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LayerZero Labs Completes Initial Snapshot Ahead Of Airdrop

LayerZero Labs Completes Initial Snapshot Ahead Of Airdrop

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LayerZero, a cross-chain interoperability protocol, has completed the initial snapshot as it prepares to launch its long-awaited airdrop for users, set to take place in the first half of 2024. 

The snapshot determined eligibility based on transactions up to 11:59:59 PM UTC on May 1, 2024, with the protocol’s developers indicating more airdrops could be in the pipeline. 

LayerZero Completes Initial Snapshot 

LayerZero had announced plans to issue a token in December 2023, stating that it would be launched in the first half of 2024. The protocol announced the completion of snapshot #1, indicating there would be more than one airdrop. The snapshot, which is the final point at which transactions count as eligible for an airdrop, was finalized at 11:59:59 UTC on May 1. 

Decentralized finance (DeFi) protocols generally use airdrops to create traction among early users by issuing rewards in the form of newly issued cryptocurrency. While specific rewards for the use of the network have not yet been detailed, the timing is in line with LayerZero’s 2023 statement. 

“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’ve heard the community discussion over the last few months and the lack of clear communication around this. 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.”

Snapshots generally act as a precursor to outflows as airdrop farmers move liquidity to other projects without losing their right to a future claim. 

Eliminating Third Parties 

The LayerZero protocol connects blockchains through technologies that remove the requirement for a third party. It is currently used by Stargate and Radiant Capital. Both projects registered a marginal increase in the valuation of their native token after LayerZero confirmed the snapshot. In April 2023, LayerZero raised $120 million in a Series B round at a $3 billion valuation. Investors included Andreessen Horowitz and Sequoia Capital. 

ZRO Hyperp

LayerZero’s ZRO was the first Hyperp (Hyperliquid-only perp) to launch on the HyperLiquid perpetual futures decentralized exchange (DEX) in September 2023. According to a pseudo-anonymous core contributor at HyperLiquid, the ZRO Hyperp was trading at $8.60, indicating a fully diluted valuation of around $17 billion. Hyperps trade similarly to perpetual futures contracts. However, they do not need an underlying spot or index oracle price. 

Airdrops: More Harm Than Good?

Airdrops aim to create more hype around a protocol by rewarding early adopters. However, these airdrops are riddled with professional airdrop hunters who farm the airdrop using multiple cryptocurrency wallets, often with no intention of using the protocol in the long term and then selling the farmed rewards after claiming them. In February, the pseudo-anonymous Yearn.finance developer Banteg warned that StarkNet’s airdrop eligibility list primarily consisted of airdrop squatters. 

In May, authorities in China apprehended the StarkNet airdrop identity forger, who assumed the identity of other users and claimed around 40,000 STRK tokens. In March 2023, a report revealed that airdrop hunters had consolidated around $3.3 million worth of tokens from the Arbitrum airdrop.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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