What Is Zenlink, Who Is Behind It, And Why...

Unbiased Notes Of Dotsama Ecosystem

By Seppy

General Info

Zenlink, a cross-chain DEX protocol on the Polkadot ecosystem. It has a deflationary token system while the social awareness is pretty low and both TVL and mcap are so small that we could say its the definition of medium risk- High reward. Based in China, they have two Web3 grants, Github activity looks decent, and they have been audited by Peckshield and Slowmist. Their mission is clear:

“To become the DEX composable hub of Polkadot. Ultimate, open and universal cross-chain DEX protocol based on Substrate.”

Zen-link: Zen is a school of Mahayana Buddhism that originated in China during the Tang dynasty, known as the Chan School (Chánzong 禪宗), and later developed into various schools. Link means to link with other DEXs

First, some general info on the project:

Token: ZLK
Trading: yes (Gate.io and Zenlink DEX)
Total supply: 100.000.000 ZLK
Current supply: 30.421.907 ZLK
Price: $0.085
Parachain Lease period: It is NOT a parachain
Networks support: Bifrost, Moonriver, Moonbeam, and soon Astar.
TVL: ~$9 mil
Mcap: ~$2.5 mil
Fully Dilluted: ~8.5 mil
Inflation: No
Buy back and Burn: yes
Burned amount atm: ~2mil ZLK
Pools: Support farming pools: 37, xcKSM, xcRMRK, xcKINT, GLMR, MOVR, ETH, WBTC, USDC, DAI, BUSD, BNB, ZLK, KSM, aUSD, KAR, BNC, vsKSM, vETH, etc. can participate, APR 10~1500%
Holders : ~50.000
Top pool: vETH/ETH
Github: (DEX Module)
Twitter: ~30k followers
Audited by Peckshield and Slowmist
Web 3 Grants:

Prototype of a cross-chain DEX module for the Polkadot network here
Develop WASM smart contract implementation

History

- July 2020, the Zenlink project was established, and the initial team was formed.

- November 2020, the team completed the internal testing of Zenlink DEX Protocol v0.1 and the development of V0.2.

- January-February 2021, Zenlink established partnerships with Bifrost, Astar (formerly Plasm), Phala, Darwinia, and other parachain projects.

- March 2021, Zenlink was successfully connected to Rococo, and integration testing of the Zenlink DEX Protocol on Rococo was conducted.

- April 2021, Zenlink completed its 1st public beta test and developed the Zenlink NFT launch plan.

- May 2021, the team completed the development of the Zenlink DEX Protocol v0.4 version and started the development of Zenlink SlotVault (PLO support application), and the Zenlink DAO bootstrap governance program was launched.

- June 2021, the team completed a preliminary version of the Zenlink Smart Order Routing design.

- July-August 2021, Zenlink started integration-related joint testing with Shiden and Bifrost and launched Zenlink SlotVault to support parachain auctions and update Roadmap announced to go live on the Kusama network (integration to Moonriver / Bifrost / Shiden).

- September 2021, Zenlink finished its Series A funding round led by Alameda Research and followed by IOSG Ventures, Hashkey Capital, OKEx Blockdream Ventures, Hypersphere Ventures, SNZ Holding, SevenX Ventures, DFG, TRG Capital, PAKA, and launched its 2nd beta testing.

- October 2021, Zenlink released their Tokenomics and launch process.

The Zenlink Whitepaper can be found here

What Is Zenlink?

Zenlink is committed to building a new generation cross-chain DEX network. By integrating the ZLK DEX Module, Zenlink can enable parachains to quickly access DEX capabilities and share liquidity with other parachains. Meanwhile, Zenlink’s DEX aggregator can link all DEX Dapps on Polkadot. Users can not only complete the exchange easily and quickly, but also enjoy a low-slippage experience.

Zenlink’s DEX Protocol includes Module, WASM, and EVM implementations, which are flexible and adaptable, allowing for customizable compositions and interoperability with different DeFi modules.

In the image above, we can see the two main parts that Zenlink consists of:

Zenlink DEX Protocol and the DEX dApp building on top of it. For the DEX Protocol, they built a general and pluggable DEX Module that allows different parachains to have DEX capabilities simply with one-click. Meanwhile, they also create an efficient DEX-specific cross-chain protocol to share the liquidity of DEX Modules on different parachains.

Zenlink DEX functionalities can be imported into parachains in the following three ways.

Integrated with parachains as a substrate module.
Deployed to the Wasm Contract module on parachains.
Deployed to the EVM Contract module on parachains.

Zenlink DEX dApp is a front-end interactive product based on the DEX Protocol to facilitate users to use their cross-chain DEX smoothly and easily. The app UX/UI is very good, fairly easy to use while providing all the basic information an investor should have in front of them. All the details on how to use their Dapp is here

Key notes:

Beta Limit orders
X Transfer, cross-chain transfers of tokens.
Bootstrap
Bridges
Hybrid AMM
Aggregator. Not yet implemented.

“Plug and Play” Zenlink DEX Module Not A Parachain

Zenlink is NOT a parachain, not having conducted crowdloan to get a lease spot on Polkadot, but they did test on Rococo testnet.

