LayerZero’s “not an airdrop” ZRO token airdrop has spurred a new peak for Arbitrum’s daily revenue.

The launch of LayerZero's ZRO token on June 20 led to an unprecedented surge in fees and revenue for the Arbitrum blockchain, which saw a record daily revenue of $3.43 million, marking a 16,680% increase compared to the previous day. This significant increase was primarily driven by the mechanics of the token launch, which included a mandatory "donation" requirement for claimants.

Token Launch and Fee Surge
LayerZero's token launch required users to donate $0.10 in USDC, USDT, or native ETH per ZRO token claimed. This donation, which goes to the Protocol Guild to support Ethereum developers, effectively spiked the average gas fees on Arbitrum to 89 cents, a substantial rise from the usual sub-1-cent fees. The elevated transaction activity resulted in a profit surge for Arbitrum, with the network earning $3.29 million on the day.

Criticism and Market Reaction
The mandatory donation mechanism sparked criticism, with some arguing that it imposes an unnecessary cost on users. LayerZero defended this approach, stating that their token launch strategy is intended to ensure equitable distribution, community building, and long-term protocol health. They argued that traditional airdrops often fail to engage recipients who have little interest in the project beyond the short term.

Historical Context and Comparisons
This event marked Arbitrum's highest revenue day since December 14, when it earned $2.13 million in revenue due to a surge in inscriptions on the network. Inscriptions involve data formatting that carries larger data packages, such as images, leading to higher costs and fees. However, despite the high revenue, Arbitrum made a profit of only $414,000 that day due to the steep fees required for posting and verifying the inscription data on Ethereum.

Market Performance of ZRO
Despite the initial buzz and high transaction activity, the price of the ZRO token has seen a sharp decline. It dropped by 23% in the past day to $3.42, after peaking at $4.79 according to CoinGecko data.

Conclusion
The launch of LayerZero's ZRO token significantly impacted Arbitrum's network fees and revenue, highlighting the effects of innovative but contentious token distribution mechanisms. While the approach aimed to foster long-term community engagement and support Ethereum developers, it also drew criticism and led to volatile market performance for the ZRO token. This event underscores the ongoing challenges and debates in the DeFi industry regarding token distribution strategies and network fee structures.