Perpetual Funding of AZ

AZ is an incredible asset to Zenon. How do we automate funding it so we don’t rely on ad-hoc generosity to keep it alive?

I have a couple ideas but they are incomplete and there are smarter people here so will hold them so we don’t anchor.

Any fee/revenue generating use cases and solutions funded by AZ should have an embedded “community fee” which is paid directly back into AZ.

E.g. @sumamu 's bridging fee (znn to wznn) intended to pay marketers.

Nobody need marketers.

Zenon Network already owns 25% of the emissions in perpetuity with the Orbital Program. We are currently going to use them to incentivize liquidity providers. The idea is great and we should see the results materializing once the multichain technology goes live. As liquidity and network adoption increase, the percentage of emissions dedicated toward liquidity providers should go down. This will represent extra funds that can be redirected to AZ.

Additionally, I believe AZ should be able to delegate/stake and compound it’s balance sheet like any other network participant. For anyone thinking this will remove “rewards” from other participants, consider anyone who is just delegating/staking is a passive participant, and any user with any skill set can and should apply for AZ funding, effectively moving rewards from passive participants to active ones. The benefits of active participation compound over time.

The fact that AZ funds are not being compounded seems to me like an overlooked issue by founding devs (unless there is a technical limitation in the implementation of this mechanic). I can’t think of any cons to AZ being able to earn yield as any other network participant. In fact, I think it would be wise for Zenon Network to slowly increase and acquire an LP position as protocol-owned liquidity. AZ could then vote to move liquidity from one chain to another, and not only rely on Orbital rewards for 3rd party actors providing liquidity.


You need APR to bring participant. Let’s decrease it so we get less interesting for nodes operators if a strange take.

I hear your concerns, but I doubt a couple of APR percentages will be the determining factor for new participants considering investing in ZNN. Also, considering sumamu is also a participant of the highest value, and he is leveraging AZ funds, not some node staking rewards, my point still stands. Builders/active participants should come first in this growth spiral.

I also considered the notion of AZ delegating and staking. Delegation could be evenly split to all/top 30 pillars to avoid unfair weighting, but it would impact APR.

Another thought was for AZ to take a fee for all successful payments, but this would probably just result in contributors asking for X+fee so it’s a 0 sum game

There’s also other funding aspects that could fall into similar buckets, the forum being a big one. Hosting costs are currently being paid for by 0x, we need a way for this to be organically funded without one of us having to cover it.

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We could leave APR intact for the vast majority if we only “taxed” pillars…

In the unlikely event that AZ funds are exhausted before development is completed, the best source for funding AZ is to mint more ZNN/QSR.

That can be perpetual (having the protocol mint daily for AZ) like it is for other components of the network or triggered by the DAO governance module (tbd).

Pillars which represent a ridiclously low number of node VS the ethos of decentralisation we claim to follow. Aren’t we willing to attract more pillars ?

Yes and a good way to do that is AZ. I think a move from 15% to 14% would scare less people away than funding through AZ would attract. Plus you would attract builders that work for their pillar vs people just looking for return.

Of course attracting pillars is another issue entirely. I agree you dont want to kill APR to a point where obtaining a pillar is undesirable but I dont think anyone would approve a “tax” high enough to do that.

Not saying this is the right idea, just an idea.

1% would add ~43 ZNN and ~50 QSR per day to AZ.

Additionaly it would have to be voted on by the pillars so it has a safeguard there WRT APR risk. And yes this alone would not do the job but maybe one of many ideas that could be implemented each incrementally moving the needle.

Not really significant.

Yeah. Really anything’s better than 0 ZNN/day, but if we’re going to do it, we must do better than that.

This may be an unpopular opinion, but if we were to redirect rewards from an existing source to AZ, it should be noted that delegators are getting a lot of value for the least risk compared to other roles in the network.


To the discussion on pillar participation, if you had a set of criteria for top 30 (example given was voting fits in that criteria) you could also have a voluntary automated donation to AZ. Idea being higher the donation contributes to the top 30 criteria. Maybe you have “momentum / delegation / AZ”

Without a way to objectively define what a “good” vote would be, this will only incentivize pillars to vote Abstain.

From a consensus perspective, the idea of having delegators decide which pillar produces more momentums also contributes by adding an external source of entropy for deciding which pillars get to produce more momentums.

However, economically it would have a better impact than having the funds go out to delegators.


Yes or blindly vote wherever the early momentum is which I think happens a lot now.

I have an idea:

Create a mechanism to delegate and/or stake the AZ fund. Delegating will generate ZNN, while staking will generate QSR.

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It’s the same as allocating a percentage of the daily znn/qsr emission to AZ, so we can just use the same orbital mechanism, why creating a new mechanism to delegate and stake?