Controversy over 'Donation' in Dev Airdrop: Altcoin Price Drops!

LayerZero made a big splash with the news of the giant airdrop and the listing of leading exchanges. ZRO, the native token of the altcoin project, saw a 15.15% increase in just 20 minutes after its launch on June 20. However, the project team made a statement regarding the airdrop, which includes a donation mechanism. After that, he began to debate whether the people’s donation mechanism was ingenious or just a “tax” excuse. Thus, the token price experienced a sharp fall.

LayerZero introduced a ‘donation’ requirement in the airdrop, altcoin price dropped!

As you can see from Kriptokoin.com, the cross-chain interoperability protocol LayerZero launched its token yesterday. The altcoin project’s newly launched token, ZRO, went into decline shortly after its launch as its founder advocated a controversial donation criterion for claiming tokens, which some likened to a “tax.” By the way, some individuals disagree. He thinks that this mechanism could be the right step to solve the problems that have been experienced in token airdrops recently.

However, the debates still negatively affected the token’s performance. ZRO, after being launched on June 20, rose to $4.71 with a 15.15% increase in just 20 minutes. However, it witnessed a 22% drop within two hours. According to CoinMarketCap data, ZRO was trading at $3.35, more than a 17% decrease on a daily basis at the time of writing.

ZRO daily price chart. Source: CoinMarketCap### Donation requirement and community reaction to receive ZRO airdrop

The launch of ZRO came with its unique controversies. LayerZero required users who want to claim tokens to donate a small amount of money per ZRO token. LayerZero wrote from its official X account, “Users need to donate 0.10 USD per ZRO in USDC, USDT, or local ETH to claim ZRO. This small donation goes directly to the Protocol Guild.”

Source: LayerZero FoundationLayerZero predicted that the Protocol Guild, a collective funding mechanism for Ethereum developers, will result in approximately $18.5 million in donations. Users argued that having to pay a “tax” transformed the nature of the “airdrop” into more of an initial coin offering (ICO). Therefore, this move was met with a wave of backlash from the crypto community. Users flooded LayerZero’s post with comments like “Is this a joke?” and “How about paying for this.”

By the way, some members of the crypto community think that the donation request mechanism of ZRO is a step in the right direction for future airdrops. Adam Cochran reacted by saying ‘People who complain about donations in LayerZero airdrop are stupid!’ Cochran noted that this practice is used to support a larger ecosystem. He also noted that it is a good way to determine a basic cost value for a token.

LayerZero token launch confirmed that it is not an airdrop!

LayerZero argued that airdrops no longer contribute to “equitable distribution, community building, and protocol health goals that airdrops were originally introduced to solve.” This is mainly due to token buyers who have “little or no interest” in the project’s long term success due to airdrop farming and an increase in Sybil holdings. This refers to assets that create and use a large number of wallets for an airdrop farming.

Bryan Pellegrino, co-founder of LayerZero, spent the day advocating for the token launch. Additionally, he reiterated that no one owns the tokens and users should refrain from claiming them if they do not wish to donate. In this context, Pellegrino said, “There’s no forced donation! If you don’t want to donate… just don’t claim. It’s not something you own, it’s something offered.”

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