ZORA Token Launch Confuses and Dissatisfies Users as the NFT Market Continues to Decline

Onchain social network Zora has built a reputation as a popular tool for artists, musicians and other creatives to monetize their content onchain

Onchain social network Zora has become a popular tool for artists, musicians and other creatives to monetize their content in new ways, but the recent launch of its eponymous ZORA token has seen it quickly become a point of contention among users.

The token’s price quickly tanked shortly after launch, with users and observers complaining about everything from poor communication from the team to the token’s distribution and utility models. This comes amid an overall decline in interest in the onchain creator economy and a changing perspective on whether blockchain tools like non-fungible tokens (NFTs) are still useful for creatives who want to monetize their work on the blockchain.

With creators and builders shifting focus and NFTs no longer selling like they used to, does the ZORA token drop symbolize the end of the creator-driven NFT model? Maybe not, but many creatives are changing their perspectives and the role blockchain should play in the creator economy.

ZORA token launch and airdrop go awry

The ZORA token launched on April 23, and it quickly became a point of controversy among users. To start, Zora did not officially announce that it had gone live until two hours after it was already trading, leading to confusion on social media.

The token’s price quickly fell by over 50% within those roughly two hours, from $0.037 to $0.017, adding to users’ complaints. It has since fallen even further, sitting around $0.013 at the time of writing.

ZORA’s tokenomics also became a point of contention. 45% of the supply is reserved for the team and investors, while 25% is for the treasury — leaving 20% for community incentives and just 10% for the user airdrop. This led some to complain that the project was keeping too much for itself.

“I’m not sure I like the hustle in this space. They’re taking 45% and treasury is 25%. It should be max 15% for the team and 15% for treasury. 20% for community incentives is good and 10% airdrop is fair enough,” one user wrote.

Another complained about the token’s lack of utility, adding, “It’s not going to be used for governance. So what’s the point?”

Zora repeatedly stated that the token “is for fun only and does not entitle its holders to any governance rights or a claim on any equity ownership in Zora or its products.” But the project seemed to respond to this criticism on May 1 by announcing that ZORA would have some additional functionalities within the network.

However, many others came to the defense of the project, saying that sharing on the platform has been financially lucrative. Others were simply thankful they received anything at all.

Singer Vérité, who has racked up hundreds of millions of streams as an early adopter of Web3 tech, told Cointelegraph that “on a base level, I’m appreciative of being rewarded for participating in something early.”

She said that while she doesn’t know the team very well, “I feel like they are genuinely trying to construct new models for valuing digital artifacts and have built an aesthetic and culture around their brand in juxtaposition to what are usually awful crypto vibes.”

NFTs no longer top of the creator food chain

Zora’s token launch was the latest move in a broader shift away from the traditional NFT model for creators, in this case toward embracing the cultural dominance of memecoins.

While posts on Zora used to be minted as NFTs, now each post creates an instantly tradeable memecoin, also known as a “content coin.” Creators are given 1% of the supply and earn 50% of the trading and liquidity provider fees.

While the move from NFTs to content coins was itself controversial, it represents a shift to a new class of creators, according to Adam Levy, host of the Mint podcast and founder of Blueprint, which helps creators go viral onchain. He told Cointelegraph that the wild success of memecoin launchpad Pump.fun “brought in a brand new class of creators that now Zora is trying to capitalize on.”

NFT sales remain way down compared to their 2021 peak, and many creators have simply left the NFT space due to its perceived shortcomings. Music-related NFTs, which used to be prevalent on platforms like Zora, have taken a particularly hard beating.

Several builders of the most popular creator platforms have moved on to work on other projects. For instance, the team behind music NFT platform Sound.xyz has shifted its focus to a new platform called Vault, which still uses blockchain technology but keeps it on the back end.

In a February X post, Sound co-founder David Greenstein said a hyperfocus on speculation led to the decline in NFT interest. “Over time, it became less about the artist, the music