The Ethereum Layer 2 solution, Arbitrum, experienced an unprecedented surge in daily revenue, reaching a staggering $3.4 million (in ETH) on Thursday. This remarkable uptick in financial inflow was driven by a flurry of activity related to the initiation of LayerZero’s ZRO token claims, with Arbitrum acting as the pivotal coordination chain.

On June 19, Arbitrum’s revenue was a modest $20,000, highlighting an astronomical increase of over 16,500% by Thursday, as per data compiled by Dune and interpreted by datawarlock.

“Arbitrum emerged as a significant beneficiary from the LayerZero airdrop,” remarked Austin Marrazza, product manager at Offchain Labs, the developers behind Arbitrum. “The DAO amassed $3 million in congestion fees from today’s claiming frenzy.”

The LayerZero Foundation, which champions the cross-chain interoperability platform LayerZero, initiated the airdrop claims for its native ZRO token at 7 a.m. ET on Thursday. The claims window remains open until September 20.

A total of 85 million ZRO tokens, constituting 8.5% of the 1 billion total supply, are available for eligible claimants. The remaining tokens are earmarked for future distribution programs, ecosystem expansion, strategic partnerships, and core contributors. LayerZero Labs CEO Bryan Pellegrino disclosed that 1.28 million wallets qualify for the airdrop.

Controversial Donation Requirement

In a twist, the foundation announced that to claim ZRO, users must contribute $0.10 per ZRO token in USDC, USDT, or ETH to support Protocol Guild, a non-profit collective funding Ethereum core researchers and developers. This “Proof-of-Donation” mechanism is poised to generate up to $18.5 million for Protocol Guild, with the LayerZero Foundation matching donations up to $10 million, with the funds vested over four years.

This mechanism drew ire from some in the crypto community, who perceived the obligatory donations as a covert fundraising strategy or tax, rather than a traditional airdrop intended to reward user contributions and decentralize the protocol.

Pellegrino countered the criticism on Thursday, asserting, “There is no forced donation. If you don’t want to donate, simply don’t claim. This is not an entitlement; it’s an offer.”

Spike in Arbitrum Fees

Arbitrum, serving as the coordination chain for LayerZero token claims, facilitated atomic processing of claims without necessitating additional LayerZero messaging. While users could claim ZRO from Ethereum, Optimism, Base, Polygon, BNB Chain, and Avalanche, these claims required LayerZero cross-chain messages.

Consequently, the median gas prices on Arbitrum surged from 0.01 gwei to 34.7 gwei, before normalizing as the activity waned. This spike in gas prices translated to average daily transaction fees on Arbitrum soaring to $0.89 on Thursday, from typically sub-cent levels, before reverting to their usual rates.

Current Token Metrics

LayerZero’s ZRO token is presently trading at $3.15, according to CoinGecko. It boasts 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.

The dramatic escalation in Arbitrum’s transaction fees underscores the significant impact of LayerZero’s airdrop, marking a notable milestone in the Layer 2 network’s financial performance.