ZKF Fair Launch

In the current Ethereum ecosystem, zk-rollup technology is widely recognized by the industry for its significant advantages in network expansion and transaction cost reduction. This technology greatly improves the throughput of the network by packaging a large number of transactions and processing them off-chain, while reducing user transaction fees, making the application of blockchain technology more practical and economical.

In this context, ZKFair, the first EVM-compatible Layer 2 (L2) platform developed based on Polygon's CDK and Celestia database, launched a 48-hour Fair Launch event on Christmas Eve 2023. The purpose of the event is to issue its new token ZKF. ZKFair plans to issue a total of 10 billion ZKF tokens. Participants can obtain airdrop qualifications by performing transfer operations on the ZKF chain and consuming gas. This mechanism ensures the fairness of token distribution, as the number of tokens obtained will be proportional to the amount of gas consumed. In addition, 25% of the ZKF tokens will be airdropped to members who have contributed to the community after the event, and the remaining 75% will be fairly distributed to the participants of this Fair Launch.

Token issuance model

1. Traditional Token Issuance

Traditional token issuance usually refers to the project issuing tokens directly to investors through private sales, pre-mining or public sales. This method may not have clear regulations and processes, and lack the participation of exchanges or other third-party platforms. It may include early private investment rounds, allocating tokens to early supporters, development teams or consultants, etc. This issuance method may have lower transparency and security because it is completely controlled by the project.

2.  ICO（Initial coin offering）

ICO is an early form of token sales, similar to an initial public offering (IPO) in traditional finance. In an ICO, a project sells newly created tokens to the public, usually to raise funds for project development and operations. Investors usually buy tokens in the expectation that the tokens will appreciate in value in the market in the future. ICO led the bull market from 2017 to 2018, but due to regulatory issues and fraudulent behavior by some project owners, its reputation has been damaged and it is rarely used now.

3.  IEO（Initial Exchange Offering）

An IEO is a token issuance method conducted through a cryptocurrency exchange. In an IEO, the exchange will conduct due diligence on the token project and provide a venue for the token sale on its platform. Investors need to register an account with the exchange and purchase the new token through the platform. IEOs are generally considered safer than ICOs because the involvement of the exchange provides a level of trust and verification for investors.

4.   IDO（Initial DEX Offering）

IDO is conducted on decentralized exchanges (DEXs) and does not rely on traditional centralized exchanges. Instead, it issues and sells tokens directly on DEXs through smart contracts. The advantages of IDO include higher transparency and lower participation barriers, making it a fairer and more web3 industry-friendly issuance method. IDO helps project parties quickly obtain liquidity because tokens can be traded on DEXs immediately upon issuance. However, in actual applications, IDO is mostly used as an auxiliary issuance method, and its proportion in the total issuance is not high.

 

IGO（Initial Gas Offering）

The Fair Launch of ZKFair can be considered a revolution in token distribution. Its form does not conform to any previous model. Participants obtain token airdrops according to the proportion of gas burned through their on-chain transfers; the issuer uses the gas paid by the participants as the income of this token issuance. This is innovative in both the airdrop rules and the financing form. After internal discussions, Bitrise Capital believes that this new form of token issuance can be called IGO (Initial Gas Offering), and the biggest features of IGO can be summarized as follows:

 

1. Issuance Standards

ZKFair’s Fair Launch demonstrated the fairness of its token issuance mechanism. Crucially, the mechanism has no restrictions on the identity of the participants: whether they are large institutions or individual retail investors, as long as they perform corresponding operations on the ZKFair chain during the event, they will automatically qualify for the ZKF airdrop. In addition, there is no whitelist or pre-sale process in the issuance of ZKF, ensuring equal participation opportunities. Of the total 10 billion tokens, in addition to the 2.5 billion allocated to community contributors, the remaining 7.5 billion tokens are fairly distributed to all event participants through airdrops. The entire issuance event is divided into four phases, each lasting 12 hours. The project party set a total GAS consumption cap of 3 million USDC, and an average distribution of 1.875 billion ZKF worth 750,000 USDC in each phase. In each phase, if the gas consumption exceeds the predetermined amount of 750,000 USDC, the project party will calculate the number of airdrops that the user should receive according to the proportion of gas consumed in that phase to the total gas consumption in that phase. For the excess gas consumed, the project owner promises to return it in proportion after the event ends.

For example, if a total of 1 million USDC of gas is consumed in the first phase, then user A who consumed 10,000 USDC will receive an airdrop of approximately 18.75 million ZKFs after the event ends, and will also receive a return of 2,500 USDC. This mechanism ensures that ordinary participants will not lose the opportunity to participate due to fierce competition from large capital participants. At the same time, by returning the excess gas fees in proportion, the mechanism also solves the problem of unnecessary burning of gas fees in previous such airdrop activities. Such rule design not only reflects the careful consideration of fair issuance, but also demonstrates ZKFair's commitment to fairness in action.

2. Nature of issuance

Under the Initial Gas Offering (IGO) framework, the roles and motivations of participants are significantly different from the traditional token issuance model. This new issuance mechanism is not based on direct financial investment, but on active participation and contribution to the ecosystem. In this framework, participants obtain air investment qualifications through interaction and transaction activities on the ZKFair chain, which includes using various applications on the chain and thus consuming gas. This type of participation is closer to consumption behavior, where users actively participate by using services and applications in the ecosystem, and in return, they receive token airdrops as additional rewards.

