LayerZero (ZRO) price down dropsAccording to Coinmarketcap, ZRO is currently trading at USD 2.869473, a 15% drop in the last 24 hours. The price drop comes after LayerZero’s founder, Bryan Pellegrino, announced on X that LayerZero is introducing a new claiming mechanism called Proof-of-Donation. The crypto community is apprehensive about the decision to move, which will lead to high volatility.
Also Read: LayerZero launches Proof-of-Donation mechanism
The newly listed LayerZero token (ZRO) price, associated with the cross-chain interoperability protocol, has fallen by 15% in the last 24 hours. The introduction of proof of donation requirement has sparked debates within the cryptocurrency community, leading to a sharp price decline.
LayerZero experiences high price volatility amid controversy
The omnichain interoperability protocol announced on its X platform that users will be required to donate to the Protocol Guild, a collective funding mechanism for Ethereum developers. The new claiming mechanism, which many compare to an airdrop, will require users to donate $0.10 in USDC, USDT, or ETH per ZRO token when claiming allocation. The foundation added that they intend to raise $18.5 million towards Ethereum developers.
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
After the token’s launch on June 20, ZRO surged by more than 15% in 30 minutes. The token rallied to a high of $4.40, positioning itself above Quant(QNT) and Ethereum Name Service (ENS). The sharp surge was influenced by the strategic listing of the ZRO token on Binance, which provided high visibility and liquidity.
Shortly after, the ZRO token experienced a sharp reversal of 22% as crypto traders quickly sold -off to make a profit.
LayerZero team quickly responded to the airdrop claims by critics stating that the ZRO token launch is not an airdrop. They quickly added that traditional airdrops no longer serve the purpose of community building, equitable distribution, and protocol health that they were intended to solve. LayerZero added that the rise of Sybil entities and airdrop farming affected the industry, resulting in token recipients with no interest in the project’s longevity.
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LayerZero’s co-founder, Bryan Pellegrino, spent much of his day defending the proof of donation. He affirmed that claiming the newly launched ZRO tokens is optional for users and that those dissenting are free to opt out of the program. He added that users could claim their tokens without contributing to the guild.
“There is no forced donation. If you don’t want to donate, simply don’t claim it. This is not something you own, it’s something being offered,”
-Bryan Pellegrino
Pellegrino’s statement comes after the protocol flagged more than 800K Sybil addresses last month as they tried to airdrop farm. The omnichain interoperability protocol also announced an airdrop eligibility checker a day before token claims were launched.
Other members welcome the protocol’s move
While some Crypto community members were apprehensive about the move, others believed it was the right direction for future airdrops.
“People whining about the donation on LayerZero airdrop are dumb, the donation is being used to support a greater ecosystem and a good way to set a base cost value for a token.It is a good way to add to the cost”
Other crypto investors added that the move was suitable for sustaining blockchain projects and preventing Sybil attacks. Some also suggested that the donation is a good way to support the ecosystem by donating only a small fraction of one’s profit.
Cryptopolitan reporting by Collins J. Okoth
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