LayerZero (ZRO), a newly launched token from cross-chain interoperability protocol LayerZero, has fallen 17% since launch amid controversy over donation criteria for token claims. Some have compared it to a ‘tax’.
Some disagree with these criticisms and believe this mechanism could be a good step toward solving the problems that have plagued recent token airdrops.
At launch on June 20, ZRO rose 15.15% to $4.71 in just 20 minutes before falling 22% in two hours. This is a common pattern seen in token airdrops, when claimants discard their newly acquired tokens.
In this case, the launch of ZRO caused its own unique controversy. LayerZero has made it so that users who want to claim tokens must donate a small amount of money per ZRO token.
“To claim ZRO, users must donate $0.10 per ZRO in USDC, USDT, or native ETH. This small donation goes directly to the Protocol Guild.” LayerZero wrote in an X post on June 20:
LayerZero estimates that this donation will result in approximately $18.5 million being donated to the Protocol Guild, a collective funding mechanism for Ethereum developers.
The move was met with a wave of backlash in the cryptocurrency community, with users claiming it would require them to pay a “tax”, changing the nature of the “airdrop” to something akin to an initial coin offering (ICO).
Users ask questions such as “Is this a joke?” and “Why don’t you pay for it?” People flocked to LayerZero’s post with questions and comments such as:
LayerZero reaffirmed that the ZRO launch is “not an airdrop.”
LayerZero was adamant that its latest launch was “not an airdrop.”
In a June 20 statement, LayerZero claimed that the airdrop no longer serves the “equitable distribution, community building, and protocol health goals that the airdrop was initially introduced to address.”
This is mainly due to token recipients having “little or no interest” in the long-term success of the project, increased airdrop farming, and Sybil institutions (meaning institutions that create and use large numbers of wallets to farm airdrops).
LayerZero co-founder Bryan Pellegrino seemed to have spent the day defending the token launch, reiterating that no one is entitled to the tokens and that users should refrain from claiming them if they do not wish to donate.
“There is no forced donation. If you don’t want to donate… don’t charge. “This is something you are given, not something you own,” he said.
“It was such a surreal day, I was more exhausted than I had ever been in my life. You will sleep for an unknown amount of time with notifications turned off. Thank God everyone,” Pellegrino added.
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Meanwhile, some members of the cryptocurrency community agree that ZRO’s donation claim mechanism could be a step in the right direction for future airdrops.
“People whining about donating to the LayerZero airdrop are idiots,” Adam Cochran wrote in a June 20 post, arguing that donations would be used to support the “larger ecosystem” and that “the basic cost of the LayerZero airdrop is worth it.” “It’s a great way to set it up.” token.”
“This is a good way to reduce the likelihood of future Sybils by adding to Sybil operating costs,” he explained.
ZkSync recently reported that during the June 17 airdrop launch, some Sybil wallets were able to bypass the system despite using “explicit” Sybil detection and a “unique airdrop design” to ensure the highest number of organic users. pointed out.
“While people are talking nonsense about the ZRO airdrop, I want to acknowledge that the claims page UI/UX is very clean and the smoothest I have ever seen. It’s like Spotify Wrapped,” added Irys developer Connor King.
According to CoinMarketCap data, ZRO is currently trading at $3.35, down 17% in the last 24 hours.
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This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.