Dear Frens,

Welcome to this week's L2 Review, where we dive into the latest advancements in the Layer 2 landscape. The recent ZK airdrop has infused significant capital into the ZKsync ecosystem, generating waves of excitement. ZKsync Era, Ethereum's prominent ZK Rollup Layer 2 solution, distributed its governance token, ZK, which is now available on leading exchanges. Despite recent uproar over its airdrop, excitement is mounting for its emergence, which is poised to challenge the top 50 cryptocurrencies.

Base, which created its genesis block a year ago, has since amassed more activity than nearly every other Ethereum Layer 2 network. Also, the Arbitrum Foundation's DAO has made a pioneering decision, dedicating 225M ARB tokens to fuel growth in their gaming ecosystem with the Gaming Catalyst Program (GCP), set to revolutionize gaming.

Evidently, the Layer 2 momentum is stronger than ever. The strides made in technology and community engagement continue to shape a more scalable and decentralized future. Stay tuned for more mind-blowing updates.

Contributors: Ritaakubue, Melasin, anointingthompson1, jengajojo, Tonytad, Boluwatife, Kornekt, WinVerse

This is an official newsletter of BanklessDAO. Please subscribe and share to help us grow our audience as we fulfill our mission to build user-friendly crypto onramps.

Share

🗞️ Ecosystem Updates

⛓️ Introduction of Optimism Fault Proofs and Stage 1

🔥 Introducing the Superchain Identity

⚡ XterETH Chain is Live on the Superchain

🌐 Allora network to provide AI Solutions Across ZKsync Ecosystem.

✅ The Matter Labs ZK Pledge

🔗 SkaleNetwork Ranks Second Among top Layer 2 Blockchain Networks with the Most Transactions

🪙 Blast Gold Distribution 5 is now Live

🔥 Hot News

OP Mainnet has Achieved Stage 1!

Optimism Mainnet has taken a significant step towards complete decentralization in new developments, reaching Stage 1 of its decentralization roadmap. Following the latest update to its architecture, Optimism has introduced fraud proofs, allowing anyone to propose and challenge state roots on Ethereum.

Introducing forced L1->L2 transactions means that users can now permissionlessly exit the Optimism network without relying on centralized operators. This marks an upward shift and further ignites the hope of achieving true decentralization.

The Optimism community and developers eagerly anticipate Stage 2 of the decentralization journey, which promises even greater levels of trustlessness and decentralization.

As word spreads about Optimism Mainnet's progress, the excitement in the blockchain and DeFi ecosystem grows. This development demonstrates the unwavering quest for fully decentralized and resilient networks, paving the door for a more secure and transparent future for blockchain technology. Find out more below!

🏛 Governance

💬 Proposals in Discussion

Arbitrum

• Adjusting Arbitrum’s Gas Fees

• Request for Proposal - The ADPC Security Services Panel and Procurement Framework

Optimism

• V2. Code of Conduct Council Operating budget re-scope for season 6. (cycle 23b)

Polygon

• PIP 38 - Phased expansion of Validator Slots on Polygon PoS

Layer 2 Airdrop Revolution?

Author: Lucent

Earlier this month, Matter Labs announced one of the largest airdrop campaigns in Layer 2 history. The ZKsync airdrop distributed 17.5% of the total 21 billion ZK tokens to eligible participants. Valued at over $2.5 billion, the airdrop primarily rewarded active users and contributors within the ZKsync ecosystem.

The airdrop aimed to recognize early adopters and promote community engagement. It ensured fair distribution by capping individual addresses at 100,000 tokens, marking a significant moment in the blockchain and decentralized technology space. This approach empowered the community to shape the future of the ZKsync ecosystem.

Of the 3.675 billion ZK tokens airdropped, 89% were allocated to eligible ZKsync users, while the remaining 11% went to other contributors. This made it the largest Layer 2 airdrop in terms of distribution. Unlike previous airdrops, where the core team typically receives a large portion or an even split, ZKsync's model promotes broader participation and decentralized governance.

Eligibility was based on seven factors, each carrying one point. Criteria ranged from having carried out transactions on ZKsync Era or Lite chains to participating in other onchain activities on the network. Eligible users were to start claiming from June 17, 2024 until January 3, 2025, while contributors will be able to claim their tokens from June 24, 2024. Addresses with fewer than 450 ZK tokens had their tokens recycled back into the pool, while those with over 100,000 tokens had the excess recycled. This further ensured a fair distribution.

Security Obscurity

Despite the measures put in place to ensure an equitable distribution, the crypto community criticized the ZKsync airdrop for its perceived lack of effective Sybil protection, which potentially allowed abuse by "farmers" using multiple wallets to game the distribution.

Mudit Gupta, the information security chief of rival Layer 2 network Polygon, criticized the airdrop as "most farmable and farmed airdrop ever probably" with "almost no Sybil filtering." He claimed the eligibility criteria were easy for "farmers" to meet but difficult for real users.

Another crypto investor, Adam Cochran, said the eligibility criteria were "easy to not hit as a real user, and easy to hit as a farmer, and had no anti-Sybil program." A Sybil-tracking account estimated that 135 million ZK tokens, worth up to $52.3 million, could be headed for Sybil wallets based on data from LayerZero Labs.

Market Reactions

The token premarket launch price dropped around 43% after ZKsync released details of the airdrop, suggesting a negative market reaction. The negative reaction was likely confirmed when the market price at the time the airdrop went live was around $0.3, and as of writing, the market price was $0.2215 according to CoinMarketCap.

As expected, the airdrop sparked significant reactions due to the massive hype surrounding it. Some believe the low market price might be attributed to the broad allocation of ZK tokens within the community, rather than being concentrated in the hands of a few individuals.

In comparison, the Arbitrum airdrop distributed about 1.1 billion ARB tokens out of a total supply of 10 billion. Starknet's airdrop distributed over 700 million STRK tokens, with 50.1% managed by the Starknet Foundation for developer rewards, ecological project incentives, community spending, and reserves.

Optimism Despite the Criticism

In response to the community reaction, crypto exchanges like Binance and KuCoin have listed the ZK token and are running their own token distribution programs to alleviate concerns. Binance is giving away 10.5 million ZK tokens to eligible users.

Further analysis will be needed as events surrounding the airdrop unfold. However, one thing is certain: the ZKsync ecosystem prioritized community. Their human-first approach may have caused some issues but there is no doubt that the ZKsync team believes that community is the backbone of this ecosystem. This is why it might be important to watch out for some projects like SyncSwap, Maverick, and Symbiosis on the ZKsync network.

📈 Data

Total Value Locked on L2s Approaches $50 billion!

Top Ten Projects by Total Value Locked:

🔭 Project Watch

Arbitrum

Top Projects by TVL

Optimism

Top Projects by TVL

ZKsync

Top Projects by TVL

zkEVM

Top Projects by TVL