Source: The Block
The self-proclaimed 'memecoin' of the crypto social media platform Zora began trading without any official announcements or statement links, sparking a wave of criticism. Some users can only access ZORA directly through its smart contract address.
Token trading situation
This 'for entertainment purposes only' token does not grant holders governance rights, Zora stated in March. The trading of ZORA tokens caused confusion on Wednesday due to the lack of any official notification.
Users can only manually claim ZORA tokens by directly interacting with the smart contract address, which increases difficulty for novice crypto users. Several exchanges, including Binance, Bitget, and Bybit, received millions of dollars worth of tokens for trading, and the decentralized exchange Hyperliquid has also launched leverage options.
According to information from data provider Arkham Intelligence, on-chain trading flow is around $6 million. Claiming tokens early before the official 'token generation event' might give early-access users an unfair trading advantage, which is also one reason some people find this process unfair.
Social media reactions
Users quickly emerged on the social media platform X, criticizing Zora's handling of the airdrop. One user @aadvark89 referred to it as a 'scam masterclass' in a post, listing a series of reasons regarding the suspiciousness of the TGE, including the lack of communication with 'years-long' users and the promotion of the Zora platform by Base creator and Coinbase engineer Jesse Pollak. Earlier this month, Base faced criticism for publicly supporting a token launched on Zora, which quickly lost most of its value shortly after its launch.
Zora platform and tokenomics
Zora is an on-chain social media network that automatically converts posts into tokens. Since its launch in 2020, the platform has been popular among NFT collectors, but its tokenomics has also faced criticism. The total supply of ZORA is 10 billion tokens, with only 10% allocated to users for retroactive airdrops. Although Zora promotes the token as 'for entertainment purposes only' and does not grant users any 'governance rights' or claims to company equity, questions remain about why the team retains such a large portion of the supply.
In a post announcing the official launch of the airdrop, Zora mentioned that 'there is no deadline for claiming ZORA tokens.' This announcement came about two hours after the team moved the tokens allocated for the airdrop from Gnosis Safe to the contract address. The launch price of ZORA was approximately $0.03, and it is currently trading at $0.0195.
Development and financing
Zora experienced significant growth before the airdrop. In particular, multiple promotional posts by Base creator Pollak about 'content coins' (tokenized versions of social media posts) have attracted widespread attention in recent days. According to data from Dune Analytics, over 150,000 new coins were minted in the past week, though not without controversy.
Coinbase Ventures participated in Zora's $2 million seed funding and a $50 million funding round in 2022.
