Blast’s Boon for Retail: Upcoming Layer2 Projects for Small Investors

This year, the battle between project teams and farming studios has been fierce. Amidst the struggle for benefits, every airdrop rule has faced varying opinions. Recently, the Blast airdrop has received recognition from retail investors but has backstabbed large investors.

So, what are the characteristics of Blast’s airdrop strategy? What other L2 projects should retail investors keep an eye on in the future? It’s noteworthy that despite the launch of many leading Layer2 projects this year, their performance has been lackluster. What are the reasons behind this?

Blast Benefits Retail Investors, But Backstabs Large Investors

This year, major projects like ZK and ZRO have caused distress for farming studios, with incidents of frontrunning and large-scale Sybil attacks. However, the Blast airdrop has essentially been a boon for retail investors and small farming studios.

The Blast airdrop strategy does not check for Sybils, focusing largely on protecting the interests of retail investors, which has earned it much market praise. At the end of June, Blast officially opened its airdrop claims and announced its tokenomics. The total supply of BLAST is 100 billion, with 50% airdropped to the community, including 17% in the first phase.

In this phase, Blast score holders can receive 7 billion BLAST, Gold score holders can receive 7 billion BLAST, and the Blur Foundation can receive 3 billion BLAST. Most importantly, the Blast airdrop does not check for Sybils, which is great news for studios, helping them recover significantly.

According to community feedback, those who diligently completed dapp tasks or consistently engaged in activities could easily earn thousands of points, with costs less than one Ethereum. This means even small investments could yield double returns.

However, while Blast does not check for Sybils, it backstabbed large investors. In the airdrop announcement, Blast emphasized that the airdrop for large investors would be vested linearly. The top 0.1% of users (about 1,000 wallets) will have their airdrop vested linearly over six months.

Given the current market trends, with Bitcoin dragging down the overall market, BLAST is expected to face short-term selling pressure from retail investors. For large investors, massive selling at this time is actually disadvantageous, as most of their tokens have not been released, and selling now would harm their own interests. This move by Blast essentially lets retail investors cash out first, leaving large investors behind, which has drawn criticism from the latter.

According to Blast’s official website, the top user is @beijingduck2023, who tweeted that the BLAST he received in the first phase is worth only $1,664 at the current price of $0.026. Christian, co-founder of the crypto fund NDV, stated that he deposited over $50 million on Blast and received 20,912,000 BLAST, valued at around $540,000. However, due to the linear unlock, he can currently only claim $100,000 worth of the airdrop. Christian labeled Blast as a scam project and called its founder Pacman a “serial rug entrepreneur.”

What L2 Projects Should Retail Investors Look Out For?

Despite the increasingly complex airdrop restrictions for recent L2 projects, many still aim to protect retail investors, leaving room for profitable opportunities. So, what L2 projects should we pay attention to after Blast?

Scroll

Scroll is the 8th largest L2 and the 3rd largest zkEVM L2, offering significant improvements in transaction throughput, cost reduction, and overall scalability. Scroll’s TVL is close to $1 billion, with a valuation of $1.8 billion in 2023, backed by notable VCs such as Polychain Capital, Bain Capital Crypto, and Sequoia China.

In April 2024, Scroll announced its “Scroll Sessions” reward activities, where users can earn Scroll Marks (points) through various activities. Recently, Scroll concluded Session Zero, where users could earn rewards by bridging assets like ETH and wstETH through native or LayerZero bridges. Session One is about to begin and may support other assets and methods for earning points.

Zircuit

Zircuit is an upcoming zkEVM currently in the testnet phase, using AI to enhance the security of its sequencer, backed by investors like Dragonfly, Pantera, and Maelstrom. Zircuit has launched a points campaign where users can deposit assets like ETH, LST, and LRT into its network. Zircuit has already accumulated over $2.5 billion in staked assets and received over 1,000 applications for its “Build to Earn” program.

Reya and Zora

Reya Network is an upcoming L2 for optimized trading, supported by Framework, Coinbase, and Wintermute. Reya has announced a liquidity reward program where users can fund liquidity pools through private accounts, earning returns from trading spreads, funding fees, protocol fees, and liquidations.

ZORA is an NFT marketplace protocol where creators can create, showcase, and collect NFTs. ZORA has also launched its own Layer 2 network, Zora Network, based on OP Stack. With the launch of its network, there is potential for a future governance token airdrop.

Why Have Layer2 Tokens Underperformed?

Despite the launch of several leading Layer2 tokens this year, their performance has been underwhelming. Besides high project valuations, what other reasons explain the weak performance of Layer2 tokens?

From a technical perspective, the most groundbreaking projects in the L2 sector have already launched this year. While we have highlighted some projects with relative technical potential, they only offer relative advantages in specific areas. The key for current Layer2 projects lies in developing their ecosystems.

Arbitrum, for instance, might emerge as the biggest winner of the Dencun upgrade, with the fastest-growing on-chain active user base. This could be attributed to its full utilization of L3 advantages, aggressively targeting the Web3 gaming sector and attracting numerous users.

Arbitrum’s ecosystem partners include Azuki, ApeCoin, Xai, and XPET. Optimism is expanding through Op Stack, with many Layer2 projects built on Op Stack, such as Base, opBNB, Zora Network, and DeBankChain. From an ecosystem development perspective, the growth of Zk projects is relatively weaker compared to Op projects.

From a token perspective, the leading Layer2 tokens were launched relatively late, with Starknet and zkSync only recently issuing tokens. A significant amount of tokens will gradually unlock. While Arbitrum and Optimism have made some progress in ecosystem development, their tokens still lack strong value capture capabilities, contributing to the underperformance of most Layer2 tokens. Additionally, the emergence of Bitcoin Layer2 has led to capital outflows from Ethereum, which might explain why Starknet announced its foray into Bitcoin Layer2.

Conclusion

From a technical standpoint, the leading Ethereum Layer2 projects have already launched, indicating that their technology has matured, at least to meet current on-chain demands. Their next goal is primarily ecosystem development, with continuous upgrades based on demand.

From a data perspective, many developers are increasingly seeking to build Layer2 on Bitcoin, aiming to become the leading Bitcoin Layer2. This move has its pros and cons. The technological development of Bitcoin Layer2 is still in its early stages, presenting significant opportunities.

However, Bitcoin’s underlying technology evolves slowly, with limited block space and no native smart contracts, making Layer1 and Layer2 interactions inherently more challenging, compounded by Bitcoin maximalism opposition.

In the future, while Ethereum Layer2 and Bitcoin Layer2 may share similarities, their positioning is likely to differ due to the fundamental differences between Bitcoin and Ethereum. Ethereum Layer2 is expected to be more popular in fields like blockchain gaming or Web3 social interactions, whereas Bitcoin Layer2 might gain traction in DeFi if it can effectively inherit Bitcoin’s security features.