TLDR
LayerZero has launched its ZRO token with a unique “Proof-of-Donation” mechanism for claiming tokens.
Users must donate $0.10 in USDC, USDT, or ETH per ZRO token they wish to claim.
The donations will go to Protocol Guild, a funding collective for Ethereum core developers.
LayerZero Foundation will match donations up to $10 million, potentially raising $18.5 million total.
The move has sparked controversy in the crypto community, with mixed reactions from users and experts.
LayerZero, a cross-chain interoperability protocol, has introduced a novel approach to token distribution with the launch of its ZRO token. In a move that has stirred controversy in the crypto community, LayerZero has implemented a “Proof-of-Donation” mechanism for claiming tokens.
Under this new system, users eligible for the ZRO airdrop must donate $0.10 in USDC, USDT, or native ETH for each ZRO token they wish to claim.
This donation goes directly to Protocol Guild, a non-profit funding collective for Ethereum core researchers and developers. The LayerZero Foundation has pledged to match all donations up to $10 million, potentially generating up to $18.5 million in total contributions.
Today LayerZero is introducing a new claiming mechanism called Proof-of-Donation, which will result in ~$18.5 million donated to @ProtocolGuild, a collective funding mechanism for Ethereum developers.
Protocol Guild and Ethereum's core developers have been fundamental to… pic.twitter.com/YPN7wzsqbJ
— LayerZero Foundation (@LayerZero_Fndn) June 20, 2024
Bryan Pellegrino, CEO of LayerZero Labs, emphasized that this is not a traditional airdrop, stating,
“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.”
The company argues that this approach aims to address issues plaguing recent token airdrops, such as airdrop farming and Sybil attacks.
The crypto community’s reaction has been mixed. Some critics argue that the mandatory donation is effectively a “tax” or a form of ICO, changing the nature of what is typically considered an airdrop. Banteg, a core contributor to Yearn Finance, commented that “mandatory donations sound more like a glorified ICO.”
However, others in the community see potential benefits in this new approach. Adam Cochran, a prominent crypto analyst, defended the mechanism, stating it’s “a good way to set a base cost value for a token” and could deter Sybil operations in future airdrops.
The ZRO token launch on June 20 saw significant price volatility. Within 20 minutes of launch, ZRO surged 15.15% to $4.71 before tumbling 22% in the following two hours. This pattern is often observed in token airdrops as claimants quickly sell their newly acquired tokens.
LayerZero has allocated 85 million ZRO tokens, 8.5% of the total 1 billion supply, for eligible participants to claim. The claiming period is open from June 20 to September 20, 2024. The remaining token supply is distributed among strategic partners, core contributors, and reserved for future distribution programs and ecosystem growth.
The post Donation or Tax? Reaction to LayerZero’s ZRO Token Launch appeared first on Blockonomi.
