The atypical distribution process for LayerZero Labs' ZRO tokens, requiring a donation to access, has caused confusion among Polymarket punters. Crypto users are currently contesting a $680,000 bet and questioning the real nature of this launch.
A $680,000 bet at the heart of the controversy
LayerZero Labs surprised the crypto community by unveiling a new mechanism to distribute 85 million ZRO tokens, called “Proof-of-Donation” or proof of donation in French.
Indeed, for get ZROeligible applicants must donate $0.10 per token to Protocol Guild, a non-profit collective of leading Ethereum researchers and developers.
This approach breaks with the usual practices of “airdrops”, which consist of distributing tokens for free to generate enthusiasm and encourage adoption. LayerZero thus justifies this choice by arguing that classic “airdrops” do not promote the strengthening of the community or the health of the protocol in the long term.
The project insists that it has deliberately avoided the term “airdrop” in its communication to mark this difference. However, this semantic distinction lies at the heart of the controversy currently agitating Polymarket.
The Polymarket community divided
On Polymarket, a decentralized betting platform, users had heavily bet on achieving a ZRO airdrop before June 30, with a total prize pool of $680,000.
But the atypical launch of LayerZero sowed doubt, causing the “Yes” odds to drop to 54% just before the end of the bet. Many punters are now disputing the final result in favor of “Yes”.
Users entered the UMA protocol, Polymarket's partner in charge of resolving disputes, to determine the veracity of the result. Its “decentralized truth machine”, which is based on the vote of UMA token holders, must rule on the real nature of the ZRO launch. However, some Polymarket users fear manipulation of the process and are crying foul.
The debate rages on the Polymarket Discord server. For some, LayerZero does not have the authority to unilaterally redefine what an “airdrop” is.
Others point out that during a previous dispute involving Lens Protocol, token sales were explicitly excluded from the definition of an “airdrop”. A recent “rules update” from Polymarket, however, calls for considering the broader context of the distribution of ZROs when deciding.
In sum, the resolution of this bet will have significant implications, not only for Polymarket punters, but also for the collective understanding of token distribution mechanisms in the crypto ecosystem.
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