LayerZero’s Airdrop Drives Record Arbitrum Fee Revenue – Crypto News – Crypto News
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LayerZero’s Airdrop Drives Record Arbitrum Fee Revenue LayerZero’s Airdrop Drives Record Arbitrum Fee Revenue

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LayerZero’s Airdrop Drives Record Arbitrum Fee Revenue – Crypto News

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Community members have criticized the mandatory Protocol Guild donations associated with claiming ZRO tokens.

LayerZero’s highly anticipated ZRO airdrop has driven fee revenue on Arbitrum, the top Ethereum Layer 2 network by total value locked (TVL), to all-time highs.

On June 20, daily revenue on Arbitrum soared to $3.1 million, marking a daily increase of 21,000% from $14,000, according to Dune Analytics. The spike came one day after ZRO airdrop claims went live, with Arbitrum functioning as the main coordination chain for the drop.

The milestone beat out Arbitrum’s previous record daily revenue by 68%, with the network collecting $2.13 million in fees on Dec. 15, 2023, amid a surge in inscriptions activity on the chain.

The ZRO airdrop also drove an increase in overall activity on Arbitrum. The network hosted 40.3 transactions per second (TPS) on Friday, a 30% increase in two days, according to L2beat. Arbitrum posted an all-time of 50 TPS in December 2023.

“One of the biggest winners from the LayerZero airdrop is Arbitrum,” said Austin Marrazza, a product manager at Offchain Labs. “DAO raked in $3 million in congestion fees from claiming traffic today.”

LayerZero is a popular cross-chain interoperability protocol. According to Messari, LayerZero facilitated more than $6.7 billion worth of cross-chain asset transfers and 29.6 million messages in the first quarter of 2024.

Ethereum ecosystem activity tags new high

The throughput of the Ethereum ecosystem also hit an all-time high of 285 TPS on Friday.

Alongside the jump in Arbitrum activity, the record was also fueled by a recent spike in activity on Xai, a gaming-focused Layer 3 network co-developed by Offchain Labs, the team behind Arbitrum.

Xai averaged 103.8 TPS over 24 hours, marking a nearly 6,000% increase in 10 days.

ZRO airdrop controversy

On Thursday at 7 a.m. ET, the LayerZero Foundation launched claims for its newly minted ZRO token, which will remain open until September 20. Nearly 1.3 million wallets are eligible for the airdrop.

Airdrop claimants must make a $0.10 donation per ZRO token to the Protocol Guild, a non-profit that funds Ethereum core developers, in order to receive their tokens.

The “Proof-of-Donation” mechanism is tipped to generate up to $18.5 million for the Protocol Guild, with the LayerZero Foundation pledging to match donations up to $10 million over a four-year vesting period.

However, LayerZero has garnered pushback for its Proof of Donation system.

“Mandatory donations sound more like a glorified ICO,” said Banteg, a contributor to Yearn Finance. “Stop bulk funding Protocol Guild; it’s been successful enough.”

“Is it really alignment if it’s forced?” added Louis Cooper, co-founder at StrVcture Capital. ” If I’m at McDonald’s and they force me to donate to get my cheeseburger, do I really care about the kids or am I just hungry?”

But not everyone is unhappy. Adam Cochrane of Synthetix tweeted in support of the donation mechanism, arguing it aligns with supporting Ethereum’s core developers and long-term goals.

“People whining about the donation on LayerZero airdrop are dumb,” Cochrane posted on X. “You are getting something free, and being asked to donate a fraction of it to support a greater ecosystem… The money is literally going to support free tooling that helps all projects. Stop thinking you deserve free money for just existing.”

“There is no forced donation; if you don’t want to donate, simply don’t claim,” added Bryan Pellegrino, CEO of LayerZero Foundation. “This is not something you own; it’s something being offered.”

LayerZero’s ZRO token is currently trading for $3.15, down 36% from its high, according to CoinGecko. ZRO also boasts a market cap of $772.8 million.

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