Zeta Markets, a decentralized exchange on Solana, has announced the Token Generation Event for its native token ZEX. 

This event also marks the start of the ZEX token airdrop, which aims to reward loyal users and promote long-term participation in the protocol.

ZEX will be integral to Zeta Markets, supporting governance, staking, and incentives. The token introduces a vote-escrow model to Solana, improving governing and incentives for long-term stakers. 

Tristan Frizza, the founder of Zeta Markets, told crypto.news in an interview that the vote-escrow model expands on the concept pioneered by Curve on Ethereum by introducing two new ideas.

“Firstly, stakers are exponentially rewarded for the duration of their lock — therefore more heavily allocating power to those who are committed for longer. Secondly, we introduce the ability for stakers to vest and unlock their tokens gradually — providing users more liquidity and limiting the supply shock on the ecosystem caused by mass unlocks,” Frizza said. 

The airdrop includes 10% of the total ZEX supply, with 8% reserved for Zeta traders. Early stakers can qualify for a second airdrop, distributed based on staking duration and amount locked.

Starting today, eligible users have 90 days to claim their airdrop allocations.

Airdrop distribution

The initial airdrop rewards genuine and long-term users based on their Z-Score, which measures trading activity on Zeta. 

“With our initial airdrop, we’re distributing 80M $ZEX (8% of the total supply) across almost 80,000 users,” Frizza said. “Our goal was to place $ZEX in the hands of committed, long-term aligned traders who actively contribute to our protocol’s growth.”

The distribution process included safeguards such as minimum Z-Scores, maximum token allocations, linear distribution, boosts for early supporters, and sybil detection.

“We capped the allocation to whales and conducted sybil analysis to ensure a fair and equitable distribution to the 80k qualified wallets,” Frizza said.

The token ZEX will also serve as the native gas token and incentive mechanism on Zeta X, Zeta’s upcoming DeFi Layer 2 on Solana. Zeta X aims to deliver centralized exchange (CEX)-like performance on-chain, with its mainnet launch expected in Q1 2025.

Long-term growth

A substantial 30% of the ZEX supply is dedicated to ongoing trading incentives, distributed at the end of each 28-day epoch. The Genesis Epoch, running until July 25, 2024, features 8M ZEX in trading rewards, along with a boosted referral program and community grants.

“30% of the total supply will fuel trader incentives over the next 90 months,” Frizza said, highlighting the strategic alignment of the tokenomics, “Our vote-escrow model provides exponentially boosted incentives and greater governance influence to token holders that stake more and for longer.”

Zeta Markets aims to become the leading DEX for perpetual contracts, capitalizing on the shift from centralized finance (CeFi) to decentralized finance (DeFi). With over $10 billion in trading volume and 125,000 monthly active users, the platform plans to scale through the launch of Zeta X. 

“Zeta advances the frontier of what is possible on Solana by introducing a DEX that combines the performance of centralized exchanges with the transparency and security of self-custodial, decentralized finance,” said Avichal Garg, Managing Partner at Electric Capital.

Zeta Markets continues to focus on long-term growth and community engagement, setting new standards for decentralized exchanges.