Zora faces backlash over token supply control and for fun label
Zora recently announced its intent to launch a ZORA token, but its plans have faced criticism after it was revealed that 65% of the tokens supply is allocated to the team, treasury, and early investors, despite the tokens official documentation describing it as for fun only.
According to Zoras publicly available supply breakdown, ZORA will launch with a total supply of 10 billion tokens on the Base network. Of that amount, 18.9% is allocated to the team, 20% to the company treasury, and 26.1% to early investors.
On April 21, X user Karbon questioned the decision to allocate 65% of a tokens supply to insiders if the tokens goal is to have no material utility. The documentation states that ZORA does not confer governance rights, equity ownership, or claims on revenue to holders.
Karbon raised concerns about the appropriateness of maintaining a treasury for a worthless token and questioned why contributors would seek compensation in a token explicitly labeled as non-valuable.
Blockchain investigator ZachXBT echoed the concerns, suggesting that if the token has no intended use, it should not exist. ZachXBT argued that issuing a token without a purpose damages industry credibility, especially for a company that reportedly raised over $60 million at a $600 million valuation.
A token for fun
Karbon further speculated that Zoras for fun characterization may be an attempt at legal risk mitigation or expectation management.
However, he asserted that such messaging signals to the market that the token is worthless, which he described as counterproductive at a time when the industry seeks to build legitimate tokenized products.
ZachXBT assessed that the narrative of a token created solely for fun only works through a fair launch, where the entire supply becomes tradable on the market simultaneously.
Kevin Mills, head of research at Triton, said that by creating a token without rights or revenue claims and assigning large allocations to the treasury and investors, Zora was allowing retail users to invest real money into an asset with no intrinsic value.
Mills criticized the structure as enabling pre-launch marketing efforts to drive price appreciation without delivering substantive utility to token holders.
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Text source: CryptoSlate
