From Airdrops to Ecosystems: How Ethereum L2 Networks Can Retain Customers

Ethereum Layer 2 (L2) networks have emerged as important options to blockchain scalability points. As these networks compete for market share, incentive packages—primarily airdrops and grants—have develop into central to development methods. Whereas the assets allotted are immense, their effectiveness stays beneath scrutiny.

The Scope of Analysis

This evaluation focuses on two major incentive mechanisms: airdrops and grants. Utility-specific incentives, reminiscent of liquidity mining, are excluded to make sure a transparent give attention to L2 ecosystems. The information spans from 2021 to December 2024, with the first metrics being:

1. Month-to-month Lively Customers (MAU): Reflecting sustainable person development.
2. Income Technology: Evaluating the return on funding for incentive packages.

Key Observations

1. Incentives’ Impression on Month-to-month Lively Customers

A evaluation of the MAU developments throughout main L2 options reveals important disparities:

• Base demonstrated constant development, with a mean MAU enhance of 56% per 30 days, considerably outpacing different L2 networks.
• Arbitrum and Optimism confirmed slight will increase post-airdrop, aided by grants.
• Newer L2s reminiscent of zkSync Period and Starknet skilled sharp drops in MAU post-airdrop.

Key Insights:

1. The proliferation of latest L2 options dilutes person exercise throughout networks. As an example, zkSync Period’s MAU dropped by 32% inside three months of its airdrop.
2. Ecosystems with strong grant packages—like Arbitrum and Optimism—retain customers higher, sustaining MAUs at 300,000+ during the last quarter.
3. Cultural elements, as seen with Base, play a pivotal position in sustaining engagement with out token incentives.

2. Income vs. Incentive Prices

Analyzing the cost-effectiveness of incentives throughout L2s reveals stark contrasts:

• Base: For each $1 spent on incentives, $50 of income was generated, the best among the many L2s studied.
• Optimism: Maintained a optimistic revenue-to-cost ratio in its early levels however noticed diminishing returns with successive airdrops.
• Arbitrum: Struggled to generate returns, with $100 of incentives yielding solely $8 in income.
• zkSync Period and Starknet: Generated lower than $0.10 for each greenback spent on airdrops, reflecting poor value effectivity.

3. Per-Person Incentive Prices

The fee per person throughout L2 networks exhibits three distinct patterns:

• Environment friendly Fashions: Base maintains a per-user value beneath $0.10, primarily because of its lack of a token and strategic use of grants.
• Reasonably Environment friendly Fashions: Optimism, with a price of $304 per MAU, combines recurring grants with multi-stage airdrops.
• Inefficient Fashions: Starknet’s per-user value exceeds $11,000, a results of fast person drop-off post-airdrop.

Why New L2s Fail to Retain Customers

1. Overreliance on Airdrops: Airdrops typically entice short-term speculators relatively than long-term customers. For instance, 65% of zkSync Period’s preliminary customers ceased interplay inside two months of its airdrop.
2. Lack of Ecosystem Improvement: New L2s typically lack a strong software layer, making it tough to retain customers. In distinction, Optimism and Arbitrum host over 50 high-utility dApps, considerably bettering retention.
3. Cultural and Group Elements: Base’s emphasis on group occasions and person expertise has cultivated belief and engagement, even with out token-based incentives.

Suggestions for Efficient Incentive Methods

1. Undertake Multi-Stage Airdrop Fashions: Following Optimism’s instance, staggered airdrops tied to ecosystem participation can foster sustained engagement.
2. Put money into Grants for Builders: Directing assets towards builders helps create a thriving dApp ecosystem, as seen with Arbitrum’s help for GMX and Aave.
3. Concentrate on Cultural Improvement: Sturdy group narratives, as demonstrated by Base, can retain customers even within the absence of direct financial incentives.
4. Monitor Value Effectivity: Recurrently assess per-user prices and regulate methods to optimize ROI. Base’s <$0.10 value per person ought to be an trade benchmark.

Conclusion

The information underscores that efficient L2 incentive methods require a stability between short-term and long-term mechanisms. Whereas airdrops are helpful for preliminary person acquisition, grants and cultural investments are vital for retention. Networks like Base and Optimism exemplify this strategy, providing invaluable classes for newer L2 options trying to construct sustainable ecosystems.