TL;DR
- The announcement of ZKsync token distribution caused a drop in TVL to approximately $128 million, down from nearly $200 million.
- The community considered the distribution unfair, as 16.1% of the tokens were allocated to the team and 17.2% to investors.
- The protocol responded to the criticism by reiterating its commitment to transparency and requesting feedback to improve future decisions.
The announcement of the ZKsync token distribution has been highly controversial, negatively affecting user confidence and causing a significant drop in the protocol’s total value locked (TVL). According to DeFiLlama data, the TVL decreased to approximately $128 million following the announcement, a considerable loss from the nearly $200 million prior.
On June 11, the protocol announced that its ZK token would be officially launched on June 17, detailing a distribution plan that allocates 17.5% of the total 21 billion tokens to early users through a one-time airdrop. This initiative aims to reward those who have supported mainnet development since 2023. However, the revelation that 16.1% of the tokens would be allocated to the ZKsync team and 17.2% to investors caused significant discontent among the community.
The community expressed dissatisfaction, considering the distribution unfair and unfavorable to loyal users. Although ZKsync clarified that 89% of the airdrop tokens were intended for significant network transactions and only 11% for developers and researchers, the discontent persisted. This negative sentiment resulted in an exodus of assets from the protocol, evidenced by the drop in TVL.
Airdrop of Criticism for ZKSync
Criticism quickly emerged on social media. An X user known as xqt1688 listed six reasons not to buy ZKsync tokens, pointing out that secondary investors were at odds with VCs and project owners. Other users criticized the professionalism of the team behind the protocol and accused the project of being an imitator in an unstable market. An analyst accused the project of allocating the airdrop tokens mainly to insiders, directing attention to a specific Ethereum address.
In response to the controversy, the ZKsync team reiterated its commitment to transparency and community engagement. They invited users to provide more feedback to better align future decisions with community expectations.
The TVL decline was significant, considering it had peaked at $189.45 million in March and reached an all-time high of $196.55 million in July last year. This downward trend indicates a clear loss of user confidence in the project.
