[ZIP] ZyFAI Incentives — Buyback & Burn and Native Yield for Stakers
Author: Gauthier / ZyFAI DAO
Date: 2025-08-31
Summary
This proposal seeks DAO approval to allocate protocol-generated fees toward a monthly Buyback & Burn + Native Staker Rewards program that supports ZFI value and incentivizes long-term staking.
- Each month, the DAO uses yield fees to market-buy ZFI on the open market.
- 50% of the purchased ZFI is permanently burned (deflationary).
- 50% is redistributed to stakers in native ZFI, streamed linearly over the following month.
- Chain handling: Rewards are computed on total staked ZFI aggregated across ZKSync + Base. Payouts are streamed to each wallet on the chain(s) where it held stake at the monthly snapshot.
Motivation
ZyFAI is pioneering autonomous DeFi via agent-powered smart wallets and curators, with a mission to steer on-chain capital through non-custodial, auto-rebalancing methods.
The ZFI token is the accelerator of ZyFAI’s products and growth loops. Prior DAO initiatives (e.g., rZFI incentives approved July 22) helped lift TVL by ~105% to ~$5M. A Buyback & Burn + Native Staker Rewards flywheel reduces circulating supply while routing protocol value directly to aligned stakers — reinforcing token strength and user incentives.
Specifications
Fee Source
- Protocol performance fee: 10% collected to the DAO multisig.
- Illustrative estimate (for context): ~$62,500/month (10% performance fee on 15% average annual yield over $50M TVL → 50,000,000 × 0.15 × 0.10 ÷ 12).
Monthly Flow
- Route fees → market-buy ZFI.
- Burn 50% of the purchased ZFI (send to a null address).
- Distribute 50% to stakers in native ZFI via linear accrual over the following month (streaming or epoch-based).
Staker Set & Aggregation
- Snapshot: End-of-month snapshot aggregates active stakers across ZKSync + Base.
- Pro-rata: Each wallet’s reward is proportional to its share of total staked ZFI at snapshot.
- Chain handling: Rewards are streamed on the chain(s) where a wallet held stake at snapshot time.
- Eligibility window: Staking during Month A entitles the wallet to a ZFI stream during Month B (linear over Month B). Early unstake in Month B stops further accrual.
APY Calculation
Let M = monthly staker rebate in ZFI (50% of the ZFI purchased that month), and S = total staked ZFI across ZKSync + Base at snapshot.
- APR:
APR ≈ (12 × M) / S - APY:
APY ≈ (1 + M / S)^{12} − 1
All yields are expressed in ZFI (not USDC-equivalent terms).
Illustrative Example (using ~$62,500 monthly fees and 50,000,000 ZFI staked)
| Item | Value |
|---|---|
| Token price | $0.028 |
| Monthly fees | $62,500 |
| ZFI purchased monthly | 62,500 / 0.028 ≈ 2,232,143 ZFI |
Staker rebate M (50%) |
≈ 1,116,071 ZFI |
Estimated total staked S |
50,000,000 ZFI |
| APR (illustrative) | ≈ 26.79% |
| APY (illustrative) | ≈ 30.33% |
Note: If the DAO ever directed 100% of purchased ZFI to stakers (no burn), same inputs would imply APR ≈ 53.57% and APY ≈ 68.89%.
Reporting
A monthly public report will include:
- Fees collected
- ZFI bought, burned, and distributed
- Snapshot data (total staked, participants)
- On-chain proofs of distribution
Costs
- Operations: DAO multisig executes monthly buyback & burn; Ondefy Ltd handles snapshotting, allocations, and streaming via Merkl.
- Infrastructure: Uses existing staking dashboard + Merkl; no new infra required.
- Gas: Users cover claim transactions (if any).
- Admin: No additional DAO costs expected beyond routine ops.
Implementation Plan
- DAO multisig executes the monthly cycle: route fees → market-buy ZFI → burn 50%.
- Staker rewards (Ondefy Ltd):
- Take end-of-month snapshot across ZKSync + Base (aggregate total stake
Sand per-wallet stakes). - Compute
M = 50% × (ZFI purchased); allocate pro-rata by snapshot share. - Stream native ZFI over the following month via Merkl; claims live on the staking dashboard.
- Publish the monthly report (fees, buyback, burn, distribution, proofs).
- Take end-of-month snapshot across ZKSync + Base (aggregate total stake
- Start timing: First snapshot at the end of the first full calendar month following approval; first reward stream runs during the subsequent month.
- Governance: No additional vote required unless parameters (burn/split, fee source, scope) change.
Decision
Approve the Buyback & Burn + Native Staker Rewards program as specified above, with:
- 50% of monthly purchased ZFI burned
- 50% of monthly purchased ZFI distributed to stakers in native ZFI, streamed over the following month
- Aggregation across ZKSync + Base (no fixed per-chain split); distributions are pro-rata to each wallet’s share at the monthly snapshot