TL;DR
- The launch of LayerZero’s ZRO token on June 20 caused a 16,680% increase in Arbitrum’s daily revenue, reaching $3.43 million.
- To claim the ZRO token, users must donate 10 cents in USDC, USDT, or ETH per token, which increased gas fees on ARB to an average of 89 cents.
- The value of ZRO has fallen 14.3% in the last day, standing at $3.11, reflecting mixed market reactions.
On June 20, the launch of LayerZero’s ZRO token caused an unprecedented increase in Arbitrum’s daily revenue, reaching a record $3.43 million, representing a 16,680% increase compared to the previous day. This explosion in fees is due to the “donation” mechanism that LayerZero implemented as part of its token distribution.
To claim the new ZRO token, LayerZero requires users to donate 10 cents in USDC, USDT, or ETH per ZRO token. This donation goes to the Protocol Guild, an initiative that supports Ethereum developers. Although LayerZero has insisted that this mechanism does not constitute a traditional airdrop, arguing that airdrops do not favor equitable distribution or long-term protocol health, the strategy has come under a veil of controversy.
The implementation of these “donations” has increased gas fees on the Arbitrum blockchain, raising them to an average of 89 cents, a considerable increase from the typical cost of less than a cent. This has led to a record daily profit of $3.29 million for the network, marking a new peak for ARB.
Arbitrum Registers Highest Profit Levels Since December
Data provided by Dune Analytics and DefiLlama have been crucial in analyzing the financial impact of the ZRO launch on the Arbitrum network. These have been the highest revenue days for ARB since December 14, when the network generated $2.13 million in revenue before going offline due to a surge in inscriptions. Inscriptions, a form of data formatting that can include large packages like images, increased the cost of fees due to their size.
However, after the initial euphoria, the value of ZRO has decreased by 14.3% in the last day, standing at $3.11, after reaching a peak of $4.79, according to CoinGecko data. The volatility reflects the mixed market reactions to LayerZero’s new distribution mechanism.
The significant increase in Arbitrum’s fees and revenues highlights the impact of new token distribution initiatives and strategies on the operational and financial dynamics of blockchain networks.
