Author: Stacy Muur Source: substack Translation: Shan Ouba, Jinse Finance
Since 2023, new Ethereum Layer 2 solutions have continued to emerge, with L2Beat currently tracking data for 74 L2s and 30 L3s. However, only a few general-purpose rollups have gained mainstream attention, attracting a large amount of total locked value (TVL) and users.
These rollups are the focus of my new research.
Growth Catalysts
For many Ethereum L2s (such as ZKsync, Starknet, and Blast), airdrops have been the primary means of acquiring users.
Today, you’ll discover how they really performed after their airdrops and compare them to other examples: chains that launched their tokens a long time ago (like Arbitrum and Optimism), chains that have had tokens since day one (like Scroll and Linea), and other chains that haven’t launched their tokens yet.
There are currently three active airdrop campaigns:
Scroll: "Scroll Sessions" and "Scroll Canvas"
Linea: “Linea Park” and “LXP Last Rush”
Mantle: Metamorphosis of Upcoming Governance Token COOK for mETH (LST) and cmETH (LRT)
Ongoing airdrop campaigns will increase user activity, so please note that the data for Scroll, Linea, and Mantle may not be completely objective. User activity may decrease after these campaigns are over.
Indicator comparison
The publication will contain a lot of visuals, as they are the best way to compare Ethereum L2 and illustrate its current state and progress.
Market capitalization: circulating market capitalization and fully diluted market capitalization
Currently, most L2s have fully diluted valuations (FDV) in the billions of dollars, but a circulating market cap of less than $1 billion, indicating that a large portion of their tokens are still not in circulation. Mantle is an exception , with 52% of its supply unlocked, making it the only L2 with a circulating market cap of more than $1 billion.
This high FDV and low float standard is a key reason why many recent airdrops have failed to meet user expectations. Assessing the adequacy of current valuations is challenging, and it is uncertain whether there is much downside potential in the future.
Total locked value
In terms of TVL, all blockchains except for those that are implementing incentive programs, such as Scroll , Linea , and Mantle, have had a difficult summer. However, Linea’s airdrop program, which has lasted for nearly a year, has attracted less attention from the community compared to newly announced programs such as Scroll.
ZKsync and Blast were the most affected as both chains launched their own tokens this year, causing liquidity to migrate to more profitable locations.
Fees and Trading Activity
After Dencun, DA is no longer an important value driver for the ETH economy, affecting not only Ethereum fees, but also fees generated by L2.
Fee dynamics should be evaluated alongside transaction volume as they are always correlated. Dencun’s impact on fees could obscure the true picture of user activity.
Driven by speculation, Base , known as the primary destination for new memecoin launches on Ethereum L2, is showing strong traction and continued transaction growth.
In contrast, ZKsync and, surprisingly, Linea are in trouble, despite Linea’s ongoing incentive program.
Monthly Active Users
Monthly active users (MAU), a key metric for evaluating chain retention, also showed a similar trend. Mantle and Base performed best, while Starknet , ZKsync , and Blast lagged behind.
When comparing the MAU data to FDV, it is clear that Starknet is severely overvalued compared to Arbitrum, Optimism, and even ZKsync.
Bridging inflows and outflows
Net bridge flow is an important indicator for evaluating new user and capital inflows.
In L2, the ones with positive net flows (more inflows than outflows) include Arbitrum , Starknet , Optimism , Base , and Mantle , among which Mantle has the largest difference between outflows and inflows.
In contrast, Linea , ZKsync , and Blast exhibited negative net flows.
Developer Activities
Finally, developer activity is measured by the number of core developments and code commits. This data helps assess the current productivity of the team and detect any ongoing staff reductions.
The most surprising case here is Blast , which now has over 300 core developers (whereas most L2s typically have only 30-50). This large team also commits a large number of code.
What are they doing there? Who knows.
summary
Mantle
Judging from the bridge net traffic and MAU data, Mantle's ongoing Metamorphosis campaign is quite successful. Although some indicators have declined in August, this has more to do with the decline of the overall crypto market than Mantle's retention issues.
Base
Base launched the Onchain Summer II event on June 3, which will last until August 31.
During this period, market cap increased by $100 million, while bridge outflows increased by $87.7 million. Additionally, the number of transactions on the network surged by 2 million from May to August, and the number of daily users grew by 474.71K. While the activity attracted attention from users, it did not significantly affect inflows or revenues to the protocol.
Blast
The developers released the airdrop on June 26, 2024. As the entire market fell, the protocol’s metrics began to trend downward after the initial hype :
From May to August, TVL dropped by $1.49 billion. Users may withdraw their locked reward funds after receiving the airdrop. The increase of $26.7 million in outflows through the bridge in three months supports this view.
From July to August, the number of transactions decreased by 128.9K and the DAU decreased by 21.93K.
Revenue and expenses from the agreement decreased by $2.57 million in the three-month period.
After the airdrop, user activity dropped significantly, and overall market conditions further suppressed user engagement.
Scroll
On April 17, 2024, the developers announced the launch of Scroll Sessions . Since then, the stablecoin’s market capitalization has increased by $7.78 million, and its TVL from May to August has increased by $565.4 million. Although the indicator has fallen by $43.8 million in a month, it is still significantly higher than the level in May.
In three months, the number of transactions in the network decreased by 129K. As a result, TVL and stablecoin capitalization grew, while the number of transactions did not increase (the "deposit and forget" strategy of airdrop mining). It is worth noting that the project's MAU indicator dropped significantly by 399K in the same period.
Linea
On July 1, 2024, Linea developers launched another campaign, Linea Culture SZN . This triggered a wave of backlash on social media, as users had believed that Linea Park would be the last game. After the announcement, they felt deceived.
This can result in a drop in several protocol metrics:
The market capitalization of stablecoins fell by $47.7 million in three months.
Between May and August, TVL dropped significantly by $144.67 million.
Fees and contractual income decreased by approximately 2.8 times per month, and by 5-6 times within 3 months.
There has been a significant decrease in outflows and inflows of funds through the bridge, as well as a significant decrease in the number of daily transactions - 333.7K less per month and 714.4K less in 3 months.
Daily active users (DAU) also dropped significantly since May, by 324.5K.
It can be assumed that the campaign failed to attract user attention , especially in the context of the overall market decline.
Starknet
Starknet’s metrics have dropped significantly, and it has lost popularity among users since its February drop.
TVL fell by $58.9 million in three months and by $40.2 million in one month alone. The number of deals fell sharply from July to August.
Final Thoughts
If I were to sort L2 based on belief, the list would be:
Arbitrum: controls 40% of L2 TVL, has a large number of active users, the number of MAUs is almost the same as Ethereum, and has strong DeFi functions.
Mantle: has the second largest treasury in Web3, has good user retention, has the highest proportion of tokens in circulation in L2, and its upcoming COOK derivatives and native DeFi products such as mETH are gaining attention.
Optimism: Has OP Superchain arguments, but user activity is down compared to Arbitrum, despite comparable FDV.
Base: Shows high transaction activity, is primarily associated with memecoins, and tends to have a short lifespan.
Linea: Displays average metrics for ongoing airdrop campaigns. Although the initial excitement has faded, Consensys may have something noteworthy.
ZKSync and Scroll : ZKSync has good technical and developer activity, although poor airdrop execution has led to reduced user activity. Scroll has seen a large influx of users into the airdrop, but its long-term sustainability is questionable.
Blast and Starknet : No comment needed; the data speaks for itself.
