Partnering with DAFI Protocol will enable ZKSwap to integrate DAFI’s native token, dToken, as a possible staking reward for users. By creating its own synthetic dTokens, ZKSwap would be able to encourage staking and market participation while reducing the number of native tokens that need to be issued. That way, ZKSwap would be able to maximize reward distribution and mitigate inflation risks tied to new token issuance, the company explained in a 3 June announcement.
As a synthetic asset, the dZKSwap token (dZKS) reward would be pegged to the ZKSwap network, offering smaller incentives during low network demand and higher incentives as the demand rises.
For DAFI, the partnership will unlock new opportunities for the synthetic token protocol to integrate with ZKSwap’s Layer 2 applications and access lower network fees. ZKSwap’s Layer 2 solution would also enable DAFI to conduct more efficient synthetic asset airdrops and create low-fee liquidity pools.
“With the integration of DAFI’s synthetics through the creation of dZKS, we are confident to expand the utility of our innovative model into the Layer2 ecosystem. This will potentially transform the dynamics of how Layer2 Network works,” said Zain Rana, the founder of DAFI Protocol.