Since many applications are expected to be built on different parachains, this also means that liquidity will be fragmented on different parachains. Zenlink will step in at this point and act as the DEX hub for liquidity. By integrating the Zenlink DEX Module, Zenlink can enable parachains to share liquidity with other parachains and converge the isolated liquidity into a huge liquidity network in the end.

This also means that Zenlink DEX network will be able to capture the liquidity of the Polkadot ecosystem to the maximum extent so that users can not only complete the exchange easily and quickly but also enjoy a low slippage transaction experience without worrying about which parachain they are trading on.

Each parachain on Polkadot is essentially a completely independent collection of freely programmable Runtime Modules, which makes it easy for all parachains to integrate the Substrate-based Zenlink DEX Module. So what Zenlink needs to do is combine the Module in multiple parachains together to establish a decentralized cross-chain DEX network.

WASM And EVM

Writing WASM smart contracts with Ink! pallet is an effective way to deploy features. The benefit of this method is that people compile and deploy the smart contract to the parachain ink! module, rather than modifying the source code of the parachain.

The WASM smart contract consists of two parts: Exchange and Factory.

The Exchange contract is the core of the ZenLink Dex Protocol. It implements the following interfaces:

Initializing token trading pairs.
Token swaps.
Adding/extracting liquidity.
Defining the liquidity constant function used throughout the protocol.

The Factory contract can be used to create exchange contracts for any ERC20 token that does not already have one. It also functions as a registry of ERC20 tokens that have been added to the system, and the exchange with which they are associated.

Zenlink aims to help parachains in the ecosystem by offering them a simple way to implement DEX functionality. So, writing EVM smart contracts with an EVM pallet is an effective way to deploy features. The benefit of this method is that people compile and deploy the smart contract to the parachain's EVM pallet, rather than modify the source code of the parachain.

Worth noticing that Zenlink already supports Bifrost network, Moonriver, and Moonbeam while, Astar support is coming very soon.

Why $ZLK?

The economic model on which the ZLK token is built is rarely seen in Dotsama projects for various reasons. Firstly, ZLK is a deflationary token that lives both in Kusama and Polkadot and the distribution is 40 M for Kusama network and 60 M for Polkadot network. Max supply 100 M ( in reality lower atm)

40,000,000 ZLK issued on the Kusama network and 60,000,000 ZLK issued on the Polkadot network, which will follow a non-discriminatory release rule

Buy back and burn mechanisms have been implemented, and so far we got 3 burns:

2021 Q4 0.2% burn

2022 Q1 0.5% burn

2022 Q2 1.2% burn

As you can see, there's an exponential growth of burning and if this continues, in theory, the value of the token will rise. Unfortunately, the private/seed sale price of the token is not publicly available but with this low of a mcap, we shouldn’t be far from those prices. There was no public sales or crowdloan.

Token Utility:

Trading Mining. Community is incentivized to trade and earn ZLK as rewards. More info here
Governance
Active User Incentives. Users receive ZLK rewards by actively participating in activities on Zenlink. For example, utilising the platform, providing liquidity, etc

The TVL sits at around $8-9 mil which is very very low, and the team must find ways to grow it. This is very crucial in order to capture market share. Additionally most DEX suffer from investors grabbing big APY’s, farm and get out to the next Dapp/farm.

Who Is Behind Zenlink? - Backers

Zenlink raised $1.1mil in 2020 from angel investors like Hashkey, Continue Capital, IOSG Ventures, D1 Ventures and Youbi Capital.

In 2021 an undisclosed total amount was funded by Alameda Research and followed by IOSG Ventures, Hashkey Capital, OKEx Blockdream Ventures, Hypersphere Ventures, SNZ Holding, SevenX Ventures, DFG, TRG Capital, PAKA. The angel round investors HashKey Capital and IOSG Ventures continued to invest in this round. Here;s the full article.

Team is mostly anon except the CEO and co-founder Leo Guo, who worked at imToken wallet as the other co-founder. In general, having a team open to the public is pretty important due to reputational loss if something goes wrong, and also we can learn about the team’s motivation! I wish we had all the information to evaluate their past and what they were working on. There’s always a risk a team will give up

In any way, product is key here; the only way for Zenlink team to succeed is to build, build, build, and deliver.

The Zenlink team is primarily based in Singapore and China, and all team members have many years of experience in the blockchain industry. The core members come from imToken and are also early supporters of Polkadot. The team is currently expanding with members from the US, Australia, and Europe to create an international team to expand the global community reach.

You can see our co-founder Leo Guo in many occasions, AMA and various online and offline conferences. Due to stringent regulations in China, we did not disclose more information about our team members, which could have put them in a disadvantageous position.

Roadmap And Partnerships

Decent number of partnerships including Chainlink, Bifrost, Astar, Phala, Darwinia among others.

Regarding their roadmap, they are slightly behind, but they keep delivering, like SDK v1, hybrid AMM and Astar integration soon. Key points that are to be expected this year include Governance, DAO NFT, DeFi modules, Mobile DEX Dapp and more parachains integration.

