LayerZero’s newly launched token, LayerZero (ZRO), has fallen 17% since its debut, amid controversy over its donation criterion for claiming tokens, which some critics liken to a “tax.”
However, others believe this mechanism could address issues seen in recent token airdrops.
Upon its launch on June 20, ZRO spiked 15.15% to $4.71 within 20 minutes before plunging 22% in two hours, a common pattern in token airdrops as recipients quickly sell off their tokens.
ZRO’s launch included a unique twist: users must donate a small amount per ZRO token to claim them.
“To claim ZRO, users must donate $0.10 in USDC, USDT, or native ETH per ZRO.
This small donation goes directly to the Protocol Guild,”
LayerZero stated in a June 20 X post. LayerZero predicted this would result in around $18.5 million for the Protocol Guild, which funds Ethereum developers.
The donation requirement sparked backlash, with critics arguing it transformed the airdrop into something akin to an initial coin offering (ICO).
Responses to LayerZero’s announcement included comments like “Is this a joke?” and “how about you pay for that.”
LayerZero insists the ZRO launch is “not an airdrop.” In a June 20 statement, the company argued that traditional airdrops no longer achieve their goals of equitable distribution, community building, and protocol health.
This is due to recipients often having “little to no interest” in the project’s long-term success, alongside an increase in airdrop farming and Sybil attacks, where entities create numerous wallets to exploit airdrops.
LayerZero co-founder Bryan Pellegrino defended the launch, emphasizing that no one is entitled to the tokens and advising those unwilling to donate not to claim them.
“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,” he said.
Pellegrino expressed his exhaustion after a busy day defending the launch, stating, “Such an unreal day, as exhausted as I’ve ever been in my entire life.
“Going to sleep for an unknown amount of time with notifications off.
“Godspeed all.”
Some in the crypto community support the donation mechanism.
Adam Cochran stated, “People whining about the donation on LayerZero airdrop are dumb,” arguing it supports a “greater ecosystem” and adds a base cost, deterring Sybil attacks.
ZkSync noted that despite using an explicit Sybil detection system during its June 17 airdrop, some Sybil wallets still bypassed the system.
Connor King, an Irys developer, praised the claim page’s user interface, comparing it to Spotify Wrapped.
ZRO is currently trading at $3.35, down 17% over the last 24 hours, according to CoinMarketCap.
To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.
