revenue or protocol fees is used for buy-back and burn. The community can vote thresholds via governance, adjust over time as adoption grows, and disclose outcomes. The proposal also emphasises allocation via governance. 
• Ensure remaining token usage / utility is meaningful
Burning supply alone isn’t enough. The token must drive real utility: governance rights, fee discounts, revenue-sharing, staking or usage rights. The referenced proposal already moves ZK from pure governance toward utility anchored in network economic value. 
• Communicate upside to holders
Make sure the community understands that by burning supply, every holder has a proportionally larger claim on future value capture. Transparency builds trust; regular reporting of burn volume and remaining supply is key.

⸻

  1. Why revenue sharing with token holders can be preferable to staking

Many protocols use staking (lock tokens to support the network, earn rewards) as the primary incentive mechanism. But there are strategic benefits to revenue sharing (i.e., distributing a portion of real-world protocol revenues) instead of, or alongside staking. Here are key arguments:
• Direct economic alignment
Revenue sharing means holders benefit from actual business/usage outcomes: the more the network is used, the more revenue flows back to holders. In contrast, staking often rewards token locks regardless of underlying network usage. The alignment is tighter with revenue share.
• Simplicity and liquidity
With revenue sharing you may allow tokens to remain liquid (or less locked) while still participating in upside. Staking often requires lock-up periods, slashing risk, complexity for participants and potential centralisation of staking nodes.
• Encourages long-term holding and network loyalty
If token holders know that growth in enterprise adoption, interoperability usage, fees etc. will directly increase their share of profits, they are more likely to stay engaged and oriented toward ecosystem success rather than short-term yield chasing.
• Less dependency on operational infrastructure / validator risk
Staking usually requires validators, nodes, collateral, and potentially exposes holders to operational risk (mis-behaviour, downtime, slashing). Revenue sharing shifts the focus away from these infrastructural burdens and places the economic benefit more broadly across all holders.
• Scales better as network matures
As the network grows into enterprise usage, institutional adoption, licensing — these revenue streams can grow far beyond what pure staking can deliver via token inflation. Revenue sharing lets holders capture a meaningful portion of high-value business activity rather than just inflationary rewards.
• Enhances token as a “security-like” share of project success
While still compliant with regulatory design, allowing token holders to share in revenue helps position the token as a genuine stakeholder instrument. This can enhance investor interest and signal seriousness of business model. (Of course, regulatory counsel is required.)
• Encourages ecosystem growth rather than just token lock-in
If rewards come purely from staking, the incentive is lock tokens and maintain staking. If rewards come from revenue, the incentive becomes actively growing usage: building integrations, driving volume, onboarding enterprise customers. That’s more valuable for ecosystem health.

1 Like