LayerZero Airdrop Drives Arbitrum Activity to \'Literal Madness\' as Users Face Long Waiting Times and Increased Gas Fees

On Thursday, interoperability protocol LayerZero conducted its token generation event, allowing users to claim their ZRO airdrop allocation for the first time.

LayerZero (CRYPTO: ZRO) began airdropping its native tokens on Thursday. Here’s what happened.

Users Able To Claim Airdrop Allocation

LayerZero interoperability protocol began airdropping its native tokens on Thursday, allowing users to claim their portion of the massive airdrop for the first time.

The price of ZRO began trading around $4.45 but has slid 17% to $3.66, giving it a fully diluted valuation of $3.66 billion and a market cap of $917 million, besting decentralized trading platform dYdX and yield tokenization protocol Pendle Finance, respectively, according to CoinGecko.

“LayerZero is one of the most used and farmed protocols,” the LayerZero Foundation, a nonprofit dedicated to the long-term sustainability of the interoperability protocol, said in a blog post, adding that the initial token distribution was challenging as “nearly six million unique wallet addresses have interacted with the protocol.”

Users Encounter Long Waiting Times, Higher Gas Fees

Due to the large number of addresses attempting to claim their airdrop allocation, some users experienced claiming times that lasted several hours and encountered higher gas fees.

LayerZero CEO and co-founder Bryan Pellegrino asked those with smaller claims to wait for activity to die down.

The LayerZero airdrop drove massive activity to Arbitrum, an Ethereum (CRYPTO: ETH) layer 2 blockchain network, to the point of “literal madness,” according to Pellegrino.

“Things are insane and on fire (at the moment),” Bryan Pellegrino wrote on X.

“Every ZRO claim creates a transaction on @Arbitrum,” Entropy Advisors, a governance firm focused on the layer 2 blockchain network, said on X. “With over 165,000 claims so far in 2.5 hours, Arbitrum One usage surged to 140 [transactions per second].”

The increased activity on Arbitrum made the layer 2 “one of the biggest winners” from the airdrop, said Austin Marrazza, the product manager of Arbitrum software development firm Offchain Labs, adding that Arbitrum DAO “raked in $3 million in congestion from claiming traffic today.”

“LayerZero has caused an unprecedented surge in gwei, with fees reaching up to $33 for destination transactions. We never saw such high gas prices on [Arbitrum] in 2022.”

Meanwhile, some users experienced a significant delay in claiming their ZRO tokens. Several crypto users on X, including “@TobiWebIII” and “@uglygmi,” shared how their claiming process took a long time.

When one user asked Pellegrino for help in addressing their two-hour claiming process, Pellegrino said, “Nothing to do right now, [transaction] has to confirm on [Arbitrum] and come back and Arbitrum is under crazy stress.”

Proof-Of-Donation Sparks Controversy

As LayerZero grapples with complaints of high gas fees and long wait times, it’s also dealing with another controversy surrounding its unique claims process.

Users are required to donate 10 cents for each ZRO token they want to claim.

“LayerZero is introducing a new claiming mechanism called Proof-of-Donation, which will result in ~18.5 million being donated to @ProtocolGuild, a collective funding mechanism for Ethereum developers.”

Some, such as crypto analyst Adam Cochran, support LayerZero and Pellegrino’s decision to implement a way to fund the development of the Ethereum ecosystem through the airdrop, Many have taken to social media to express their unsavory opinion.

For example, Ethereum developer Lefteris Karapetsas said, “A forced donation is wrong. If you force a donation then it’s called a tax.”

While some claim the proof-of-donation mechanism is paternalistic in forcing people to donate, Pellegrino pushed back, saying, “There is no forced donation, if you don’t want to donate… simply don’t claim. This is not something you own, it’s something being offered.”

News source：https://www.kdj.com/cryptocurrencies-news/articles/layerzero-airdrop-drives-arbitrum-activity-literal-madness-users-waiting-times-increased-gas-fees.html

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