ZENCOIN Tokenomics

Last updated 19 Dec 2025, 14:46

Version: 1.0.0 Draft Last Updated: December 19, 2025 Status: Pre-Launch Planning

Executive Summary

ZENCOIN is the hard currency of the Zenpower ecosystem, designed around one question:

"What if being kind was the optimal strategy?"

Unlike traditional tokens that reward speculation, ZENCOIN rewards contribution, creativity, and kindness through a novel "Proof of Zen" mechanism.

The Dual Currency System

ZEN$ (Soft Currency)

  • Supply: Unlimited (inflationary by design)
  • Purpose: Daily transactions, rewards, tipping
  • Earning: Kindness, contribution, daily login
  • Decay: 1% weekly on balances >1000 ZEN$
  • Philosophy: Encourages circulation, discourages hoarding

ZENCOIN (Hard Currency)

  • Supply: 21,000,000 maximum (Bitcoin-inspired cap)
  • Purpose: Governance, staking, major purchases
  • Earning: The Forge (time + effort + ZEN$)
  • Decay: None (store of value)
  • Philosophy: Rewards long-term commitment

Token Distribution

Total Supply: 21,000,000 ZENCOIN

Allocation Amount Percentage Vesting
Community Forge 10,500,000 50% Earned over time via The Forge
DAO Treasury 4,200,000 20% Governed by token holders
Development Fund 3,150,000 15% 4-year linear vesting
Ecosystem Grants 2,100,000 10% Milestone-based release
Liquidity Provision 1,050,000 5% DEX pools, launch liquidity

No Pre-Mine Guarantee

Per the Founding Principles:

  • Zero tokens minted before public availability
  • No insider allocation - team earns through The Forge like everyone
  • Prophet wallet starts at 0 ZENCOIN

The Forge Mechanism

ZENCOIN cannot be purchased directly. It must be forged through:

ZEN$ + Time + Effort = ZENCOIN

Forge Paths

Path ZEN$ Required Time Required Effort Type Rate
Labor 100 ZEN$ 30 days Daily tasks 1 ZENCOIN
Creation 200 ZEN$ 14 days Create content 2 ZENCOIN
Teaching 150 ZEN$ 21 days Help others 1.5 ZENCOIN
Governance 250 ZEN$ 7 days Vote/propose 3 ZENCOIN
Kindness 50 ZEN$ 60 days Acts of kindness 0.5 ZENCOIN

Forge Mechanics

  1. User commits ZEN$ to a Forge Path
  2. ZEN$ is burned (removed from circulation)
  3. User completes effort requirements over time period
  4. ZENCOIN is minted upon completion
  5. Incomplete forges return ZEN$ minus 10% fee

Proof of Zen (PoZ)

Traditional blockchains use Proof of Work (computation) or Proof of Stake (capital). Zenpower uses Proof of Zen (contribution).

PoZ Actions (earn ZEN$)

Action Reward Cooldown
Daily login 10 ZEN$ 24h
Help another user 5-50 ZEN$ Per event
Create content 10-100 ZEN$ Per creation
Report accurate bug 50 ZEN$ Per bug
Complete quest Variable Per quest
Teach skill 25 ZEN$ Per session
Gift to sanctuary 10 ZEN$ Per gift

Anti-Sybil Measures

  • Wallet authentication (SIWE)
  • Activity history analysis
  • Community reporting
  • Rate limiting
  • Reputation scoring

Economic Model

Inflation Control (ZEN$)

ZEN$ Minted = User Actions × Reward Rate
ZEN$ Burned = Forge Consumption + Decay + Fees

Target: Net neutral to slightly deflationary

Deflation Control (ZENCOIN)

  • Hard cap of 21M ensures scarcity
  • Forge mechanism controls emission rate
  • No burning of ZENCOIN (preserve holder value)

The 20-Year Test

Every economic decision must pass:

"Would this feel fair to someone joining in year 20?"

