DeFi
Points Drive Skyrocketing Growth on Consensys’ Linea Blockchain – DL News
- Crypto deposited on Consensys’ Linea blockchain has increased by 50% over the past month.
- This growth has been fueled by a points program designed to attract DeFi users.
A campaign to boost DeFi activity on Consensys’ Linea blockchain has seen rapid success, attracting more than $430 million in crypto since the network’s launch nearly a month ago.
Over $1.2 billion in crypto has been bridged at Linea, according to Ethereum research site L2BEAT. That’s up from $792 million on May 14.
The campaign quickly made Linea one of the largest layer 2 blockchains on Ethereum. These blockchains are essential to the future of Ethereum, giving users a faster and cheaper way to use the original. smart contract platform.
It’s also the latest campaign to demonstrate the power of “points,” the crypto version of airline miles-style rewards programs, despite user fatigue. By awarding points to certain users, Linea has managed to break through in an increasingly competitive market in which dozens of competitors have come online over the past year.
Linea is developed and managed by Consensys, the developer of the popular Ethereum wallet MetaMask. Consensys founder Joseph Lubin is one of the co-founders of Ethereum.
The soaring
Layer 2 blockchains have long used subsidy programs to attract users and application developers.
More recently, some have taken a page from the apps playbook by awarding “points” to users who complete certain tasks, like depositing crypto. Most users assume points will be used to award tokens in the future airdrop.
Layer 2 blockchains Blast, Manta, and Scroll have all launched their own points programs, sometimes sparking significant protests from users.
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There is a growing sentiment that points programs are exploitative, stringing users along with the implicit promise of a big payday at an unspecified future date. Additionally, crypto lawyers have started to repel against their proliferation, arguing is not a game without risk nor a way to escape the control of regulators over airdrops.
Layer 2 Mantis Pacific launched a points campaign in February, rewarding users who transferred assets to the blockchain. But the rewards were disappointing and caused many people to withdraw their deposits at the first opportunity.
Scroll quickly abandoned the points campaign amid user criticism. But it returned in April with Scroll Sessions, rewarding users with Scroll Marks for importing their crypto from Ethereum.
Some users also complained when Linea announcement its second points program, the “surge”, in March. In this announcement, Linea stated that it wanted to use the new program to attract liquidity to its DeFi ecosystem.
“The overall user experience is strictly dictated by this factor,” the company said.
Its points, called LXP-L, would be allocated to liquidity providers on a decreasing basisthe first to deposit cryptocurrencies on Linea-based apps earning more LXP-L than depositors who come in subsequent months.
The ramp-up would last six months, or until $3 billion in crypto was transferred to Linea.
Despite a handle of complaintsthe push seems to have worked.
Since May 16, the first day of the surge, Linea’s DeFi ecosystem has grown 138% to over $665 million, according to DefiLlama data.
A points program has fueled meteoric growth on Ethereum L2 Linea.
As of June 1, Linea accounted for more than 9% of all transactions on Ethereum and its largest layer 2 blockchains, according to data compiled by pseudonymous Netherlands-based analyst Marcov. As of May 1, it represented only 3.5% of these transactions.
Linea will now have to try to retain these users. Programs based on incentives to attract users have a irregular registration in crypto.
Additionally, Linea drew critical for briefly suspending trading last week to protect users of Velocore, a decentralized exchange that suffered a $7 million hack. The move is the latest reminder that many crypto-based projects are still centrally controlled, despite commitments to cede control to their users.
Linea claims to be in phase 1 of a four-phase “decentralization roadmap”.
Aleks Gilbert is a DeFi correspondent at DL News. Do you have any advice? Send him an email to aleks@dlnews.com.