This model can be compared to traditional commercial promotions. For example, in a mall’s anniversary event, consumers can get extra gifts after spending a certain amount of money in the mall. Here, the mall (i.e., the ZKFair ecosystem) provides a wide variety of goods and services for consumers to choose from, and the gifts are equivalent to token airdrops that users receive by participating in ecosystem activities. This model not only encourages users to participate more deeply in the ecosystem, but may also reduce the legal risks associated with traditional token issuance to a certain extent, because it emphasizes participation and consumption rather than direct financial investment.

In addition, the design of the IGO model also reflects the importance of user participation in the field of blockchain technology and cryptocurrency, emphasizing the establishment of a more inclusive and dynamic ecosystem. This model encourages users to experience and support blockchain projects through the actual use of applications and services, thereby promoting the popularization and innovation of technology. In the long run, the IGO model can not only bring a wider user base to the project, but also help form a more active and healthy blockchain ecosystem.

 

IGO Market Prospects

The Inscription project has played a crucial opening role in the current bull market. Its success lies not only in effectively solving the asset issuance problem in the BTC ecosystem, but also in the fact that the "fair mint" principle it adopts has become the key narrative for the project's success. The core of this principle is to create a fair and open market environment driven by a wide range of retail investors, ensuring that everyone has the opportunity to participate. The openness and inclusiveness of this market environment is one of the main reasons why the market has given high recognition to the Inscription project.

On this basis, the emergence of the IGO (Initial Gas Offering) model can be regarded as a successful reference to the core concept of the Inscription Project. The IGO model emphasizes openness in the early stages of the project, allowing a wider range of ordinary investors to participate, which not only enhances the attractiveness and visibility of the project, but also effectively meets the financing needs of the project party and brings substantial returns to actively participating users. The design of IGO takes into account flexibility and universal applicability, enabling it to be widely used in a variety of first-layer (L1) and second-layer (L2) blockchain networks.

Both the Inscription Project and the IGO model reflect the current cryptocurrency market’s high attention to innovation and fairness. They not only provide new opportunities for participants, but also promote the healthy development of the entire blockchain ecosystem. With the application and development of these models, we have reason to believe that they will continue to have a profound impact on the cryptocurrency field, stimulate market vitality, and promote the attention and activity of more public chains. Just as the Inscription Project brought major breakthroughs to the BTC ecosystem, the IGO model is also expected to trigger a series of new innovations and active trends in the cryptocurrency field.

 

Industry evaluation

iZUMI Jimmy：

"ZKFair is the first Ethereum Layer 2 module blockchain to be fairly launched using the IGO model. iZUMi cooperates with ZKFair because it values ​​the technical strength accumulated by the team over a long period of time, and more importantly, the innovative token distribution model that respects the community, is user-friendly, has a low valuation, and is transparent and fair. As one of the earliest ecological supporters of multi-chain protocols and ZKFair, iZUMi hopes that more public chain partners can learn from ZKFair's successful experience and achieve success. iZUMi also launched the iZUMi Layer2 Fund in 2023 to provide sufficient on-chain liquidity for the cooperative public chains on Day 1."

Bitrise Capital Kevin：

"ZKFair is a very successful and highly watched project case recently. I think its case is textbook-level. I found this to be an innovation and tried to define this new way of issuing tokens in the way of IGO. From this project, we see that the innovation of web3 can come from self-driving and community-based innovation. This reminds me of the term "self-finance". In the case of ZKFair, we see not only breakthroughs in business models, but also a great emphasis on de-financialization. The IGO model allows us to see a new way to start a project and dilute the attributes of finance. Just like when you go shopping in a supermarket, you consume and get basic services, and then the supermarket gives you points. For the cold start of the project, this not only attracts users, but also solves the problem of early start-up funds for the project. Of course, the current economic model of ZKFair needs to be improved, but I am very optimistic about the self-iteration ability of the ZKFair team, especially the ability to quickly adjust when encountering problems during the project launch process to adapt to market changes."

Lumoz Alvaro:

“Lumoz is committed to developing and promoting advanced applications of blockchain technology. Our collaborative project, ZKFair, is a Layer-2 solution based on ZK-Rollup technology. It aims to improve transaction processing efficiency and maintain full compatibility with the Ethereum Virtual Machine (EVM) by integrating Polygon’s Common Development Kit (CDK) and Celestia’s Data Availability Layer (DA). ZKFair chooses USDC stablecoin as a means of payment for transaction fees to reduce network congestion and increase transaction speed. In addition, ZKFair’s architectural design supports a decentralized network of certifiers, which reflects our commitment to network autonomy and sustainable development. This decentralized network structure is designed to increase network participation and achieve more transparent and fair operations through a community governance model.

The launch of Fair-L2 LaunchBase marks a solid step forward for Lumoz in supporting emerging ZK-L2 projects. This platform aims to provide key technical support for subsequent new projects and facilitate their smooth launch. The cooperation with Polygon also takes advantage of ZK-Rollup to improve transaction efficiency and network security. "