Bittime - Recently ZKzync has announced the launch of the ZK token which sparked a fierce debate and a significant drop in the protocol's total value locked (TVL).
On June 11, ZKsync announced that the ZK token will be officially launched on June 17, with a distribution plan that includes 17.5% of the total supply of 21 billion tokens to early adopters via a one-time airdrop.
This distribution is intended to reward long-term supporters who have been part of the mainnet development since 2023. However, the community responded negatively to the perceived injustice in the token allocation. Early users voiced their dissatisfaction, feeling that the rewards received were inadequate.
Controversial Token Distribution
According to data from DeFiLlama, ZKsync's TVL plummeted to around $128 million (IDR 2.048 trillion) after the details of the controversial token distribution were announced.
In June, the token distribution details revealed that 16.1% of the tokens would be allocated to the ZKsync team and 17.2% to investors. The rest will be set aside for ecosystem initiatives and will be managed by the ZKsync Foundation and the ZK Nation governance process.
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Crypto Community Reaction
The community responded with disappointment, although ZKsync explained that 89% of the 17.5% of tokens allocated for the airdrop would be used for significant network transactions and only 11% for developers and researchers, dissatisfaction remained.
This announcement triggered a significant outflow of assets from the protocol, as reflected in the decline in TVL from nearly $200 million to $128 million. This decline signals a loss of trust among users who feel ignored by the distribution strategy.
Declining TVL Trend and Its Effects
It should be noted that TVL has been in a downward trend since March, when its value peaked at $189.45 million (Rp3.031 trillion). In July last year, TVL reached an all-time high of $196.55 million due to increased demand for large-scale projects.
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Reactions on Social Media
On social media, the backlash was obvious. A user by the name xqt1688 highlighted their reasons for not supporting the ZKsync token, stating that there are six reasons not to buy the ZKSync token. Secondary investors have officially declared war on VCs and project owners. If we don't buy, we have nothing to lose.
Other users also criticized the project as merely mimicking in an unstable market, arguing that the "layer-2" narrative has proven ineffective given the decline in TVL.
Another user, ImanOrace, also added that ZKsync will "become another ghost chain". Leading crypto analyst "0xy10" also wrote that ZKSync is 100% allocated to insiders who are part of the airdrop, bringing the attention of the crypto community to 0x3efd3243683732738354cc10302ddc8d572ac187 address.
ZKsync Response
In response to the negative reaction, ZKsync emphasized its commitment to transparency and community engagement. The ZKsync team invites further feedback from users to better align future decisions with the community's expectations.
Conclusion
The launch of the ZKsync token and the controversy surrounding its distribution underscore the importance of transparency and community engagement in the crypto world.
While ZKsync strives to meet these challenges with openness, further steps are needed to restore trust and ensure the sustainability of their ecosystem.
The crypto community will continue to closely monitor these developments, hoping that ZKsync can navigate this storm and emerge stronger.
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