From Token to Team Who is the winner of Layer2?

I researched all the projects related to Ethereum Layer 2 solutions, both generalized L2 (Polygon) and application-specific L2 (dYdX), and picked my top five from these great projects.

1. Has income been generated?

Digging into Token Terminal, I found some very interesting statistics. In the last 180 days, the total revenue (expenses) earned was:

dYdX $212.2 million

Arbitrum $13.7 million

Polygon $8.8 million

Optimism $8.5 million

Loopring $2.5 million

As you can see in the chart, dYdX has an overwhelming advantage compared to other projects. Arbitrum is in second place, but as you can see, Polygon has been in the lead for the past month and is gaining momentum.

From Token to Team Who is the winner of Layer2?

From Token to Team Who is the winner of Layer2?

2. Allocation of treasury resources

The elements of this study are divided into:

Do they have different assets, or just their native token (more risk)

How big is the national treasury and how much development space does it bring to the project?

Polygon: It is difficult to find any information on the size and contents of the Polygon treasury. However, we know that $1 billion has been recently committed to developing the ZK project, and we can assume the total size of its treasury is much larger than that.

Optimism: 30% of the initial Token supply (1.29 billion OP) will be allocated to the Community Fund (Ecosystem Fund + RetroPGF) = ~$1.85 billion worth of OP Tokens (based on current price of $1.43).

dYdX: 5% of the initial token supply (50 million DYDX) is allocated to the community treasury. At today’s prices ($2.27), that’s about $113 million.

Loopring: 20% of the token supply (275 million LRC) is allocated to LEAF, worth about $110 million (based on the current price of $0.40).

3. Locked Funds

If the majority of tokens are still locked in the vesting schedule, this could create significant selling pressure in the future.

Polygon: About 92% of the supply has been unlocked. The final 800 million tokens will be unlocked by May 2025. Current liquidity supply = 9.18 million while total supply is 10 billion.

From Token to Team Who is the winner of Layer2?

Optimism: ~5% of the total supply has been unlocked through airdrops. The current circulating supply = 215 million, and the total supply is 4.29 billion.

From Token to Team Who is the winner of Layer2?

dYdX: ~11% of all supply has been unlocked. Current liquidity = 112 million, total supply is 1 billion.

From Token to Team Who is the winner of Layer2?

Loopring: About 90% of all supply has been unlocked. Current circulating supply = $1.245 billion, while total supply is $1.374 billion.

4. Role and case

Polygon: MATIC Token is used to pay transaction fees in the network. You can also stake your MATIC as a reward for securing the network.

Arbtirum: No token yet, but the network itself has enormous utility and offers cheaper transaction fees and scalability while maintaining the security of Ethereum.

Optimism: The right to block space is a sustainable revenue stream that drives the OP economic model and grows with the network itself.

dYdX: Essentially a governance token, holders also get discounts on transaction fees based on the size of their positions.

Loopring: Protocol fees are allocated to both liquidity providers, insurers and DAOs to incentivize good behavior of token holders.

5. Roadmap

Polygon just announced that they will implement the first EVM ZK L2. Sandeep also plans to achieve complete decentralization of the blockchain within 2-3 years, and develop some powerful products at the same time, including decentralized digital ID cards.

Arbitrum has yet to announce the full roadmap, but there is speculation that they will also release a native token via an airdrop at some point.

Optimism lays out its roadmap in the chart below.

From Token to Team Who is the winner of Layer2?

dYdX is planning to become a fully decentralized project with their V4 version by the end of 2022. This seems to be their main focus and will be a huge milestone for the project.

Loopring is planning some big upgrades in 2022, like Loopring Earn and zkEVM.

6. Section Category

The 5 items on this list are all very similar in nature. Polygon, Optimism, and Arbitrum are all vying for the same pie, competing to be the best L2 scaling solution.

At this stage, Polygon is clearly No. 1 from a market cap and “moat” perspective. However, the usage of Arbitrum and Optimism is higher and growing rapidly.

7. Team and funding

Polygon has a non-anonymous team (Anurag Arjun, Jayant Kanani, Mihailo Bjelic and Sandeep Nailwal) and is backed by some of the most prominent investors in the space (Alameda, Binance Labs, Coinbase Ventures) with a total funding of $451.5 million . They have also recently announced a series of partnerships (Disney, Reddit, Meta, Stripe, Draftkings) showing their strong business development capabilities.

Arbitrum also has a well-known team and strong backers (Pantera, Alameda, Mark Cuban, Coinbase). The parent company of Offchain Labs received a total of $123.7 million in investment.

Vitalik himself is a big fan of Optimism and has expressed support for their new governance structure. They are heavily backed by A16z, Paradigm and IDEO, with a combined $178.5 million in investment.

dYdX has raised $87 million in funding from some prominent investors, including Hashkey, Starkware, and A16z, whose team is also not anonymous.

Loopring has raised $45 million in funding from Kosmos ventures, G2H2, Neo, Fundamental Labs and Obsidian.

8. Summary

Based on my research and analysis, I rate each item on a 1-10 scale for each category. As you can see, the clear final winner is Polygon.

From Token to Team Who is the winner of Layer2?

The project is the most mature, has the largest market cap, and has indeed gained some traction recently due to the upcoming Ethereum merger. Other projects are also very promising and have great potential for success in the long run.

These are not buying recommendations for these items, it’s just my objective opinion and research I’ve done to learn more about L2. Please do your own research before you invest in any project.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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