As a seasoned crypto investor with a keen interest in DeFi protocols, I’ve witnessed the rise and fall of many projects that have employed airdrops to boost their user base. While the allure of free tokens is undeniable, I believe that the long-term impact of airdrops on DeFi protocols can be detrimental if not executed carefully.
As a analyst, I’m excited to share that I’ve learned about the upcoming airdrop from LayerZero, the innovative cross-chain interoperability protocol. This much-anticipated event marks a significant milestone in their development and is set to benefit their community of users.
According to a recent post on r/LayerZeroLabs, LayerZero took the initial step in preparing for its forthcoming airdrop on May 2nd. Further details about the event are set to be revealed shortly.
Decentralized finance (DeFi) platforms frequently utilize airdrops as a strategy to generate greater interest, providing new digital currencies to the first adopters as incentives.
In simpler terms, ZRO by LayerZero was the initial decentralized exchange offering (on HyperLiquid’s DEX) a perpetual future contract based solely on hyperliquid, which debuted as early as September 2023.
As a crypto investor, I’ve noticed that ZRO Hyper is currently trading at a price of $8.3. According to Xulian, the anonymous core contributor of Hyperiquid, this could suggest a fully diluted valuation (FDV) of approximately $17 billion based on information shared in a May 2 X post.
In simpler terms, Hyperp trades function like perpetual futures contracts, but they don’t rely on a real-time reference price from an underlying asset or index. Hyperliquid is currently the leading decentralized exchange (DEX) in terms of trading volume and open interest for perpetual futures contracts.
Without providing further information from LayerZero Labs, we know that they have hinted at an upcoming token launch, which they mentioned could take place as early as the beginning of 2024 based on their previous X Post announcement on December 7th.
“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?
Airdrops are designed to encourage greater use of protocols by distributing rewards to early adopters. However, not all users reap the largest rewards from these distributions.
As an analyst, I’ve observed that crypto airdrops can be a target for individuals who use multiple wallets to claim the same airdrop repeatedly, with no genuine interest in utilizing the underlying protocol long-term. Instead, they sell the rewards on the market right after claiming them.
As a researcher investigating the Starknet airdrop incident in February, I uncovered some concerning findings. Banteg, an anonymous developer for Yearn.finance, raised alarm that a significant portion of the 1.3 million eligible wallet addresses for the Starknet airdrop were controlled by airdrop squatters. Specifically, around 701,544 addresses were linked to repeat or renamed GitHub accounts belonging to these individuals. These squatters had seemingly amassed multiple addresses in order to maximize their potential airdrop rewards.
On May 1st, Chinese law enforcement apprehended an individual who had forged identities for the StarkNet airdrop. This person fraudulently assumed other users’ identities and claimed over 40,000 STRK tokens in their names. They subsequently exchanged these tokens for approximately $91,000 worth of Tether (USDT).
In March 2023, it came to light that individuals who participated in the Arbitrum (ARB) airdrop in late 2022 managed to amass a total of $3.3 million in tokens from 1,496 different wallets and transferred them into only two wallets they held.
As a crypto investor, I’ve noticed that some individuals, referred to as “airdrop squatters,” have a tendency to quickly sell the new tokens they’ve received through airdrops. This mass selling often leads to a significant drop in the value of the newly distributed token.
Read More
- JASMY PREDICTION. JASMY cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- WLD PREDICTION. WLD cryptocurrency
- Top gainers and losers
- CTC PREDICTION. CTC cryptocurrency
- ASTO PREDICTION. ASTO cryptocurrency
- DUEL PREDICTION. DUEL cryptocurrency
- CLV PREDICTION. CLV cryptocurrency
- ELK PREDICTION. ELK cryptocurrency
- SCOMP PREDICTION. SCOMP cryptocurrency
2024-05-02 11:44