Blast robbing the rich to help the poor, which L2s will bring benefits to retail investors in the future?

Author: BitPush Asher Zhang

Since the beginning of this year, the game between project parties and profit-seeking studios has been intense. Under the competition for interests, there are different voices regarding any airdrop rules. Recently, the Blast airdrop was distributed, and its airdrop strategy was recognized by retail investors but backstabbed by large holders. So, what are the characteristics of Blast's airdrop strategy? What other L2 projects should retail investors pay attention to in the future? It is worth noting that many leading Layer 2 projects have launched this year but have performed mediocrely. What are the reasons behind this?

Blast brings good news for retail investors but backstabs large holders

This year, several major projects like ZK and ZRO have caused profit-seeking studios to complain, and the mouse warehouse scandal and large-scale witch hunts have also been quite lively. However, this time, the Blast airdrop has essentially brought good news for retail investors and small profit-seeking studios.

The Blast airdrop strategy does not check for witch hunting and is largely dedicated to protecting retail investors' interests, which has earned it considerable market praise. At the end of June, Blast officially opened airdrop claims and announced its tokenomics, with a total supply of 100 billion BLAST tokens, 50% of which will be airdropped to the community, with the first phase airdrop accounting for 17% of the total supply. In the first phase of the Blast airdrop, Blast point holders can allocate 7 billion BLAST, gold point holders can allocate 7 billion BLAST, and the Blur Foundation can allocate 3 billion BLAST. Most importantly, the Blast airdrop does not check for witch hunting, which is indeed good news for studios, allowing them to recover a significant amount. According to community feedback, those who diligently complete dapp tasks or persistently participate can earn a minimum of several thousand gold points, with costs being less than one Ethereum, meaning that even with a small investment, the returns can at least double.

Although Blast does not check for witch hunting, it backstabs large holders. In the airdrop announcement, Blast specifically emphasized that large holder airdrops will vest linearly, meaning that the top 0.1% of users (about 1,000 wallets) will receive a portion of the airdrop linearly over six months. From the current market trend, Bitcoin's decline has dragged down the overall market, and BLAST is expected to face selling pressure from retail investors in the short term. For large holders, significant selling at this time is actually detrimental to themselves, as most of their tokens have not been released. Large-scale selling at this time undoubtedly harms their own interests. Blast's actions undoubtedly allow retail investors to run first, with large holders trailing behind, which has led to criticism from large holders.

The Blast official webpage shows that the top user is @beijingduck2023. They stated on Twitter that at the current price of $0.026, the BLAST they obtained in the first phase is only worth $1,664. Christian, co-founder of the crypto fund NDV, stated that he deposited over $50 million in Blast, receiving 20,912,000 BLAST, worth about $540,000, but due to linear unlocking, he can only claim $100,000 of the airdrop at present. Christian labeled Blast as a scam project and referred to its founder Pacman as a "serial rug entrepreneur."

Which L2 projects are still worth retail investors' attention?

Although recently launched L2 projects are implementing increasingly complex airdrop restrictions, many projects still prioritize protecting retail investors, allowing them to profit. So, which L2 projects are worth paying attention to after Blast?

Scroll

Scroll is the 8th largest L2 and the 3rd largest zkEVM L2, with significant improvements in transaction throughput, reduced fees, and overall scalability. Scroll's TVL is close to $1 billion, with a valuation of $1.8 billion in 2023, backed by well-known venture capital firms such as Polychain Capital, Bain Capital Crypto, and Sequoia China. In April 2024, Scroll announced its "Scroll Sessions" reward program, where users can earn Scroll Marks, equivalent to points, through these activities. Recently, Scroll concluded Session Zero, where users could earn rewards by bridging assets like ETH and wstETH using the native bridge or LayerZero. Session One is about to begin, which may support other assets and methods for earning points.

Zircuit

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

Reya and Zora

Reya Network is an upcoming L2 for trading optimization, supported by Framework, Coinbase, and Wintermute. Reya has announced a liquidity reward program where users can provide funds to liquidity pools through private accounts and earn 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 the Zora Network, a Layer 2 network based on OP Stack. With the launch of its own network, there may be a governance token airdrop in the future.

Why have Layer 2 tokens underperformed?

Although several leading Layer 2 tokens have launched this year, the performance of these project tokens post-launch has been unsatisfactory. Besides the high valuations of the projects, what other reasons contribute to the weak performance of Layer 2 tokens?

From a technical perspective, the top-tier projects in the L2 space have already launched this year. While we have listed some projects with relative technical potential, they only have advantages in certain technical areas. Currently, the key for Layer 2 projects lies in developing their ecosystems.

At present, Arbitrum may be the biggest winner of the Dencun upgrade, with the fastest growth in on-chain active users. This may be attributed to its full utilization of L3 advantages, making a strong push in the Web3 gaming sector, thereby attracting a large influx of users. Arbitrum's ecosystem partners include Azuki, ApeCoin, Xai, and XPET. Optimism is expanding its territory through Op Stack, with many Layer 2s built using Op Stack, including well-known ones like Base, opBNB, Zora Network, and DeBankChain. From the perspective of ecosystem development, the development of zk systems is relatively weaker compared to Op systems.

From the token perspective, leading Layer 2 tokens launched relatively late, with Starknet and zkSync having just recently issued tokens, and a large number of tokens will gradually unlock. Although Arbitrum and Optimism have made some progress in ecosystem construction, their ability to capture token value is still very lacking. This has led to the underperformance of most Layer 2 tokens. In addition to the reasons related to Ethereum Layer 2 tokens themselves, Bitcoin Layer 2 has also caused many funds to flee from Ethereum, which may explain why Starknet announced its entry into Bitcoin Layer 2.

Conclusion

From a technical perspective, the leading Layer 2s on Ethereum have all launched, indicating that their technology is maturing and can at least meet current on-chain demands; their next goal is primarily ecosystem development and continuous upgrades based on demand.

From the data perspective, many developers are increasingly seeking to build Layer 2 on Bitcoin, hoping to become a leading Bitcoin Layer 2. This move has both advantages and disadvantages. The technological development of Bitcoin Layer 2 is still in its early stages, presenting greater opportunities. However, the underlying technology of Bitcoin iterates slowly, with limited block space, and since Bitcoin itself does not have smart contracts, the interaction between Layer 1 and Layer 2 is inherently more challenging, and Bitcoin maximalists are also very opposed to this.

In the future, although Ethereum Layer 2 and Bitcoin Layer 2 may share many similarities, their positioning is expected to differ mainly due to the underlying differences between Bitcoin and Ethereum. Ethereum Layer 2 is likely to be more popular in areas like blockchain gaming or Web3 social, while Bitcoin Layer 2, if it can inherit Bitcoin's security well, may be more favored in DeFi and other sectors.