Bitcoin scaling layer Citrea rolls out CTR token and dual treasury model

Bitcoin Layer 2 Citrea has introduced a governance token, CTR, coming on the heels of the ZK-powered rollup’s mainnet event in January.

Pitched as a “coordination asset,” CTR will enable users and apps to govern how capital and incentives are distributed in the ecosystem. This will work through the introduction of the Citrea Governance Treasury and a vote-escrow staking model.

Users who stake their CTR tokens will receive xCTR, a non-transferable token that grants voting power over the treasury and network at large.

“With this mechanism, Citrea gives direct control to its users and applications over distributing incentives,” Citrea Foundation Directr Orkun Kilic told The Block via email. “By voting emissions toward specific pools, xCTR voters trigger a flywheel: value created in the Bitcoin economy flows back to the participants whose actions and curation made it possible.”

CTR will be capped at a fixed supply of 10 billion, with 60% of the tokens “allocated for the community” through direct transfers, incentives programs, and the treasury system. This includes 12% for initial claims distributed during a Genesis Airdrop, 25.16% for a xCTR-governed treasury, and 22.83% set aside for ecosystem growth.

The remaining 40% includes 19.35% for investors and 20.66% for early contributors, both subject to a four-year lock-up with a one-year cliff.

Citrea is also introducing a dual treasury system, with the Citrea Governance Treasury directly controlled by xCTR holders, who will vote on liquidity incentives, council and infrastructure providers, and payments. The separate Citrea Foundation Treasury will handle R&D, ecosystem grants, operations, and strategic initiatives.

“If the Foundation wants to run such a program, it must request it from Governance with clear goals and KPIs,” a Citrea blog noted. 

Citrea is also modifying its vote-escrow staking model through the so-called gauge system, described as a “self-optimizing mechanism that lets the market dictate emissions.” Stakers can vote on pools of capital that will incentivize application development with the “exact structure, parameters, and budget … subject to governance discussion and activation.”

“The set of eligible applications can expand further and dynamically through a vetting committee that Governance may choose to establish,” Citrea said, noting the gauge system can “not only to reward specific applications, but to incentivize different user behaviors, such as consumers of neobanks on Citrea.”

Notably, only xCTR used for voting will earn liquidity emissions on the pools they vote for, while staked CTR that is inactive will only earn unstaking penalty fees, the blog noted. Unstaking happens over a 90-day window, with “instant exits” incurring a 50% flat penalty fee, and the remaining seeing a variable decaying penalty from 50% to 0%.

These penalty fees will be distributed pro rata to the remaining stakers, “directly rewarding those who stay aligned,” the blog notes.

“Ultimately with CTR, Citrea will get closer to a decentralized, community-governed network where xCTR holders have a say in the network’s evolution, dictate emissions, align incentives, and ensure that value created in the Bitcoin economy flows back to its participants,” Kilic said.

Citrea uses zero-knowledge proofs to power smart contracts and EVM-compatible apps while settling back to Bitcoin for security. The protocol’s core developer, Chainway Labs, also released a trust-minimized BTC bridge built on BitVM, called Clementine, and native, GENIUS Act-compliant ctUSD stablecoin, issued by MoonPay.

Chainway raised a $14 million Series A funding round in 2024, led by Peter Thiel’s Founders Fund with participation from Galaxy, Delphi Digital, and Maven 11, among others, as well as individual investors like Erik Voorhees, Balaji Srinivasan, Nikil Viswanathan, Mert Mumtaz, and Jameson Lopp.

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