Interoperability giant LayerZero has experienced a significant drop in the value of its native token, ZRO, which plummeted by 14%, making it the top loser in the crypto market today.
At the time of writing, ZRO is trading at $2.68, representing a 13% decline over the past 24 hours, according to CoinMarketCap. During this period, the token’s trading volume fell by 41% to $146 million.
Additionally, the market capitalization of LayerZero’s crypto assets dipped below $700 million, now standing at $670.8 million.
LayerZero is a fully connected mesh network that enables smart contracts deployed across several blockchains to interact with one another. The technology, known as cross-chain interoperability, is seen as a significant solution for bridging value across isolated decentralized networks.
The latest plunge in ZRO price ZRO’s price coincides with a widespread sell-off in the crypto industry, with many tokens experiencing double-digit losses.
Bitcoin, for instance, dropped below the critical support level of $63,000, while the overall market cap of all tokens fell by 3.5% in the last 24 hours to $2.27 trillion.
The price drop also follows user dissatisfaction with LayerZero’s proof-of-donation mechanism during its airdrop. Claimants of the airdrop were required to donate $0.1 to the Protocol Guild to receive their tokens, an unconventional approach that met with criticism.
Additionally, some users reported not receiving their token allocations, causing further dissatisfaction. In response, the developers launched a platform for users to appeal and correct their allocations.
Furthermore, the fall comes as some ZRO recipients liquidated their positions. Recently, many zkSync airdrop recipients similarly dumped their tokens following the distribution.
The broader market context has also contributed to ZRO’s decline, with all top 100 cryptocurrencies in the red over the past 24 hours.
Leading decliners include ENS (-10%), WIF (-13%), JASMY (-10%), and FLOKI (-10.7%), among others experiencing losses between 5% and 10%.
The Fear and Greed Index has shifted to the neutral zone, currently standing at 51.
The future trajectory of LayerZero’s price will largely depend on the overall performance of the crypto market in the coming weeks. If Bitcoin continues its bearish trend and falls below $56,527, its lowest point in May, ZRO is likely to continue its downward trend.
Altcoins often closely follow Bitcoin’s movements, surging to multi-year or all-time highs when Bitcoin reaches new records and retreating as Bitcoin loses momentum.