This means:

  • No early-adopter permanent advantages
  • Forge paths remain accessible
  • Value accrues to contribution, not timing

Governance

DAO Structure

┌─────────────────────────────────────────┐
│           ZENCOIN Holders               │
│         (1 token = 1 vote)              │
└────────────────┬────────────────────────┘
                 │
       ┌─────────┴─────────┐
       ▼                   ▼
┌──────────────┐    ┌──────────────┐
│   Governor   │    │  Ethics Board │
│   Contract   │    │   (5 seats)   │
└──────┬───────┘    └───────┬──────┘
       │                    │
       ▼                    ▼
┌──────────────┐    ┌──────────────┐
│   Timelock   │    │   Veto Power │
│   (48 hours) │    │ (20-Year Test│
└──────┬───────┘    │  violations) │
       │            └──────────────┘
       ▼
┌──────────────┐
│   Treasury   │
│   Multi-sig  │
└──────────────┘

Voting Parameters

Parameter Value Rationale
Proposal threshold 10,000 ZENCOIN Prevents spam
Quorum 4% of supply Ensures broad participation
Voting period 7 days Time for deliberation
Timelock delay 48 hours Time to exit if disagreement
Vote delegation Enabled Passive holders can participate

Ethics Board

  • 5 members elected annually
  • Can veto proposals violating Founding Principles
  • Cannot propose, only reject
  • Compensation: 1000 ZENCOIN/year

Token Utility

Within Zenpower

Utility Description
Governance Vote on proposals, elect Ethics Board
Staking Earn ZEN$ rewards, boost multipliers
Tipping Send to creators, helpers
Marketplace Premium content, services
Sanctuary Donations Support mental health services

External Utility

Utility Description
DEX Trading Uniswap/SushiSwap liquidity
NFT Purchases Gallery acquisitions
Cross-chain Bridge to other L2s (future)

Security Measures

Smart Contract Security

  • OpenZeppelin base contracts
  • Multiple independent audits
  • Bug bounty program (up to 100,000 ZENCOIN)
  • Formal verification of critical paths

Treasury Security

  • 3-of-5 multi-sig for treasury
  • 48-hour timelock on all withdrawals
  • Maximum single withdrawal: 5% of treasury
  • Emergency pause function (Ethics Board)

Launch Phases

Phase 0: Genesis (Current)

  • ZEN$ system operational (off-chain)
  • 108 registered users
  • Community building

Phase 1: Token Generation Event (TGE)

  • ZENCOIN smart contract deployment
  • Initial liquidity provision
  • Forge activation

Phase 2: DAO Activation

  • Governor contract deployment
  • First governance proposal
  • Ethics Board election

Phase 3: Full Economy

  • Cross-chain bridges
  • Advanced Forge paths
  • Marketplace launch

Compliance Considerations

Utility Token Classification

ZENCOIN is designed as a utility token:

  • Primary purpose is ecosystem participation
  • No profit-sharing or dividend rights
  • No equity or ownership claims
  • Governance rights only within Zenpower

Jurisdictional Notes

  • DAO LLC formation (Wyoming/Marshall Islands)
  • KYC/AML for fiat on-ramps only
  • Geographic restrictions as required

Risk Factors

Risk Mitigation
Smart contract bugs Multiple audits, bug bounty
Low adoption Focus on utility before speculation
Regulatory change Utility-first design, DAO structure
Whale accumulation Forge limits, no pre-mine
Economic attack Rate limiting, Ethics Board veto

Appendix: Economic Simulations

10-Year Projection

Year Circulating ZENCOIN % of Max Est. Users
1 500,000 2.4% 10,000
2 1,500,000 7.1% 50,000
3 3,000,000 14.3% 150,000
5 7,000,000 33.3% 500,000
10 15,000,000 71.4% 2,000,000
20 21,000,000 100% 10,000,000

ZEN$/ZENCOIN Exchange Rate

  • Not fixed by protocol
  • Market-determined via Forge demand
  • Historical anchor: ~100 ZEN$ per ZENCOIN

"In a system where you could exploit others and face no punishment, choosing not to is the purest form of ethics."

— Zenpower Founding Principles