- LayerZero’s ZRO token airdrop went live on Thursday, with a claiming mechanism called Proof of Donation.
- The team requires 10 cents in USDC, USDT or Ether per ZRO token with the aim to weed out manipulative Sybil entities.
- ZRO wiped out 24% of its value in the past 24 hours.
- Crypto traders slammed LayerZero for the donation requirement post using a “Sybil detection” mechanism prior to the airdrop.
LayerZero’s newly-launched token ZRO has noted a double-digit price decline one day after its launch. The drop can be attributed to a new mechanism deployed for claiming airdropped tokens, which requires eligible addresses to pay $0.10 in USD Coin (USDC), USD Tether (USDT) or Ether to claim the token.
While The LayerZero team said this is effective in weeding out manipulative bots and Sybil entities, this has enraged crypto traders, who broadly seem to agree that ZRO token’s distribution “is not an airdrop.”
LayerZero’s ZRO token airdrop brings controversy
Claims for LayerZero’s token ZRO started on Thursday on one condition. Eligible users need to donate 10 cents in a stablecoin (USDC/USDT) to the Protocol Guild, a collective of Ethereum developers, for each ZRO token they claim.
LayerZero said the Proof of Donation requirement intends to avoid Sybil entities, manipulative bots that farm airdrops. However, the community of crypto investors in X did not take kindly to the new initiative and slammed the firm for claiming that the token distribution via this mechanism is an airdrop.
“Because the token is in exchange for a donation it's technically not an airdrop, and the team didn't call it an airdrop anywhere in their comms…” a trader behind the X handle @dcfgod said.
Polymarket odds for layerzero airdrop crashed to 50% despite the token being out already
— DCF GOD (@dcfgod) June 20, 2024
Because the token is in exchange for a donation it's technically not an airdrop, and the team didn't call it an airdrop anywhere in their comms
in fact they explicitly say "this is not an… pic.twitter.com/ufkPNVj1VM
Not an airdrop comments on ZRO token distribution
LayerZero explained that the innovative method for distributing tokens is aligned with the protocol and its commitment to the future of crypto in the long-term. The foundation said it will match up to $10 million in donations to the Protocol Guild and support Layer 1 developers on Ether.
The fee is being likened to a “tax” and the controversy has resulted in a steep correction in ZRO token price, which is down 23.9% in the past 24 hours, per CoinGecko data.
ZRO suffers steep correction
ZRO price is down to $3.38 at the time of writing. The token is down nearly 30% from its all-time high of $4.79, from less than a day ago. The token’s market capitalization was around $845 million on Friday at the time of writing.
ZRO/USD price chart at GeckoTerminal
It remains to be seen whether ZRO can shrug off the correction and make a comeback to its all-time high of $4.79.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto today: Bitcoin, Ethereum, XRP tests key support, TRON network non-stablecoin activity hits new highs
Bitcoin, Ethereum, and XRP hover around key support levels after registering a steep correction earlier this week. TRON network’s stablecoin activity hit new highs following the release of SunPump. TRON trades at around $0.1500, almost flat on the day.
Bitcoin Weekly Forecast: $50,000 on the horizon if it breaks below key support level
Bitcoin price tests the key support level at $56,000 on Friday, consolidating over a 1% decline this week. If it drops below this support, a continued downtrend is likely for BTC, as suggested by substantial outflows from US spot Bitcoin ETFs, rising institutional selling, and bearish on-chain indicators.
Vitalik Buterin says all Layer-2 token holdings will be donated to charity, won’t sell for profit
Vitalik Buterin, Ethereum co-founder, has not sold Ether since the altcoin’s ICO in 2018. On-chain transfers by Buterin make headlines as ETH holders keep eyes peeled for selling pressure on the altcoin.
WazirX, PenPie and Bo Shen hackers launder $42.7 million in stolen funds through Tornado Cash
Three different hackers responsible for the exploit of crypto assets worth millions of dollars from crypto exchange WazirX, DeFi protocol Penpie, and Founder of Fenbushi Capital Bo Shen are using Tornado Cash to move part of the stolen funds.
Bitcoin: $50,000 on the horizon if it breaks below key support level
Bitcoin (BTC) price tests the key support level at $56,000 on Friday, consolidating over a 1% decline this week. If it drops below this support, a continued downtrend is likely for BTC, as suggested by substantial outflows from US spot Bitcoin ETFs, rising institutional selling, and bearish on-chain indicators.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.