What is the reasonable price for LayerZero (ZRO) that is about to be launched?

Original author: Axel Bitblaze

Original translation: Alex Liu, Foresight News

Let’s talk about what you care most about now. What price will ZRO enter the market, and how much will your ZRO airdrop allocation be worth? Here’s my opinion on LayerZero airdrop distribution, price prediction, and listing trading plan.

Airdrop Distribution

I agree with most of the criticism, that the airdrop model is not well executed. Many people worked hard for a whole year to get 200-300 tokens. In my opinion, they (LayerZero) should allocate another 1-2% to the core distribution (the distribution obtained using the LayerZero underlying protocol, as opposed to the RFP distribution obtained using the LayerZero upper-layer application), and things will get better. However, our core distribution may still increase, as not all witches have been removed, and these shares will be redistributed to people. Considering the number of witches captured by LayerZero, the core distribution may increase significantly.

LayerZero CEO said that the witch has not been completely removed and will reclaim this portion of the token distribution

Price Prediction

First, to predict the price of ZRO at launch, we need to find the following data: expected Fully Diluted Valuation (FDV) and total token supply. Then, the price at ZRO launch can be calculated as: FDV / total supply.

Total Supply

Confirmed by Bryan, CEO of LayerZero, the total token supply is 1 billion.

LayerZero CEO confirms the total token amount is 10 billion

FDV

How to estimate FDV? When estimating the FDV at the time of listing, my usual method is to look at the FDV of recent projects with similar financing and competitors. For this, I will consider the situation when STRK and W were listed.

In fact, the FDV at the time of listing also depends to a large extent on the funds raised by the project and the valuation at the time of fundraising. In my ZK price prediction thread, I made a mistake by not considering its valuation at the time of financing, because it was not disclosed, and I summarized how it affects my calculations in an article.

So, why STRK and W? Predicting prices requires consideration of the FDV, financing amount, and valuation at the time of the recent project launch. The valuations of these two tokens at the time of financing are public, which is why I want to compare STRK and W to help us predict the FDV of ZRO.

Compared with recent projects:

STRK:

• Raised: $28.2 million
• Valuation: $8 billion
• FDV listed: $28 billion

W：

• Raised: 2.25 billion dollars
• Valuation: $25 billion
• FDV Online: $17 billion

ZRO：

• Raised: $26.3 million
• Valuation: 30 billion US dollars
• Online FDV: Let’s explore it

From the above, it is clear to see:

• The FDV of STRK is 3.5 times its valuation.
• The issuance price of W is 6.5 times its valuation.

Given how bad the market conditions are, I think it’s reasonable to expect ZRO’s valuation to be at least 2-3 times the $3 billion valuation, meaning an FDV of $6 billion to $9 billion.

Price? FDV/ Total supply. ZRO total supply: 1 B. So $ZRO:

• $ 6 B FDV = $ 6
• $ 7 B FDV = $ 7
• $ 8 B FDV = $ 8
• $ 9 B FDV = $ 9

My Plan

I believe LayerZero will definitely continue to exist. Unlike L1 and L2 chains that need to actively attract people to participate, LayerZero is more like an infrastructure project that almost all existing and upcoming projects will use as a cross-chain layer.

This means that even if users are not consciously using LayerZero technology, they will still come into contact with it because it has been integrated into many projects. It is different from L1 and L2, where you have to convince people to really use your chain. Hopefully this makes sense, haha.

My target FDV and target price:

• $ 5 B FDV or less: I will buy more

• I will consider taking profit at around $8 B FDV

• I will completely sell between $15 billion to $20 billion FDV.

• $ 5 or less: Buy in

• Get partial profits at $8

• Completely sell between $15 and $20