zkBTC Bridge community meeting reveals token economic model, building a decentralized cross-chain ecosystem

zkBTC Bridge is a cross-chain bridge based on zero-knowledge proof technology, connecting the Ethereum and Bitcoin ecosystems, dedicated to achieving secure and efficient cross-chain asset transfers. As the protocol continues to evolve, its team recently revealed plans to launch its governance token in a community AMA, aimed at promoting the decentralization of the protocol and community governance. Holders of the governance token will gain governance rights over zkBTC Bridge and the team's subsequent projects. This governance model ensures the long-term robust operation of the protocol, reducing reliance on the core team, thereby building a completely decentralized Bitcoin cross-chain bridge.

By launching the governance token, zkBTC Bridge will officially take an important step towards becoming a public cross-chain infrastructure, committed to providing users with a secure, transparent, and sustainable decentralized asset cross-chain solution.

Decentralized Incentive Mechanism, Returning Value to Community Users

The zkBTC Bridge team announced that approximately 75% of the governance tokens will be distributed through a mining mechanism, incentivizing protocol users and miners to jointly maintain the ecosystem. The tokens will be distributed as follows:

• 75% of tokens generated through mining: Distribution as follows
• User rewards: The vast majority of tokens will be returned to all cross-chain transaction users.
• Miner and foundation rewards: A small portion of tokens will be allocated to miners and the foundation to incentivize miners to provide computing resources and pay on-chain fees to maintain the normal operation of the protocol. It also supports the long-term operation of the foundation.

Revenue Distribution Mechanism and Fee Structure

The revenue distribution mechanism of zkBTC is fully managed by smart contracts to ensure transparency:

• Revenue distribution: All transaction fees generated from cross-chain transactions will be allocated to a public revenue pool managed by smart contracts, and protocol revenue will be automatically distributed to token holders, allowing users to receive revenue based on their token holdings.
• Flexible withdrawal: Users can flexibly withdraw their share from the revenue pool according to their needs, and can freely use $zkBTC from the revenue pool based on their governance token holdings.

The zkBTC Bridge token economics also reference Bitcoin's mining design, ensuring the scarcity and long-term growth potential of its governance tokens by periodically reducing mining rewards and bridge fees. In the economic model design, the fee and reward halving mechanism:

• Bitcoin-based asset: The governance token is designed as a Bitcoin-based asset, with its value linked to Bitcoin.
• Appreciation model: The protocol will adjust the fee rate and bridge mining rewards based on a predetermined algorithm, ensuring that the exchange rate of each token relative to Bitcoin will continue to rise with the continuation of the protocol.

Role of Miners and Revenue Composition

Miners play a crucial role in the zkBTC Bridge ecosystem, ensuring the secure transfer of cross-chain assets and data on-chain through the computation of zero-knowledge proofs (zk-proof).

Computing proofs and paying on-chain fees:

• Ensuring the integrity of transaction data and the reliability of on-chain storage.
• Providing stable cross-chain transaction services to optimize user experience.

• Revenue structure:
• In return, miners will receive token rewards and cross-chain transaction fee revenue, incentivizing them to continuously maintain network stability.

Role and Functions of the zkBTC Foundation

To ensure the long-term stability and security of zkBTC Bridge, the project team will also establish a foundation as the core support for ecological development, with main responsibilities including:

• Network maintenance and security assurance: The foundation will continuously monitor the system, promptly fix potential vulnerabilities, and optimize protocol performance.
• Community development and ecological construction: The foundation will also promote developer incentive programs to foster innovative applications and expand partnerships.
• OPZKP development and operational management: The foundation will continue to fund research and development of the OPZKP opcode and infrastructure applications based on this new opcode, as well as maintain the long-term stable operation of zkBTC Bridge.

Dual Function of Governance Tokens

The revenue token of zkBTC is not only a distribution reward but also a governance token for future projects. All token holders have decision-making power over ecological development, supporting decentralized governance:

• Community governance and voting rights: Token holders can participate in significant protocol changes, fund allocation, and strategic decisions.
• Ecological expansion and innovation support: Through the governance proposal mechanism, voting on partner incentives and future application development proposals.

Through this dual-function design, zkBTC achieves an effective balance between economic incentives and community governance, ensuring the long-term prosperity of the ecosystem. Additionally, future plans for zkBTC Bridge include introducing more asset support, expanding the cross-chain ecosystem, and developing new projects to broaden the use cases of zkBTC.

zkBTC Bridge will establish a community-driven cross-chain ecosystem, achieving true decentralized management and sustainable development, further promoting Bitcoin as a circulating underlying asset across the entire chain.