Ethereum

Token

LayerZero

An omnichain interoperability protocol LayerZero’s ZRO token experienced a 16% drop in value within a day of its launch due to a controversial decision by its founder regarding the token claiming process, which critics compared to a “tax”. 
The controversy stems from LayerZero’s requirement for <a href="https://info.layerzero.foundation/zro-claim-6e37a81e9c2a" target="_blank" rel="noreferrer noopener nofollow">users to donate</a> a small amount, equivalent to $0.10 in USDC, USDT, or native ETH, per ZRO token, claimed. This donation goes directly to the Protocol Guild, a collective fund for Ethereum developers.&nbsp; 
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 <img decoding="async" width="1000" height="465" src="https://www.cryptotimes.io/wp-content/uploads/2024/06/LayerZero-ZRO-Token-Sees-16-Drop-Due-to-Donation-Controversy.png" alt="LayerZero ZRO Token Sees 16% Drop Due to Donation Controversy" class="wp-image-185611" srcset="https://www.cryptotimes.io/wp-content/uploads/2024/06/LayerZero-ZRO-Token-Sees-16-Drop-Due-to-Donation-Controversy.png 1000w, https://www.cryptotimes.io/wp-content/uploads/2024/06/LayerZero-ZRO-Token-Sees-16-Drop-Due-to-Donation-Controversy-800x372.png 800w, https://www.cryptotimes.io/wp-content/uploads/2024/06/LayerZero-ZRO-Token-Sees-16-Drop-Due-to-Donation-Controversy-768x357.png 768w, https://www.cryptotimes.io/wp-content/uploads/2024/06/LayerZero-ZRO-Token-Sees-16-Drop-Due-to-Donation-Controversy-860x400.png 860w" sizes="(max-width: 1000px) 100vw, 1000px">
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 LayerZero Chart | Source: CoinmarketCap
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While LayerZero defended this move as a way to support development, many in the crypto community viewed it negatively, arguing that it transformed the token distribution into something resembling an initial coin offering (ICO). 
Despite the backlash, LayerZero maintains that the launch of ZRO is not an airdrop. They argued that traditional airdrops no longer serve the purpose of fair distribution and community building due to a rise in airdrop farming and Sybil entities.&nbsp; 
Bryan Pellegrino, LayerZero’s co-founder, reiterated that <a href="https://www.cryptotimes.io/2024/06/21/layerzeros-zro-token-claims-now-open/" target="_blank" rel="noreferrer noopener">claiming ZRO tokens</a> is optional and that those who disagree with the donation criterion can choose not to participate. 
The launch saw a 15% surge followed by a rapid decline in ZRO’s value, a common pattern in token launches where claimants quickly sell off their tokens.&nbsp; 
However, some members of the crypto community supported LayerZero’s approach, believing that the donation mechanism could deter Sybil operations and contribute to a healthier ecosystem. 
Positive user experience comments were noted for ZRO’s claiming process, likened to Spotify Wrapped, but the token’s value dropped 15% to $3.35 in 24 hours, according to <a href="https://coinmarketcap.com/currencies/layerzero/" target="_blank" rel="noreferrer noopener">CoinMarktCap</a> data. 
The debate around LayerZero’s token launch reflects ongoing discussions within the crypto community regarding fair distribution, community engagement, and the evolving nature of token airdrops.

LayerZero ZRO Token Sees 16% Drop Amid Donation Controversy

The Crypto Times

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