Introducing $ZWAP, ZilSwap’s Governance Token

Lynn Choy
Published in
4 min readJan 20, 2021


Last year, the first DEX built on Zilliqa — ZilSwap was launched. The non-custodial platform marked Zilliqa’s foray into decentralized finance (DeFi) by allowing for permissionless trading of ZIL and ZRC-2 assets on the Zilliqa blockchain. Since its launch, ZilSwap has gained solid support from the community, garnering a total value locked (TVL) of USD $1.1 million.

In ZilSwap’s next step towards becoming a truly decentralized platform, it will be releasing $ZWAP, a native governance token that transitions control of the protocol over to the community.

What exactly is $ZWAP?

$ZWAP is the new ZRC-2 governance token for ZilSwap that empowers stakeholders to take part in decisions governing the protocol, enact improvements and drive further development of the platform in a fully decentralized and permissionless manner. Fuelled by $ZWAP, the on-chain voting system will allow for parameters such as protocol fees to be adjusted under the purview of this decentralized organization. The voting process for this DAO is being worked on and more information will be released soon!

The $ZWAP governance token will follow a liquidity mining program where traders and liquidity providers are rewarded with $ZWAP.

Distribution of $ZWAP

The distribution of $ZWAP tokens will begin on 3 February 2021, 16:00 UTC+8 and its distribution mechanism is outlined by 2 key stages to users who benefit the protocol. The total supply of $ZWAP tokens is 1,000,000 $ZWAP.

Stage 1: Retroactive Airdrop

This stage distributes tokens to early users, testers and builders who have tried and tested the protocol. Users who have interacted with ZilSwap prior to 18 January 2021, 18:00 UTC+8, can retroactively claim $ZWAP tokens from 5% of the total token supply. Of these 50,000 $ZWAP tokens, 15% of the tokens are allocated to developers as a retroactive reward and distributed in a monthly token release over 12 months. The remaining 85% is split between traders and liquidity providers accordingly and can be claimed upon token release on 3 February 2021:

  • Traders (20%): weighted by volume traded in $ZIL
  • Liquidity providers (80%): weighted by time and liquidity provided in $ZIL

Stage 2: Liquidity Mining

This stage continues to distribute tokens to the key stakeholders of the protocol — liquidity providers and developers. The remaining 95% of the $ZWAP token supply will be released as future rewards to liquidity providers and developers over a period of 152 weeks. 6,250 $ZWAP tokens will be released each week starting from 3 February 2021, 16:00 UTC+8. The distribution of $ZWAP in Stage 2 is as follows:

  • Developers of the protocol (15%)
  • Liquidity providers (85%): according to approved pool weight, and time-weighted liquidity in $ZIL. This means that users will receive $ZWAP rewards proportional to the pool weight and the duration that they have contributed liquidity for.

Users who provide liquidity to the following 3 initial pools will be able to receive $ZWAP token rewards. More pools can be allocated rewards in the future through a governance vote.

  1. XSGD/ZIL: 20% (2x weightage)
  2. gZIL/ZIL: 30% (3x weightage)
  3. ZWAP/ZIL: 50% (5x weightage)

To illustrate, let’s assume the total rewards distributed in the first week is $1000. The 3 pools will receive $200 (20% x $1000), $300 (30% x $1000) and $500 (50% x $1000) respectively. Rewards for each pool will then be distributed to liquidity providers pro-rata by their share of contribution to the pools and how long they have provided liquidity for.

$ZWAP tokens can be viewed and claimed on ZilSwap’s pool page from 3rd February 2021.

Looking ahead

The release of the $ZWAP governance token re-emphasizes ZilSwap’s commitment towards a decentralized future and lays the groundwork for further growth of the protocol. Following the token release, Switcheo will continue to work on further V2 improvements to the platform. This includes more flexible integration after the Zilliqa blockchain upgrade which will enable the protocol to read other types of smart contracts. Users can also look forward to feature releases in the near future such as decentralized token lists, single step swapping of ZRC-2 tokens, and cross-chain integration through decentralized protocol, Switcheo TradeHub.

About Zilliqa

Zilliqa is a high-security, high-throughput public blockchain platform designed to scale to thousands of transactions per second. While the project was borne out of Singapore, Zilliqa is recognised globally as one of the World’s leading blockchain platforms.

At the time of the ZWAP launch the Zilliqa blockchain has processed almost 12 million transactions since launching its Mainnet in January 2019. It has a thriving global community of over 150,000 enthusiasts, more than 780,000 wallet holders, and a growing network of over 1000+ developers. Adoption-wise, Zilliqa has a flourishing ecosystem of over 80 projects from 20+ countries building on the platform. Major corporations rely on the Zilliqa platform for services like open and decentralised finance, asset securitisation, service tokenisation and incentivised marketing.

So for any developers, entrepreneurs and investors interested in building in the blockchain space, get in touch with the team at Zilliqa.

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About Switcheo

Switcheo builds platforms that break new ground. We bring you finance without limits, for lives without limits. Whether you’re a battle-weary trader or are just making your first purchase, there’s nothing cryptic about crypto on Switcheo. Leading the pack with multiple world firsts, your time spent with us will be a worthwhile investment.

This post was originally published on Switcheo blog.

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