LayerZero cross-chain interoperability protocol completes first airdrop snapshot
LayerZero, a cross-chain interoperability protocol, is preparing to launch its long-awaited airdrop for users.
LayerZero has completed the first snapshot for its upcoming airdrop on May 2, according to an X post by LayerZero Labs, that promised followers “more information coming soon.”
Airdrops are widely employed by decentralized finance (DeFi) protocols to create more traction, by rewarding early users with newly issued cryptocurrencies.
LayerZero’s ZRO was the first Hyperp (Hyperliquid-only perp) that launched on HyperLiquid perpetual futures decentralized exchange (DEX) back in September 2023.
The ZRO Hyperp trading at $8.3 could imply a fully diluted valuation (FDV) of around $17 billion according to Xulian, the pseudonymous core contributor of Hyperiquid, said in a May 2 X post.
Hyperps trade similarly to perpetual futures contracts but do not require an underlying spot or index oracle price. Hyperliquid is the world’s largest perpetual futures DEX by trading volume and Open Interest.
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While LayerZero Labs shared no additional details about the airdrop, it previously teased that it is preparing for a token launch in early 2024, according to a Dec.r 7 X post:
“LayerZero has always been built with the ability to have a native token within the protocol, as can be seen in the immutable code launched on day 1… We’ll state now in no uncertain terms that there will be a LayerZero token. Its distribution is something we’re committed to getting right and expect it to happen within the first half of 2024.”
Are airdrops harming DeFi protocols long term?
While airdrops aim to create more protocol usage by rewarding early adopters, it’s not always the users taking the lion’s share of the rewards.
Crypto airdrops are often riddled with professional airdrop hunters (or squatters) that farm the same airdrop with multiple cryptocurrency wallets with no intention of using the protocol in the long term and market selling the rewards after claiming.
In February, pseudonymous Yearn.finance developer Banteg warned that Starknet’s airdrop eligibility list mainly included airdrop squatters. Approximately 701,544 of the 1.3 million eligible wallet addresses were allegedly linked to repeat or renamed GitHub accounts controlled by airdrop squatters.
On May 1, Chinese police captured the StarkNet airdrop identity forger, who assumed other users’ identities, claimed over 40,000 STRK tokens on their behalf, and converted it to around $91,000 worth of Tether (USDT).
In March 2023, it was revealed that airdrop hunters consolidated $3.3 million worth of tokens from the then Arbitrum (ARB) airdrop from 1,496 wallets into just two wallets they had controlled.
Airdrop squatters tend to sell their compounded rewards as soon as they receive the tokens, which usually results in a sharp decline in the newly airdropped token’s value.
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