Zeta Markets, a decentralized exchange (DEX) on the Solana blockchain specializing in derivatives trading, has officially launched its native token, ZEX, and commenced the airdrop distribution of 100 million ZEX tokens. This initiative is aimed at rewarding early users and promoting sustained participation in the protocol.

Initially, the token was planned to have the ticker "Z," but it was later changed to ZEX. The airdrop represents 10% of the total 1 billion ZEX supply, with 8% allocated to Zeta traders in the first phase and 2% reserved for early stakers in the second phase. The second phase will distribute tokens 28 days post the token generation event based on the amount of tokens staked and the duration of staking. Users have 90 days to claim their airdrop allocations.

The airdrop allocations are determined by users' "Z-Score," a metric based on trading activity, which was recorded in a snapshot on June 7. Additionally, there is a community allocation for members of Zeta's ecosystem partners who participated in a community airdrop competition.

Tristan Frizza, the founder of Zeta Markets, emphasized the platform's goal of merging the speed and convenience of centralized exchanges with the transparency and security of decentralized finance (DeFi). "The launch of $ZEX marks a pivotal step in this journey, placing decision-making power into the hands of our community while driving long-term growth in the protocol by strategically aligning the interests of different stakeholders," Frizza said.

Avichal Garg, Managing Partner at Electric Capital, a Zeta-backer, praised the airdrop for its thoughtful design and research, stating it sets a new standard for community token distributions.

Understanding the ZEX Token

ZEX plays a central role in governance, staking, and incentives within Zeta Markets. It uses a vote-escrow model, similar to the system pioneered by Curve Finance on Ethereum, where token holders lock their tokens for a set period to gain more voting power, encouraging long-term commitment to the project.

Additionally, ZEX functions as the native gas token and incentive mechanism for Zeta X, Zeta’s “DeFi Layer 2” on Solana, which aims to deliver centralized exchange-like performance on-chain. The mainnet for Zeta X is expected to launch in the first quarter of 2025.

A significant portion of the ZEX supply, 30%, is earmarked for ongoing trading incentives, which will be distributed to Zeta traders at the end of each epoch, every 28 days. The initial "Genesis Epoch" runs until July 25, with 8 million ZEX tokens allocated as trading rewards.

Founded in 2021, Zeta Markets is one of the leading derivatives exchanges on Solana, boasting $17.2 million in total value locked (TVL), according to DeFiLlama. The platform claims to have generated over $10 billion in cumulative trading volume and has more than 125,000 monthly active users. Zeta aims to become the premier decentralized exchange for perpetual contracts on Solana.

In May, Zeta Markets announced a $5 million strategic funding round led by Electric Capital, with participation from Digital Asset Capital Management, Selini Capital, Airtree Ventures, and several prominent angel investors including Anatoly Yakovenko of Solana and Richard Wu of Tensor. This followed an $8.5 million round led by Jump Capital in December 2021, bringing Zeta's total funding to $13.5 million.

Venture capital investors own approximately 17.5% of the total ZEX supply, with their tokens vested over a three-year period following the launch, including a one-year cliff.