Cryptocurrencies

Mining Protocol’s new LayerZero (ZRO) token has been abandoned

The cross-chain interoperability protocol’s new token LayerZero (ZRO) fell 17% a day after its launch as its founder defended the controversial donation standard to claim tokens, which some compared to a “tax.”

Some people disagree and believe that the mechanism could be the right step to resolve the issues that have affected recent token airdrops.

Upon its launch on June 20, ZRO rose 15.15% to $4.71 in just 20 minutes before dropping 22% in two hours, a trend often seen in token drops where applicants abandon tokens newly acquired.

In this case, the launch of ZRO caused its own controversy. LayerZero did this so that users who want to claim tokens will be asked to donate a small amount of money for each ZRO token.

Source: Layer Zero Foundation

“To claim ZRO, users must donate $0.10 in native USDC, USDT, or ETH per ZRO. “This small donation goes directly to the Protocol Guild,” LayerZero wrote in a June 20 post.

LayerZero expects these donations to result in a donation of approximately $18.5 million to the Protocol Guild, a crowdfunding mechanism for Ethereum (ETH) developers.

The move sparked a wave of backlash from the cryptocurrency community, with users claiming that having to pay a “tax” changes the nature of the “airdrop” into something more like an initial offering of coins (ICO).

Users flocked to LayerZero’s post with comments like “Is this a joke” and “Why not pay for this.”

LayerZero reiterates that ZRO launch is ‘not an airdrop’

LayerZero insisted the latest launch is “not an airdrop.”

In a June 20 statement, LayerZero said airdrops no longer contribute to the “objectives of equitable distribution, community building, and protocol validity, for which airdrops were originally introduced.”

This is primarily because token recipients have “little to no” stake in the long-term success of the project, due to the rise of airdrop farming and Sybil entities, referring to entities that create and use a large number of wallets for airdrop farming. .

LayerZero co-founder Brian Pellegrino apparently spent the day defending the token’s launch, reiterating that no one is entitled to the tokens and that if users don’t want to donate, they should refrain from donating them. claim.

“There is no forced donation, if you don’t want to donate…just don’t ask.” “It’s not something you have, it’s something that’s given,” he said.

ZRO briefly rose to a high of $4.7 before falling below $3.50. Source: CoinMarketCap

“Such a surreal day, as stressful as I have ever been in my entire life. Fall asleep for an unknown amount of time with notifications turned off. Pellegrino added: Good luck to everyone.

about: Tensions in the DeFi industry exposed by LayerZero’s anti-Sybil strategy

Meanwhile, some in the cryptocurrency community agree that ZRO’s donation prompt mechanism could be a step in the right direction for future airdrops.

“People complaining about donating during the LayerZero drop are idiots,” Adam Cochran said in a June 20 post.

“It’s a good way to increase the cost of Sibil’s operations, making it less vulnerable in the future,” he explained.

Last week, ZkSync noted that during its June 17 Airdrop launch, some Sybil wallets were able to bypass the system, despite using Sybil’s “explicit” detection as well as the “unique airdrop design” to ensure the largest number of organic users.

“While people are complaining about the ZRO airdrop process, I want to give them credit because the UI/UX complaint page is very clean and the smoothest I’ve ever seen. “It’s like Spotify Wrapped,” added Irys developer Conor King.

ZRO is currently trading at $3.35, down 17% in the past 24 hours, according to CoinMarketCap data.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.

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