Once a leading Layer 2 scaling solution, ZKsync Era is facing significant financial challenges following its recent token airdrop, with the platform’s daily revenue falling dramatically from its pre-airdrop peak of $746,000 to just $6,800.
The sharp drop in revenue occurred after the June 24 airdrop, where 3.67 billion ZK tokens, representing 17.5% of the total supply, were distributed to eligible wallets. However, the highly anticipated event triggered an exodus of users and liquidity from the network, with daily transactions dropping from a high of 1.8 million to just 200,000.
The ZKsync Era decline is indicative of broader issues in the cryptocurrency market, particularly among Layer 2 solutions and new token launches. While ZK has fallen in value by 64.06% year-to-date, a similar trend was observed for LayerZero’s ZRO token, which has fallen by 19.21% in the same period.
The broader GML2 index, which looks at Layer 2 tokens, has also fallen a significant 66% since its March high, underscoring the challenges across the industry. The post-airdrop decline of ZKsync Era raises concerns about the effectiveness of token distribution strategies in the current market environment.
*This is not investment advice.