LayerZero’s ZRO Token Airdrop Receives Backlash For ‘Proof-Of-Donation’ Mechanism
June 20 2024 - 10:00PM
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This week, another airdrop controversy has sent the crypto
community into havoc. Omnichain interoperability protocol LayerZero
recently announced its ZRO Token launch alongside an Airdrop for
its community. Related Reading: Trump-Inspired Memecoins Crash 30%
After Rumors Of Trump’s Official Token Launch However, investors
were shocked when the protocol announced the new
‘Proof-of-Donation’ mechanism. The token’s price has dropped over
20% after launching. LayerZero Faces Backlash For Token
Airdrop On June 14, the LayerZero Foundation took X to tease
an upcoming airdrop. That day, Bryan Pellegrino, the co-founder and
CEO of LayerZero Labs, shared the key details of the airdrop. The
CEO revealed a 1 billion ZRO tokens supply and the community would
directly receive 23.8% of them. He explained that 8.5% of the
community-allocated tokens would be distributed on the first day,
while the rest would be given throughout the following 36 months.
In May, the protocol announced its anti-Sybil measures for the
upcoming token distribution. The measures include a self-reporting
system for Sybil accounts, which offered 15% of the intended
allocation to the addresses that report itself. Additionally,
LayerZero created a bounty hunter program. Despite this, the
protocol received some backlash for its distribution. Some users
believe an 8.5% distribution on the first day was too low. Others
felt like their allocated tokens didn’t match their transaction
volume. An x user shared he received 39.28 ZRO despite being among
the top 0.13% LazerZero users. As a result, many compared the ZRO
airdrop to zkSync’s one. Last week, the crypto community
slammed Ethereum’s Zero-Knowledge Layer-2 scaling solution zkSync
ahead of its ZK token airdrop. At the time, investors expressed
frustration with the token allocation and lack of anti-Sybil
filtering. From Hero To ZRO? Despite the comparison to
zkSync, it wasn’t until Thursday that the backlash intensified.
Before the airdrop, LayerZero Foundation announced its new claiming
mechanism, ‘ Proof-of-Donation.’ Per the post, users must donate
$0.1 in USDC, USDT, or ETH per token to claim their ZRO allocation.
The donations will go directly to the Protocol Guild, a collective
funding mechanism for Ethereum developers. LayerZero Foundation
estimated that the new mechanism will generate up to $18.5 million
in donations. Additionally, it offered to match all donations up to
$10 million. The protocol’s community quickly expressed their
disagreement with the news. One user called it a “Pay to
Claim” airdrop, stating that “if there was a ‘milking your users’
Olympics, LayerZero would take the gold.” Another user found the
timing disingenuous, as the announcement was made soon before the
airdrop. Many investors saw the “mandatory” nature of the donation
as a slap in the face. Moreover, some consider the new claiming
mechanism a “tax” instead of a donation. Related Reading: Curve
(CRV) Bounces 40% From All-Time Low As Whales Go On Shopping Spree
Pellegrino addressed the criticism of X, stating that nobody is
forced to donate. He added that users are not entitled to the
tokens: If you don’t want to donate… simply don’t claim. This is
not something you own, it’s something being offered. As of this
writing, ZRO has gone from $4.79 to $3.39, representing a 22% drop
in four hours. Featured Image from Unsplash.com, Chart from
TradingView.com
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