Zora’s much-hyped ZORA token launch was meant to be a celebration — a “fun” moment for its community, and a supposed triumph for the tokenization of content creators everywhere, with strong demand expected for the Coinbase Ventures-backed token.
Instead, it has turned into a familiar post-airdrop slog so far: A quick pop in price, followed by a slow bleed.
The token, issued late Wednesday, is down more than 50% from a price spike following launch, continuing a grim pattern that has become all too common for tokens pushed by venture-backed projects.
“Sold my $ZORA, thanks for playin,” wrote one trader, Faycytw, on X, summarizing the sentiment. They humorously posted images of deleting the Zora network and blocking its X profile – a jibe at users exiting most platforms after receiving token rewards.
Zora’s pitch is that it’s a factory for tokenizing anything — tweets, memes, videos. Its sudden virality this week led to expectations of a game-changing token. Instead, ZORA came with no utility, no governance, and no roadmap beyond the phrase “a token for fun.”
What it did have was on-chain liquidity (over $1.7 million) and listings on prominent exchanges, such as Binance Alpha, on the first day.
Allocations were calculated based on a user’s activity on Zora, including but not limited to coining, minting, trading and referring. Last week, market watchers also perceived the rampant promotions and backing by senior Base network team members as contentious.
Down, but out?
Zora’s early price action makes it join the graveyard of tokens swiftly abandoned by fresh recipients, who felt they were being used as exit liquidity for better-connected insiders.
“Traders have grown weary of holding altcoins as numerous high-profile and VC-backed projects try to attract new buyers by launching on exchanges with low liquidity,” Nick Ruck, director at LVRG Research, said in a Telegram message.
“Market makers would pump prices after the listing, but the token price would later decline as vesting schedules created more selling pressure.”
“n most cases, token use cases could not offset the selling pressure, as utilities were often limited to governance, discounts, subscriptions, or other low-buying-pressure services,” Ruck added.
The pattern is what industry people call the “low float, high FDV” trap — where tokens are launched with sky-high fully diluted valuations but only a sliver of supply available for trading. Another qualm is transparency, where a sizable amount may be held by team members directly or indirectly.
“The $ZORA launch highlights a recurring issue in Web3: overpromising and underdelivering,” said Min Jung, a research analyst at Presto. “When a project markets itself as community-first but fails to communicate transparently — especially around something as sensitive as a token drop — it quickly erodes trust.”
“Labeling the token ‘for fun’ with no utility only deepened the confusion and frustration,” Jung added.
Online, some watchers indicate the sell-off is reflective of cautious market sentiment. ‘The fact that $zora is at $50m mcap on day 1 means we’ve made good progress,” well-followed trader CryptoKoryo said on X. “One year ago a VC funded project like that could have launched at maybe $500m, shilled by a big actor like Coinbase, when sentiment was bullish and prices going up.”
Despite the backlash, Zora still holds significant clout in the creator crypto space. Its NFT minting protocol has seen solid adoption in the past week, metrics show, and both digital artists and brands have favored its platform.
That’s not to say ZORA prices may not pick up in the coming days or weeks, especially as it trades around the 2-cent level as of Thursday morning at a relatively small $73 million market capitalization.
Risk-takers could see short-term upside as the initial sell-off settles, and current valuations of a token linked to Coinbase and Base seem attractive.
However, the no-utility nature of ZORA is reminiscent of lessons from the past: Tokens without substance rarely hold their shine for long.