Zeta Markets, a Solana SOL -5.25% -based decentralized exchange for trading crypto perpetuals, is set to launch and airdrop its "governance" token Z.

The Z token will have a total supply of 1 billion, with 10% or 100 million, set to be distributed through an airdrop, Zeta said Tuesday. Half of that 10% will be airdropped to active traders and community members of Zeta, determined by their Z-Score, an ongoing points system on the platform. Another 1% will be allocated to users of Zeta who are part of strategic communities in Solana, while the remaining 4% will be rewarded to Z stakers, Zeta said.

Zeta founder Tristan Frizza told The Block that the Z token is expected to launch in May, and that's when airdrop claims will also start. Frizza said snapshot will be announced "in the coming weeks."

Frizza added that Zeta has received some listing offers for Z and is currently conducting due diligence with "several of the top exchanges."

Z to 'pioneer' the vote escrow model on Solana

Zeta said the Z token will pioneer the vote escrow model on Solana — the model that Curve pioneered on Ethereum ETH -3.74% . The vote escrow model in Curve allows CRV -3.87% (Curve's governance token) holders to lock up or escrow their tokens for a specified period to earn voting power. The longer CRV tokens are locked in escrow, the greater the voting power they accrue. This system incentivizes stakeholders to make decisions to benefit the Curve protocol over the long term.

"The general premise is token stakers will be rewarded exponentially more voting power and token rewards by staking for longer periods of time," Frizza said.

Following the token launch, 30% of Z's total supply will be directed towards incentivizing maker and taker traders, Zeta said.

Zeta's venture capital investors own roughly 17.5% of Z's total supply, Frizza said, adding that their tokens are vested over a period of 3 years following the launch, with a one-year cliff.

Founded in 2021, Zeta is backed by high-profile venture investors, including Electric Capital, Jump Capital, Wintermute and Solana Ventures.

Zeta to launch Solana L2 rollup

After the token launch, Zeta plans to release a Solana Layer 2 rollup this year. "Essentially, we're building the first DeFi Layer 2 on Solana," Frizza said. "It will use Solana exclusively as the settlement and DA [data availability] layer, which aims to allow us to achieve faster settlement times and cheaper DA costs than comparable Ethereum rollups."

"It allows us to build an extremely high-performance exchange comparable with centralized exchanges and similarly alleviates the congestion issues that we are currently experiencing on Solana Layer 1," Frizza added.

The technical details of Zeta's L2 rollup will be released in its whitepaper "in a few weeks," Frizza said.