ZKsync Launches Governance Model Amid Decline in Daily Transactions

ZKsync, an EVM-compatible ZK rollup, has officially introduced its governance model, marking a significant milestone for the protocol. This new system, now live on the mainnet, aims to decentralize decision-making and enhance community involvement in shaping the protocol's future.

A Decentralized Governance Model

The governance model introduced by ZKsync is designed to ensure a balanced distribution of power within the ecosystem. According to a blog post by ZKsync, the governance structure is composed of three main bodies:

1. Token Assembly: This body allows token holders and their delegates to propose and vote on protocol changes directly. The Token Assembly plays a crucial role in shaping the protocol’s direction through community-driven decision-making.
2. Security Council: Comprised of security experts, the Security Council is responsible for reviewing and approving code changes. Their expertise is essential for maintaining the security and integrity of the protocol.
3. Guardians: The Guardians serve as a check on the system, holding veto powers to ensure that all decisions align with the core values of the ZKsync ecosystem. This layer of oversight helps prevent any single party from exerting disproportionate control over the protocol.

This governance model reflects ZKsync’s commitment to decentralization and community engagement. By distributing power across these three bodies, the protocol aims to avoid centralization and promote a more democratic decision-making process.

Background and Recent Developments

ZKsync, developed by Matter Labs, rolled out its Era mainnet in March 2023. The governance model was unveiled in June 2024, coinciding with the release of the ZK token and an airdrop to the community. Despite these advancements, the network has faced challenges in maintaining transaction activity.

Decline in Daily Transactions

Since the launch of the governance model, ZKsync has experienced a significant decline in daily transactions. The seven-day moving average of daily transactions on the ZK Rollup has dropped by nearly 85% since the beginning of the year. Transactions have decreased from approximately 1.3 million to around 195,000.

This decline raises questions about the adoption and usage of the ZKsync network following the implementation of its new governance system. The decrease in daily transactions could be attributed to various factors, including market conditions, user behavior, or the impact of the governance transition.

Conclusion

The launch of ZKsync’s governance model represents a significant step towards decentralization and community involvement in the protocol’s development. The introduction of the Token Assembly, Security Council, and Guardians aims to create a balanced and democratic decision-making process. However, the notable drop in daily transactions since the governance model’s implementation suggests that the network is facing challenges in maintaining user engagement and activity. As ZKsync continues to evolve, it will be crucial to monitor how these governance changes impact the protocol’s overall performance and adoption.

September 2024, Cryptoniteuae