Snapshot of first airdrop completed by LayerZero cross-chain interoperability protocol

LayerZero, a protocol that enables cross-chain interoperability, is gearing up to launch its highly anticipated airdrop for users. The first snapshot for the airdrop was completed on May 2, as confirmed by a post from LayerZero Labs. The post also promised to provide more information soon. Airdrops are commonly used by decentralized finance (DeFi) protocols to attract more users by rewarding them with newly issued cryptocurrencies. LayerZero’s ZRO was the first Hyperliquid-only perpetual (Hyperp) to be launched on the HyperLiquid decentralized exchange (DEX) in September 2023. The ZRO Hyperp is currently trading at $8.3, which suggests a fully diluted valuation (FDV) of around $17 billion, as stated by Xulian, a pseudonymous core contributor of Hyperiquid, in a post on May 2. Hyperps function similarly to perpetual futures contracts but do not require an underlying spot or index oracle price. Hyperliquid is the world’s largest DEX for perpetual futures in terms of trading volume and Open Interest. While LayerZero Labs has not yet provided additional details about the airdrop, it had previously hinted at a token launch in early 2024, according to a post from December 7, 2023. Airdrops, although intended to encourage protocol usage by rewarding early adopters, often face challenges. Professional airdrop hunters, also known as squatters, often exploit airdrops by farming them with multiple cryptocurrency wallets and then selling the rewards in the market. This can negatively impact the value of the airdropped tokens. It was recently discovered that the eligibility list for StarkNet’s airdrop mainly consisted of airdrop squatters, and a Chinese individual was apprehended for forging identities to claim airdrop tokens on behalf of others. Similarly, airdrop hunters consolidated millions of dollars worth of tokens from the Arbitrum airdrop into just two wallets. These examples highlight the potential drawbacks of airdrops and the challenges they pose for DeFi protocols in the long run.