The Power of Airdrops 🪂
In 2020, Uniswap and Sushiswap launched one of the largest airdrops in Crypto, cementing their current prominence. When DeFi was booming, two of the most powerful DEXs recognized they were up against stiff competition from other DeFi protocols.
In order to compete with other protocols, Uniswap opted to airdrop 5.2 million UNI to all previous protocol users and Sushiswap decided to airdrop 2 million SUSHI to all previous protocol users, attracting more users and more liquidity to their protocols—increasing TVL. Those who held their tokens were true Diamond Handers 💎. The price of UNI increased by 1305% and SUSHI increased by 2244% over the course of six months 🚀.
Is it time for L2s to do the same? 👇
We expect L2s to ship their tokens in 2022-2023.
ZkSync is the only L2 that confirmed there will be a token. Arbitrium, Optimism and StarkWare did not confirm that there will be a token but regardless of that, we expect them to ship.
The token will act as incentive for growth and liquidity.
Bridging to become “potentially” eligible for an airdrop will cost between $100-$150 to deposit funds from L1 to L2 network and to transact with each protocol.
Disclaimer: Not financial nor investment advice. Any capital-related decisions you make is your full responsibility and only you are accountable for the results.
When L2 Tokens?
Arbitrium, Optimism, StarkWare and zkSync— The Future of Layer 2.
These notable L2s are token-less and have established themselves as front-runners in the L2 race. With Billions of Dollars in Total Value Locked and growing in popularity by the day. We anticipate they will launch tokens somewhere in the future in 2022-2023.
We believe that in order to compete with alternative L1s (Ethereum, BNB Chain, Terra, Solana, etc..), L2s will need to heavily rely on airdrops. The token will be the main source of attraction for each L2. No better marketing than price going up.
Why L2s need tokens?
The majority of these L2s have a functional ecosystem. New and existing dApps are migrating to Rollups, resulting in increased liquidity and TVL. A token is the missing piece that is required for full decentralization.
The token will act as an incentive for validators to secure the network through staking.
To decentralize, DAO governance tokens will be issued with the right to impose proposals and vote on them.
Incentive for fraud/validity proof generators—implies to both Optimistic and ZK Rollups.
Tokens will be granted to those that contribute to the ecosystem’s and community’s growth.
A Web3 Wallet that supports Ethereum mainnet such as MetaMask.
ETH deposited in your MetaMask, anywhere from $100-$150. Gas fees will cost around $50-$100 when bridging from L1 to L2 depending on gas fees on Ethereum throughout that day and the rest of the ETH is needed to transact on each protocol.
Notes: Airdrops are not guaranteed, therefore we’re approaching it as a low risk, high reward scenario. This is only worthwhile if the gas fees consumed make up less than 0.1% of portfolio. Estimate per bridge: $50-$100
It is important to make sure that you have extra ETH in your Web3 Wallet. For example if you had 0.012 ETH ($30) in your Web3 Wallet and you deposited 0.012 ETH from L1 to L2 then the transaction won’t go through because you need to cover some expenses in ETH for gas fees. So the right approach would be to deposit 0.0004 ETH ($10) and leave the other 0.008 ETH (20$) to pay for gas fees.
Go to https://bridge.arbitrum.io/
Deposit ETH from Ethereum mainnet to Arbitrium mainnet.
Once your deposit has been confirmed, add Arbitrium network to your Web3 Wallet by selecting add L2 network on the top right of the page.
Go to https://www.sushi.com/ , make sure you’re connected to the Arbitrium network and not Ethereum mainnet and then swap some ETH for another token of your choice.
Go to https://optimistic.etherscan.io/ and click add OP network on the bottom right of the page.
Go to https://www.optimism.io/. Make sure you’re connected to Ethereum network and deposit some ETH from L1 to L2.
Once your ETH deposit has been confirmed, head over to https://uniswap.org/ and make sure you switch to the Optimistic Ethereum network and swap some ETH for a token of your choice.
Go to https://wallet.zksync.io/
Deposit ETH from L1 to L2.
Once your deposit has been confirmed on the L2. Head over to https://trade.zigzag.exchange/?market=ETH-USDC&network=zksync and execute a trade.
Immutable X (for StarkWare airdrop)
Go to https://www.immutable.com/ and deposit ETH from L1 to L2.
Funds can take up to an hour to appear on Immutable X. Click Marketplace and buy whatever NFT you like (NFTs can take up to 30 mins to appear in your inventory).
dYdX (for StarkWare airdrop)
Go to https://dydx.exchange/ .
Connect your Web3 Wallet and deposit ETH from Ethereum mainnet to dYdX.
Once your ETH has been deposited to dYdX after 10 confirmations, execute a trade.
You need at least 0.01 ETH to be able to trade ETH, therefore you can deposit USDC instead and make sure you have enough ETH in your Web3 Wallet to pay for gas fees (dYdX is the most expensive, $20-$40 per deposit).
Layer 2s enable anyone to Pay less than a $1 for swapping tokens on Uniswap rather than paying $15 dollars on average when using Ethereum mainnet (assuming gas fees were low that day). Once L2 tokens are issued, users would just withdraw their funds back to the L2 network instead of bridging back over to Ethereum— saving more money because withdrawals back to Ethereum from L2 to L1 are costly. L2s will provide a unique and better user experience which will make Ethereum more accessible for everyone.
Layer 2s are one of the most urgently needed solutions in Crypto right now. L2s address critical challenges ranging from Ethereum scalability to trustless bridges and new scalable ecosystems that will adopt more Defi usage. Now that you’re all aware of “L2 solutions” and the most well-known L2s, we anticipate these L2s to be valued at $10 billion+ in Market Cap placing them among the top 30 Tokens, outperforming most other Crypto Assets once launched.
We hope you’ve enjoyed this series, and we’ll see you again soon to cover the “New Chains” once L2 tokens are released.