Token Utility
Overview
This section goes over the function of ZETA and how it is used across components of the ZetaChain ecosystem.
ZetaChain’s mission is to serve as a platform for universal access, simplicity, and utility across any blockchains. ZetaChain is a Proof-of-Stake blockchain designed for interoperability, supporting the creation of omnichain dApps that can span any chain, including the Bitcoin blockchain, where all transaction, incentives, data security, and cross-chain interaction requires ZETA tokens to function.
Token utility of a blockchain ecosystem involves a vast range of topics and concepts. ZETA token utility is based on extensive research, past work, and prior technologies. The ecosystem is designed and aimed to scale with the increase of both utility and usage of ZetaChain. The protocol itself has an in-built governance protocol that allows the network to modify and upgrade itself based on needs of ecosystem and network participants in order to support the public good and functionality of the ZetaChain Network.
Core Network Functionality
ZetaChain’s network can read from or write to any connected chain through its node architecture. ZetaChain thus allows smart contracts on ZetaChain to manage assets on connected chains from a single place, using a new ERC-20 compatible token standard called ZRC-20. Liquidity in the Threshold Signature Scheme (TSS) addresses are managed by a distributed network of validators in a decentralized manner. Assets are deposited into TSS addresses and ERC-20 custody contracts on connected chains, and those assets are thereby usable at a native level by logic in a ZetaChain smart contract. Users on external chains may send messages to either simply transfer value and data to other connected chains (”cross-chain messaging”), or to call contracts on ZetaChain’s EVM that can orchestrate liquidity on any connected chain. They may also connect directly to ZetaChain’s EVM using a wallet like MetaMask and interact with EVM contracts directly. Together, ZetaChain’s network functionality provides a complete platform for developers to create future-proof, chain-agnostic apps and more with a single deployment on ZetaChain. These single contract deployments are referred to as omnichain smart contracts.
In-turn, ZetaChain unlocks use cases and utility such as Bitcoin Smart Contracts and programmability together with all other chains it connects to, apps accessible from any chain, fewer steps and simpler cross-chain transactions, and more.
Primary Participants
There are 4 primary participants
- ZetaChain Core Validators: who secure and maintain the network.
- ZetaChain Observer-Signers: who secure and maintain observation of external chains and the TSS addresses and thereby the cross-chain functionality of the network. These two roles are batched into a single set of validators, but may be decoupled later.
- Transacting users: who pay fees to transact on ZetaChain zEVM and for cross-chain tractions.
- ZETA token holders/delegators: who can participate in governance and security of the network.
ZETA Utility
The ZetaChain ecosystems as it relates to ZETA functions primarily through these core pillars:
- The protocol provides fixed block rewards/incentives emissions of ZETA to validators that will transition to variable inflation after the initial fixed pool. These incentives (and slashing) underlie the proof-of-stake blockchain that aligns and secures the protocol.
- Transaction (gas) fees paid in ZETA are distributed to validators, delegators, and other network participants in the Proof of Stake and protect the network from spam and DDOS attacks.
- For cross-chain messaging, ZETA is burned on the source and minted on the destination, not only used for bundling gas but as the medium of value transfer between connected chains to facilitate value transfer without the creation of new wrapped assets.
- Core Liquidity Pools comprised of ZETA and other external chain assets let users transact on ZetaChain and between connected chains (for gas on outbound transactions) through ZetaChain. The liquidity providers (LPs) receive trading fees and other liquidity incentives to provide liquidity for this in the form of native tokens, like native gas tokens.
Dive Deeper
To learn more about all of the above, check out the following documents on different components and concepts of the ZETA Utility and Ecosystem.