The launch of LayerZero (ZRO) on June 20 significantly increased fees on the Arbitrum (ARB) network, leading to a record daily revenue of $3.43 million, marking a 16,680% increase compared to the previous day.
LayerZero is a multi-chain protocol that aims to improve the operational compatibility of a network by allowing developers to create more universal and efficient applications.
The launch of ZRO included a controversial “Proof-of-Donation” mechanism, requiring candidates to spend a small amount on tokens to secure a portion of the distribution. This mechanism led to a spike in average gas fees in the blockchain to 89 cents from usually less than 1 cent.
As a result, Arbitrum’s profits rose to $3.29 million for the day, setting another record, according to data from Dune Analytics and DefiLlama.
LayerZero required those wishing to receive ZRO to donate $0.10 in USDC, USDT, or ETH for each ZRO, with the proceeds going to Protocol Guild, a fundraising mechanism that supports Ethereum developers.
Today LayerZero is introducing a new claiming mechanism called Proof-of-Donation, which will result in ~$18.5 million donated to @ProtocolGuild, a collective funding mechanism for Ethereum developers.
LayerZero defended this approach arguing that airdrop events do not align with their goals of fair distribution, community building, and protocol sustainability, as many token recipients from these events do not have a long-term interest in the project.
This event marked the highest daily revenues for Arbitrum since December 14, when the network earned $2.13 million.