What factors contributed to zkSync's drastic 39% price drop after the airdrop and what are analysts saying about zkSync's price prediction for the coming months?
On June 17, zkSync (ZK) tokens were distributed via airdrop, generating a lot of initial interest. However, blockchain analysis revealed that almost half of the major wallets that received the new zkSync token sold their entire allocation shortly after.
This large-scale sell-off caused a sharp 39% drop in the token's price, falling from its launch price of $0.3098 to a low of $0.1904 on June 18. As of June 19, the price has recovered slightly, trading around $0.2215.
So what exactly happened here? And how does this affect zkSync price predictions? Let's delve into the details to better understand the situation.
What exactly happened?
zkSync announced its long-awaited ZK token airdrop on June 11. This event aimed to distribute 17.5% of ZK's 21 billion token supply to 695,000 eligible wallets on June 17. Additionally, 33.3% of the tokens were reserved for the project team and investors, intended to be a reward for early adopters and long-time supporters.
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Initially, the announcement generated notable excitement within the crypto community. Eligible users were promised up to 100,000 ZK tokens, depending on criteria met before a snapshot taken on March 25.
However, shortly after the airdrop was launched, criticism began to mount. Many active and long-term users reported receiving fewer tokens than they believed they deserved, while less active wallets received higher allocations.
The situation was further aggravated when several high-ranking zkSync-based projects, such as the nft project zkApes, revealed that they had not received any airdrops despite generating colossal gas fees for the network.
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These projects formed a coalition to pressure the zkSync team for fairer token allocation, demanding transparency and fairness.
Despite criticism, the airdrop was launched on June 17 and what followed was a large-scale liquidation. Data from blockchain analytics firm ai/public/dashboards/uHhTXjQbXiR6OCB1BXlmOAujStIPCfJdPleAknZa?org_slug=default” target=”_blank” rel=””>Nansen showed that 41% of monitored addresses sold all of their zkSync airdrop, while 29.2% sold some of their tokens. This massive sell-off caused a sharp drop in the price of the token.
Critics argued that the criteria used for airdrops were inadequate to prevent Sybil attacks, where a single user manipulates multiple wallets to accumulate tokens and then dispose of them after listing on exchanges.
Despite these criticisms, zkSync defended its approach. They mentioned rewarding genuine participants while maintaining fairness and integrity.
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Controversy, public reaction and skepticism
The zkSync airdrop was intended to be a celebration, rewarding loyal users and early followers. However, the consequences were far from celebratory.
Mudit Gupta, chief information security officer (CISO) at Polygon (MATIC) Labs, was one of the first to voice his concerns. He pointed out the apparent lack of effective Sybil filtering, allowing people to exploit multiple wallets to maximize their airdrop rewards.
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Adam Cochran, partner at Cinneamhain Ventures, echoed these sentiments. He noted that the criteria for receiving the airdrop were easy for those manipulating the system to meet, but could be missed by genuine users due to the nascent stage of the zkSync ecosystem.
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The community reaction was also swift and loud. Anton ProfiT, a featured user, outlined the criteria for the airdrop, including smart contract interactions, transactions on Paymaster, and nft Omnibus holding. Despite meeting these criteria, many users were not eligible for the airdrop.
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ProfiT argued that the zkSync team must have made mistakes in the distribution process and asked for the opportunity to appeal. Their frustration resonated with many community members who felt unfairly excluded.
Other users shared similar experiences and expressed disappointment after working for zkSync for a year and finding their wallet ineligible.
Further complicating matters were accusations of favoritism. Nonzee, another user, claimed to have discovered that a zkSync developer was managing 47 wallets and receiving a substantial allocation of tokens through cross-wallet connections.
Nonzee's findings suggested that the developer exploited internal knowledge to maximize rewards, leaving regular users with minimal or no allocations.
Simply put, users are demanding clarity on why many eligible wallets were deemed ineligible and are asking for clarifications.
zkSync Price Prediction – How Will It Do in the Future?
At peak bull market conditions, a crypto analyst has placed zkSync's price prediction between $0.80 and $1.40. Under current market conditions, zkSync could achieve a similar fully diluted valuation (FDV) as existing L2s, suggesting a price range of around $0.40.
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In a more conservative scenario, zkSync could reach 2 to 3 times its private FDV valuation, ranging between $2.5 billion and $3.75 billion. This would potentially place zkSync's price forecast between $0.11 and $0.17.
Meanwhile, using available data and technical analysis, several algorithmic websites have outlined some potential price trajectories for zkSync in the coming years.
zkSync price prediction for 2024
Based on the analysis of CCN.com, zkSync price prediction for 2024 ranges from a low of $0.20 to a high of $0.50. The average expected price is around $0.48. Digital currency price offers a slightly higher estimate, suggesting that the zkSync cryptocurrency price prediction for 2024 is around $0.49.
zkSync price prediction for 2025
Looking ahead to 2025, CCN.com predicts a price low of $0.48, with a potential high of $0.59. The average price is expected to be approximately $0.58. Digitalcoinprice aligns with this vision and forecasts a price of $0.59 for zkSync in 2025.
zkSync price prediction for 2030
By 2030, zkSync price could see further increases. According to CCN.com, the ZK token can reach a maximum level of $1.69, with an average price of around $1.64. Even in a more conservative scenario, the price could be $1.53. Digitalcoinprice supports this long-term bullish outlook and predicts that the zkSync coin price prediction for 2030 will be $1.69.
Several factors will influence the future price of zkSync. The project's success in addressing current controversies such as airdrop issues and concerns over the Sybil attack will play a crucial role in impacting zkSync's price prediction.
It is worth noting that these predictions, while backed by data, should be taken with caution due to the inherent volatility of the crypto market. As always, you should do your own research and consider several factors before making investment decisions. Always remember: never invest more than you can afford to lose.
Frequent questions
Is zkSync a good investment?
zkSync has shown potential, but it is a risky investment. After the hype over the airdrop, many sold their tokens, causing a huge price drop. The future of the project depends on solving current problems and gaining the trust of users. You should consider this volatility and do extensive research before investing.
Will ZkSync go up or down?
Predicting zkSync price is challenging due to recent sell-offs and controversies. Some analysts predict a recovery, with potential prices ranging between $0.20 and $0.50 in 2024. However, uncertainty remains, making it essential to closely monitor market trends and project developments.
Should you invest in zkSync?
Investing in zkSync carries high risks and potential rewards. The recent price drop and controversy highlight the need to proceed with caution. If you believe in the long-term vision of the project and are comfortable with high volatility, it might be worth considering. Always do your own research and consider your risk tolerance before investing.
Disclosure: This article does not represent investment advice. The content and materials appearing on this page are for educational purposes only.
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