ZKsync’s new governance proposal could fundamentally shift how the protocol generates revenue for its holders.
Summary
- ZKsync continues its 65% weekly rally, rising 15% in one day
- A new governance proposal would introduce new revenue generation
- Features include buybacks, staking rewards, and real-world fee capture
ZKsync has continued last week’s rally, with an upgrade that aims to prove its long-term utility and tokenomics. On Tuesday, Alex Gluchowski, CEO and co-founder of Matter Labs, announced a major ZKsync that would bring rewards to its holders.
The upgrade proposed by the creator of the ZKsync network would turn the purely governance token into one that generates utility. The network would collect both off-chain and on-chain fees and use the proceeds to buy ZK tokens.
A part of these tokens will be burned to increase their scarcity over time. The rest will go toward staking rewards and to a treasury to fund ecosystem development.
“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,” Gluchowski said.
ZKsync rallies after Vitalik’s endorsement
Following the news of the upgrade, Zksync rose 15% in a single day, adding up to a 65% weekly rally. There were several catalysts for its rally, the main one being the endorsement of the Ethereum Layer-2 chain by Vitalik Buterin.
On November 1, Ethereum’s co-founder suggested that ZKsync’s contributions to the Ethereum ecosystem are important, if often undervalued. His remarks were about the network’s Atlas upgrade, which promised significant improvements in throughput and finality. Following the announcement, the token surged up 70%.
“ZKsync has been doing a lot of underrated and valuable work in the Ethereum ecosystem. Excited to see this come from them!” Vitalik Buterin said.
Still, long-term benefits from ZKsync’s new tokenomics proposal will depend on the revenue it can generate. This includes both the revenue from network usage and off-chain partnerships.
