I agree! USB power (5V) won’t be enough since the DC input requires at least 6V. If you’re set on using the DC port, you’d need a step-up converter. Otherwise, adding a USB connector to the wires sounds like the easier option.
@teastain Thank you - I had misunderstood what the Z was for. Because on the ky040 the middle pin is for the "switch" functionality (i.e. pushing down on the encoder) I assumed it was for this. I realise now that I need to treat that as a button and take it off to a different pin, which I know how to do.