LayerZero Launches ZRO Token Amid “Airdrop” Controversy

LayerZero, a cross-chain interoperability protocol, has made waves in the crypto world with the launch of its native token, ZRO. The event, which took place on June 20, 2024, has sparked both excitement and debate within the community.

The ZRO token launch came with a unique twist. Instead of a traditional airdrop, LayerZero introduced a “Proof-of-Donation” mechanism. This new approach requires users to donate $0.10 in USDC, USDT, or ETH for each ZRO token they claim. The donations go to Protocol Guild, a group supporting Ethereum developers.

Today LayerZero is introducing a new claiming mechanism called Proof-of-Donation, which will result in ~$18.5 million donated to @ProtocolGuild, a collective funding mechanism for Ethereum developers.

Protocol Guild and Ethereum’s core developers have been fundamental to… pic.twitter.com/YPN7wzsqbJ

— LayerZero Foundation (@LayerZero_Fndn) June 20, 2024

This move has stirred up mixed feelings. Some see it as a clever way to support the wider crypto ecosystem. Others view it as a hidden tax or a departure from the spirit of airdrops. Bryan Pellegrino, LayerZero’s co-founder, defended the decision. He stressed that claiming tokens is optional and not an entitlement.

There is no forced donation, if you don’t want to donate… simply don’t claim. This is not something you own, it’s something being offered.

— Bryan Pellegrino (臭企鹅) (@PrimordialAA) June 20, 2024

The launch had a significant impact on the market. ZRO’s price saw quick changes in its first hours of trading. It jumped 15% within 20 minutes, then fell 22% in the next two hours. This roller coaster reflects the high interest and uncertainty surrounding the token.

Arbitrum Records Massive Revenue Spike from LayerZero Token Launch

Arbitrum, an Ethereum Layer 2 network, felt a major boost from the ZRO launch. As the coordination chain for claims, Arbitrum saw its daily revenue skyrocket to $3.4 million. This was a massive jump from just $20,000 the day before. The surge in activity also led to higher gas fees on Arbitrum, though they quickly returned to normal.

LayerZero’s approach aims to solve common airdrop problems. These include token dumping, airdrop farming, and Sybil attacks. By asking for donations, they hope to attract users who truly value the project.

The ZRO token is now trading on various exchanges. Its current price is around $3.15, with a market cap of $796 million. The total supply of ZRO tokens is 1 billion, with 85 million (8.5%) available in this initial distribution.

This launch highlights ongoing challenges in token distribution. Projects are seeking new ways to ensure fair allocation and long-term engagement. LayerZero’s method could set a trend for future token launches.

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