About
About ZETA Token
Token Utility

Token Utility

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 dApps that can span any chain, including the Bitcoin blockchain, where all transactions, incentives, data security, and interoperability rely on 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.

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 is managed by a distributed network of validators in a decentralized manner. Assets are deposited into vaults 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 connected chains may send messages to transfer value and data to other connected chains, 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.

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 transactions across chains, and more.

There are 3 primary participants

  • ZetaChain Validators: who secure and maintain the network.
  • Transacting users: who pay fees to transact on ZetaChain's EVM and for transactions that span connected chains.
  • ZETA token holders/delegators: who can participate in governance and security of the network.

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.
  • Core Liquidity Pools comprised of ZETA and other connected 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.

To learn more about all of the above, check out the following documents on different components and concepts of the ZETA Utility and Ecosystem.

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