Abstract

This Zaros Implementation Proposal (ZIP-3) proposes a temporary adjustment to the revenue distribution breakdown for $ZRS holders. The proposal seeks to change the current allocation to a new structure, with 70% directed to ZLP Vaults liquidity providers and 30% to the DAO Treasury.

This change aims to help the Zaros DAO cover monthly expenses, retain talent, and extend the company's financial runway. The change will happen in phases:

1. Monthly trading volume < U$800M (to achieve U$100k in revenue for the DAO treasury in the new proportion) → new established proportion sustained unless a review is requested by the community;
2. Monthly trading volume between U$800M and U$2.4B → the ZIP-3 must go under review and thresholds for reverting the revenue share proportions must be submitted for voting;
3. Monthly trading volume > U$2.4B → the changes are reverted to the original breakdown.

Keep in mind that we cannot predict how long it will take to reach each threshold, so community feedback will be taken in consideration actively. We want to hit the threshold as soon as possible, so we can share revenue with token holders and buyback and burn, but we need to extend the DAO runway to continue developments post main net.

Current Revenue Distribution

The current revenue distribution for $ZRS holders is as follows:

• 70% to ZLP Vaults: The majority of accrued ETH is allocated to the ZLP Vaults LPs, as they are responsible for market making and creating liquidity for Zaros.
• 15% to veZRS Lockers: This portion incentivizes veZRS lockers, promoting long-term holding and participation within the ecosystem.
• 10% to the DAO Treasury: Funds allocated to the DAO Treasury empower the DAO to support decision-making processes and initiatives.
• 5% for Buyback and Burn of $ZRS: This revenue is used to buy back $ZRS tokens from the market and burn them, reducing the overall supply.

Proposed Change

The proposed temporary change is to adjust the revenue distribution as follows:

• 70% to ZLP Vaults: This allocation remains unchanged, ensuring that the majority of rewards continue to flow to liquidity providers who are integral to Zaros' liquidity and market-making activities.
• 30% to the DAO Treasury: Increasing this allocation from 10% to 30% will help the Zaros DAO cover monthly expenses, retain talent, and ensure financial stability.