Latest News

The following list includes some recent Zenlink news (May-June 2022):

Zenlink SDK is release. Developers and professional market makers can build their own trading systems with the full functionality of the Zenlink SDK.
The development of Stable AMM (Substrate version) is progressing steadily.
The team is in the process of deploying the DEX family of contracts on the Astar network and will officially launch on the Astar network soon. (26th July 2022)
The team has made adjustments to the current multi-chain integration model of the Zenlink DEX DApp.
X-Transfer supports the cross-chain transfer of DOT from Polkadot relay chain to Moonbeam with access and uses as xcDOT on Moonbeam, GLMR/xcDOT farming activities are ongoing.
Posted a video tutorial on “How to Supply xcKSM and MOVR to Zenlink”: https://www.youtube.com/watch?v=oMWPcqDMDFA
X-Transfer has added cross-chain asset transfer support for ACA (xcACA), aUSD (xcAUSD) between the Acala network and Moonbeam network, and KMA (xcKMA) between the Calamari network and Moonriver network.
Listing $vKSM/KSM on the Bifrost network and initiating LP Farming, which allows users to stake KSM on the Bifrost network to mint vKSM to earn approximately 22% of the base APY and then participate in vKSM/KSM LP Farming on Zenlink to earn $BNC + $ZLK rewards.
SubBridge, powered by the Phala network, has been launched and now supports cross-chain transfers of ZLK between the Bifrost network and Moonriver network, as well as ZLK, BNC, and PHA tokens between the Bifrost network and Khala network.

Here, you can find the proposal for Astar: Grant ASTR from Astar Treasury to Zenlink as a Part of the Incentive for Liquidity Program

QnA With The Team

I managed to have some questions answered regarding Zenlink from team member;

Hey Lu1, nice to have you answer some questions about zenlink!

Tell us some information about the team. Who is the founder?

Leo has been working in the blockchain industry for over 5 years and joined imToken in 2017, working on marketing, operations and data analysis.

As you know, imToken was one of the first Ethereum wallets, and due to Leo's work experience he is quite familiar with Ethereum and fully aware of its limitations. So when Gavin proposed the Polkadot protocol, Leo and some of the core members of our current team thought that this was the blockchain of the future. After doing some research, they got together to discuss what they could do with Polkadot and then decided to build Zenlink. We aim to make it the next generation cross-chain DEX protocol that fits perfectly into the Polkadot architecture.

As far as we know, Astar support is pretty close. Can we expect a growth in TVL and traffic? Since market conditions are not the best.

Yes, market conditions are not good right now, but our building process is not entirely dependent on market conditions, and the Zenlink team is committed to providing the best products and services to the community no matter it's a bull market or a bear market.

We believe that in two years, the Dotsama ecosystem will be better than it is now, and Zenlink as well, it will be one of the most popular DEXs in the Dotsama ecosystem. The Dotsama ecosystem is still in the early stages and we can see that many developers are working hard to build this ecosystem, more and more new projects are built on the substrate. We believe all of this will one day explode the ecosystem.

For us, the Zenlink DEX protocol is a perfect fit for Polkadot's multi-chain architecture, and it is a unique product form and protocol implementation in the Dotsama ecosystem, and we believe time will answer that.

Zenlink is coming to Astar on July 26, which will certainly lead to growth in TVL, but it is not expected to grow as much as it did in the bull market. We are looking forward to working with other projects in the Astar ecosystem to provide better products and services for users.

Are more parachains integrations are being worked? And is this directly connected with new tokenomics that are going to be released?

Currently, many parachains are seeking to integrate with the Zenlink DEX protocol which is part of our multi-chain deployment plan, but we also need to consider the energy of our team. After integration with Astar, we will focus more on cross-chain swap and liquidity sharing implementation.

While Tokenomics is designed with many factors in mind, it is designed to attract loyal liquidity and create positive feedback on ZLK prices.

Zenlink level of decentralization is on the low side at the moment.Should we expect governance update this year in order for users to participate?

For sure, governance will definitely be rolled out this year and is a very important part of our roadmap that will help transition Zenlink to community control gradually, so please keep an eye out for its release.

BTW, we have almost completed the design of the governance module and have discussed it with some of the parachain teams.

Any last comments for zenlink community?

First of all, we are very grateful for the support of the Zenlink community, without whom Zenlink would not be what it is today, and we will keep building with the community.

Currently, the Zenlink community is not very large, but we believe it is a solid community, and the Zenlink team will be implementing more measures to grow the Zenlink community and the product users, so stay tuned for updates on our social channels.

Conclusion

With XCM’s launch on Polkadot, Zenlink has a bright future ahead. Tokenomics are good, they have several burns,they are very small market cap, and early in social media. Zenlink has not been shilled in CT at all, and so far the team has shown that they can deliver a quality product. On the other hand, the team is mostly anon and TVL is very low while the competition is one of the hardest out there.

Keep your eyes open, as long as we see regular updates on ZenLink’s Dapp, growing community, and higher TVL, this can 100x easily.

If you like the content, here is my Twitter handle@andreas_seppy

What Is Zenlink, Who Is Behind It, And Why $ZLK