- Cross-chain bridge LayerZero has taken a snapshot of user activity for its first airdrop.
- The announcement alludes to the possibility of multiple airdrops in the future.
The wait for LayerZero’s highly-anticipated token airdrop might soon be over.
In a May 1 X post, the cross-chain protocol announced that it had completed the snapshot for its first airdrop at 11:59 pm London time.
“More information coming soon,” the post said.
More information coming soon. pic.twitter.com/NyMpJFVg9S
— LayerZero Labs (@LayerZero_Labs) May 2, 2024
In December, LayerZero said it planned to launch and distribute its token “within the first half of 2024.”
Snapshots are cut-off points for user activity to count towards airdrop eligibility. The implication is that all LayerZero activity after May 1 will not count towards the protocol’s first airdrop.
LayerZero, however, referred to the snapshot as its first, leading onlookers to speculate that the protocol could split its airdrop into multiple rounds.
Excitement for LayerZero’s airdrop is high.
LayerZero Labs, the firm behind the protocol, is privately valued at $3 billion. Last year, users looking to qualify for a potential LayerZero airdrop pushed transactions on Stargate, a bridge powered by LayerZero, to all-time highs.
Although LayerZero’s token hasn’t launched yet, DeFi users are already speculating on its value. Futures trading on derivatives exchange Hyperliquid values the token at $8.35.
The snapshot announcement puts weight behind LayerZero’s previous commitment to launch its token within the first half of the year, which gives it until June 30.
Multiple rounds
If LayerZero is planning to conduct multiple rounds of airdrops, it won’t be the first.
Jupiter Aggregator, a suite of protocols on Solana, announced it will conduct three additional rounds of token airdrops following its first airdrop on January 31.
More recently, restaking protocol EigenLayer said its first token airdrop, scheduled for May 10, will also be the first of many.
By splitting up airdrops over multiple rounds, these protocols are likely trying to maintain the high levels of activity and deposits they experienced in the leadup to their first airdrop.
Once a protocol airdrops a token, mercenary users often move their funds to other protocols promising airdrops.
Some protocols have lost a considerable amount of deposits after airdropping their token. Parcl, a real-estate futures trading platform, lost 67% of its $185 million worth of deposits following its April 1 airdrop snapshot.
LayerZero will want to avoid a similar situation.
The Stargate bridge, which is also built by the LayerZero team, relies on users providing liquidity to facilitate low-cost transactions between different blockchains.
Many users providing liquidity on Stargate speculate that doing so could qualify them for LayerZero’s airdrop.
If users decide to pull their funds following LayerZero’s airdrop, it could make Stargate less competitive versus other cross-chain bridges.
Tim Craig is a DeFi Correspondent at DL News. Got a tip? Email him at tim@dlnews.com.
