Arbitrum's daily revenue soared to record $3.4 million amid LayerZero token claims

Quick Take

  • Amid LayerZero token claims, Arbitrum registered $3.4 million in revenue on June 20, compared to just $20,000 the day before.

Ethereum Layer 2 network Arbitrum saw daily revenue soar to a record $3.4 million (in ETH) on Thursday, benefiting from increased activity related to the opening of LayerZero’s ZRO token claims, for which it was the coordination chain.

Arbitrum had witnessed just $20,000 in revenue on June 19. This shows the daily revenue spiked more than 16,500% on Thursday in comparison, according to a Dune dashboard aggregated by datawarlock.

“One of the biggest winners from the LayerZero airdrop — Arbitrum,” Austin Marrazza, product manager at Arbitrum developer Offchain Labs, said. “DAO raked in $3 million in congestion fees from claiming traffic today.”

Arbitrum revenue. Image: Dune Analytics.

The LayerZero Foundation, the organization that supports the cross-chain interoperability platform LayerZero, opened airdrop claims for its native ZRO token at 7 a.m. ET on Thursday, which will remain open until Sept. 20.

Some 85 million ZRO tokens, representing 8.5% of the 1 billion total supply, are claimable by eligible participants, with the remaining tokens reserved for future distribution programs, ecosystem growth, strategic partners and core contributors. LayerZero Labs CEO Bryan Pellegrino previously identified a total of 1.28 million wallets eligible for the airdrop.

LayerZero asks eligible users to pay 10 cents per ZRO to claim airdrop

However, the foundation subsequently announced that to claim ZRO, users must make a $0.10 donation per ZRO token in USDC, USDT or ETH to support Protocol Guild, a non-profit funding collective for Ethereum core researchers and developers.

The new "Proof-of-Donation" claims mechanism is designed to generate up to $18.5 million for Protocol Guild, with LayerZero Foundation matching donations up to $10 million and the donated funds vested over four years.

The new claim mechanism faced criticism from some in the crypto community, who view the mandatory donations as a disguised form of funding or a tax rather than a true airdrop — typically intended as a reward for user contributions and to decentralize the protocol.

"There is no forced donation, if you don't want to donate... simply don't claim. This is not something you own, it's something being offered," Pellegrino responded on Thursday.

Arbitrum fees spike

Arbitrum benefitted as it is used as the coordination chain for the LayerZero token claims contract, processing claims atomically without needing additional LayerZero messaging.

Eligible users can also claim ZRO from Ethereum, Optimism, Base, Polygon, BNB Chain and Avalanche, but this requires a LayerZero cross-chain message to facilitate the claim on these networks. 

As a result, median gas prices on Arbitrum spiked from 0.01 gwei to 34.7 gwei before falling back to similar levels as the activity subsided.

Arbitrum median gas price. Image: Dune Analytics.

The jump in gas price equated to average daily transaction fees on Arbitrum soaring to $0.89 on Thursday, compared to a sub-cent typical fee. They have since returned to that baseline.

LayerZero’s ZRO token is currently trading for $3.15, according to CoinGecko data. It has a market cap of $796 million and a fully diluted valuation of $3.2 billion, with nearly $1 billion in trading volume over the past 24 hours.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block and writer of The Daily newsletter, keeping you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the latest market updates. You can get in touch with James on Telegram or 𝕏 via @humanjets or email him at [email protected].

Editor

To contact the editor of this story:
Vishal Chawla at
[email protected]