Introduction

Last week, ZigZag exchange airdropped its token to its loyal users on zkSync.

ZigZag Exchange has made available eligible addresses for some of the airdrops on their website, including the Trader Airdrop, Gitcoin Donator Airdrop, Atlendis LP Airdrop, and IDO Participant Airdrop.

1. Trader Airdrop - 300 $ZZ per eligible address, with additional bonuses for early adopters.
2. Gitcoin Donator Airdrop - 2 $ZZ for every USD donated (minimum of 3 USD).
3. Atlendis LP Airdrop - 500 $ZZ for depositors with a minimum of 5 USD.
4. IDO Participant Airdrop - 3 $ZZ for every $ZZ purchased with a minimum of 1 $ZZ.
5. MM Bot Airdrop - based on the number of trades.
6. Discord Member Airdrop - with different amounts based on member roles.
7. POAP Holder Airdrop - 300 $ZZ awarded per POAP holder.

ZigZag Exchange expects to have reached around 100,000 addresses, with a total of 35,000,000 $ZZ (35% of supply) airdropped. (source)

Some of the eligible users kept their tokens on zkSync, but some others bridged their $zz tokens to Ethereum for actions like Dex swapping, moving to another Ethereum wallet or transferring to exchanges.

In this dashboard. I am tracking the bridged $zz tokens and figuring out what users did with the them.

Findings

• A total of 6.76m $zz tokens have bridged to Ethereum until now (6th march), which means 19.3% of the total 34m airdropped tokens.

• A huge part of eligible wallets have preferred to keep their tokens in zkSync, as only 5.54% (5540 wallets among total of 100k eligible wallets) of the wallets have bridged their tokens to Ethereum. Personally I think there are 2 main reasons for the reason for this high percentage of royalty:

  1. As zkSync has not released its own native token yet, users are keeping an eye on future rewards and prefer to increase their chance by increasing their activity on zkSync instead of Ethereum, so they prefer to make their $zz related transactions on ZigZag.

  2. ZigZag’s founder spoked about the team's plan to list $zz token on more exchanges on his recent tweet. (According to Coinmarketcap on

     exchanges have listed $zz for now), so users are waiting for more opportunities.

     \

How much of the airdrop supply is bridged to Ethereum? How many users have bridged their tokens?

$zz bridging activity during airdrop disturbition period vs other days

Findings

• All cases (average number of bridges, volume of bridges, number of unique bridger wallets, etc.) show during the airdrop distribution period (28th Feb ~ 3rd March), users boosted their $zz bridging activity by 100x or more compared to the rest of the most recent 10 days.

• The highest activity on $zz bridges to Ethereum in recent 10 days was on 1st March, the second day of the distribution period. (almost 3000 bridges and 2.37m $zz transfers, equal to $741)

• As we saw in introductions, the airdrop distributed based on multiple groups of eligible wallets (like Gitcoin donators, IDO participants, traders, …), on the 1st March the traders airdrop distributed, which was the largest group of airdrop by eligible wallets and also the size of allocated tokens (I know this as I myself was included in this group too!) , so it's not surprising to see spikes in bridge transfers and volume on this date since many users want to take advantage of airdrops!

• Looks like the high volume of bridges had 2 negative effects on $zz:

  1. The main one is a big dump of the token's price.
  2. Damaging the DEXs price peg with average price (obtained from Coingecko, which is a combination of centralized and decentralized exchanges prices) during the disruption of the airdrop! It may be due to the low liquidity of $zz on DEX pools. As a result of that, the dump was higher than the dumps on centralized exchanges, because the DEXs were unable to handle the sells pressure.

Findings

• 51.7% of the $zz bridges to Ethereum are done in order to send tokens to centralized exchanges and possibly to take profits from the airdrop, and only 5.6% of the bridged $zz tokens are being swapped in the Dexs, As we see in the previous part, Centralized exchanges offered better prices for $zz to trade during the distribution period (28th Feb ~ 3rd March), so that can be why the users prefer to trade their tokens in exchanges instead of Dexs, also people have to spend more fees when they trade on Ethereum so it’s reasonable many of them try to trade their $zz tokens on exchanges to avoid paying high amount of fees!

• Two main assets are being swapped with airdropped $zz tokens, USDC and WETH, and as we see USDC has 71.7% share of the swaps here. This tells us users mainly prefer to swap their airdropped tokens for a stable coin, as their profits will be ensured by this action.

Where are $zz tokens going after bridging?!

$zz airdrop impacts on zkSync <=> Ethereum bridges

Findings

• The $zz airdrop distribution period was the only time when the number of zkSync to Ethereum transfers was higher than the number of. Ethereum to zkSync transfers. If we look at the share of $zz tokens share in volume and number of bridges, we see the big role of $zz airdrop in this increase.
• During the distribution period (28th Feb ~ 3rd March), users have transferred assets from zkSync to Ethereum 1500 times more than in the previous 10 days, and the bulk of these transfers were made for the purpose of taking advantage of the $zz airdrop.

Methodology

These are the main topics I want to track on this dashboard:

A: How much of the airdrop supply is bridged to Ethereum? How many users have bridged their tokens?

• For finding the airdrop supply and the number of eligible wallets I used ZigZag founder’s statistics given on his tweet after the compellation of the airdrop.
• B: $zz bridging activity during airdrop disturbition period vs other days:
• My timeframes for answering this question is recent 10 days (from 24th Feb to 6th March) and I separated my timeframe to 2 different parts:

During the airdrop distribution period: 28th Feb ~ 3rd March (The airdrop have several tiers and was sent to eligible wallets in 4 diffrent days to lower the sale pressure

The rest of recent 10 days

C: What did the users do with their token after bridging to Ethereum?

D: $zz airdrop impacts on zkSync <=> Ethereum bridges

Note: For finding the zkSync <=> Ethereum bridge transactions I used zkSync contract address on my codes: '0xabea9132b05a70803a4e85094fd0e1800777fbef'

Conclusion

• Less than 20% of $zz airdrop supply is transferred to Ethereum by 5.5% of the eligible wallets, in fact A high number of ZigZag users preferred to keep their tokens keep their tokens in zkSync instead of bridging to Ethereum, I think zkSync potential reward and also the ZigZag founders tweets was a good motivation on for this high percentage of royalty.

• The Traders airdrop was the largest group of airdrops in terms of eligible wallets and token size, and because it was distributed on March 1st, this date was the busiest day for $zz transfers to Ethereum.

• During the airdrop days, the high volume of bridges to Ethereum had two negative effects on $zz:

  The main one is a large drop in the token's price, which is causing damage to the DEXs' price peg with the average price obtained from CoinGecko. This could be due to the low liquidity of $zz on DEX pools. As a result, because the DEXs were unable to handle the sells pressure, the dump was higher than on centralized exchanges.

• Dex swaps were not the preferred method for users to profit from the airdrop; instead, they primarily transferred their tokens to centralized exchanges where they could find better trading prices.

• USDC has 71.7% of the swaps with $zz by airdrop eligible wallets, indicating that users prefer to swap their airdropped tokens for a stable coin, as this action ensures their profits.

• The only times when the number of zkSync to Ethereum transfers exceeded the number of was during the $zz airdrop distribution period. Transfers from Ethereum to zkSync. When we look at the share of $zz tokens in volume and number of bridges, we can see that the $zz airdrop played a significant role in this increase.

Sources

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