KEY TAKEAWAYS
- ZRO holders will vote on December 20, 2024, to decide if LayerZero should implement a protocol fee for each message.
- The referendum allows ZRO holders to influence the financial structure by voting to activate or deactivate the fee switch.
- The voting process is streamlined, enabling holders to vote with their total ZRO balance across different chains in a single transaction.
- The LayerZero Foundation oversees the referendum, aiming to ensure the protocol’s sustainability and growth.
On December 20, 2024, at 00:00 UTC, ZRO holders will participate in the inaugural fee switch referendum. This vote will determine whether LayerZero will begin charging a protocol fee for each message. The referendum is a pivotal event for the LayerZero community, allowing ZRO holders to influence the protocol’s financial structure.
The fee switch referendum is an on-chain vote conducted every six months. It enables ZRO holders to decide on the activation of the protocol fee, which is equivalent to the total DVN and Executor fees charged for the verification and execution of each LayerZero message. The collected fees are used to buy back and burn ZRO, thereby reducing its circulating supply.
Understanding the Referendum Process
The referendum centers on a single question: “Turn the fee switch on?” ZRO holders can cast their votes on the LayerZero Foundation’s website. The voting process is streamlined through LayerZero’s lzRead, which allows holders to vote with their total ZRO balance across different chains in a single transaction.
For example, a user holding 100 ZRO on the BNB Chain and 1,000 ZRO on Base can vote from Polygon using MATIC. When they vote “Yes” or “No,” lzRead aggregates their ZRO balance across chains, calculates their voting power (1,100 ZRO), and sends the result to the hub chain.
Participation and Voting Details
The referendum is open to holders of the circulating supply of ZRO. Tokens distributed through the Community Allocation for both “Retroactive Initiatives” (83,283,110 ZRO) and “Ecosystem and Growth” (26,664,139 ZRO) form the voting pool. The vote will commence on December 20, 2024, and will last for seven days. Participants can vote “Yes” to activate the fee switch or “No” to keep it off.
If the quorum is not met, the voting requirement of the circulating supply decreases by 5% for each subsequent vote, down to a minimum of 20%. This mechanism ensures that the community can regularly reassess and adapt the protocol fee to align with the evolving needs of LayerZero.
The LayerZero Foundation, a not-for-profit entity, oversees the referendum. Its mission is to ensure the long-term sustainability and growth of the LayerZero protocol and ecosystem. For further details on the fee switch referendum, interested parties can join the LayerZero Discord community.
For more information, the official announcement can be found here.
Explore More News:
Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy of CoinsHolder. Content, including that generated with the help of AI, is for informational purposes only and is not intended as legal, financial, or professional advice. Readers should do their research before taking any actions related to the company and carry full responsibility for their decisions.
