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ZilSwap: A Decentralized Exchange on Zilliqa

Zilliqa introduced ZilSwap, its first decentralized exchange (DEX), which allows for permissionless trading of ZIL and ZRC-2 assets on the Zilliqa blockchain. Since its launch, ZilSwap has gained strong community support and currently has a total value locked (TVL) of USD $1.1 million.

Introducing $ZWAP: ZilSwap's Native Governance Token

$ZWAP is a native governance token by ZilSwap, which aims to transfer control of the protocol to the community. This ZRC-2 governance token empowers stakeholders to participate in decision-making processes, contribute to the platform's development, and drive improvements in a fully decentralized and permissionless manner. An on-chain voting system enabled by $ZWAP will allow adjustments to protocol fees and other parameters under the purview of this decentralized organization. The details of the voting process for this decentralized autonomous organization (DAO) are currently being finalized and will be shared soon.

The Distribution of $ZWAP Tokens

The distribution of $ZWAP tokens will start on February 3, 2021, at 16:00 UTC+8. The distribution mechanism consists of two key stages that benefit users who have contributed to the protocol.

Stage 1: Retroactive Distribution

Stage 1 rewards early users, testers, and builders who have actively engaged with ZilSwap before January 18, 2021, at 18:00 UTC+8. These users can retroactively claim $ZWAP tokens, which account for 5% of the total token supply. Out of the 50,000 $ZWAP tokens allocated for this stage, 15% will be given to developers as a retroactive reward, distributed monthly over 12 months. The remaining 85% will be divided among traders and liquidity providers based on their respective contributions and can be claimed starting from February 3, 2021.

Traders (20%): Rewards are weighted by the volume traded in $ZIL.

Liquidity providers (80%): Rewards are weighted by the time and liquidity provided in $ZIL.

Stage 2: Liquidity Mining

In Stage 2, tokens continue to be distributed to key stakeholders, including liquidity providers and developers. The remaining 95% of the $ZWAP token supply will be released as future rewards over a period of 152 weeks, starting from February 3, 2021, at 16:00 UTC+8. Each week, 6,250 $ZWAP tokens will be released. The distribution for Stage 2 is as follows:

Developers of the protocol (15%)

Liquidity providers (85%): Rewards are based on the approved pool weight and time-weighted liquidity in $ZIL. This means that users will receive $ZWAP rewards proportional to their pool weight and the duration of their liquidity provision.

Users who provide liquidity to the initial pools, namely XSGD/ZIL, gZIL/ZIL, and ZWAP/ZIL, will be eligible to receive $ZWAP token rewards. Additional pools may be added in the future through a governance vote.

Claiming $ZWAP Rewards

Starting from February 3, 2021, at 16:00 UTC+8, users can view and claim their $ZWAP tokens on ZilSwap. Simply connect your wallet via Zilpay or your private keys, and you will be able to see your available $ZWAP rewards next to your wallet address at the top of the page. Select the rewards and click on "Claim Rewards" to complete the process.

The Future of ZilSwap

The release of the $ZWAP governance token highlights ZilSwap's commitment to a decentralized future and establishes the foundation for further growth of the protocol. Following the token release, the Switcheo team, the team behind ZilSwap, will continue working on V2 improvements to the platform. These improvements include more flexible integration after the Zilliqa blockchain upgrade, enabling the protocol to interact with other types of smart contracts. Users can also look forward to upcoming features such as decentralized token lists, single-step swapping of ZRC-2 tokens, and cross-chain integration through Switcheo TradeHub, a decentralized protocol.