The Ethereum Layer 2 (L2) community has emerged as an necessary answer to blockchain scalability points. As these networks compete for market share, incentive packages (primarily airdrops and grants) are central to their progress methods. Though the assets allotted are huge, their effectiveness stays underneath scrutiny.

Analysis scope

This evaluation focuses on two fundamental incentive mechanisms: airdrops and subsidies. Software-specific incentives resembling liquidity mining are excluded to explicitly concentrate on the L2 ecosystem. The information spans from 2021 to December 2024 and consists of the next key indicators:

1. Month-to-month Lively Customers (MAU): Displays sustained person progress.
2. Income era: Consider the return on funding of your incentive program.

Principal findings

1. Affect of incentives on month-to-month energetic customers

For those who take a look at MAU traits throughout main L2 options, you'll see vital variations.

• base confirmed constant progress with a mean month-to-month MAU improve of 56%, considerably outperforming different L2 networks.
• Arbitrum and optimism Supported by the grant, it confirmed a slight improve after the airdrop.
• A brand new L2 like zkSync period and stark internet MAU decreased quickly after airdrop.

Key insights:

1. The proliferation of latest L2 options has diluted person exercise throughout the community. For instance, zkSync Period's MAUs decreased by 32% inside 3 months of the airdrop.
2. Ecosystems with sturdy subsidy packages resembling Arbitrum and Optimism retain customers higher, sustaining over 300,000 MAUs over the previous quarter.
3. As seen at Base, cultural elements play an important function in sustaining engagement with out token incentives.

2. Income and incentive prices

Analyzing the cost-effectiveness of incentives throughout L2 reveals a transparent distinction.

• base: Each $1 spent on incentives generated $50 in income, the best of any L2 surveyed.
• optimism: Maintained a constructive revenue-to-cost ratio within the preliminary stage, however because the airdrop continued, income decreased.
• Arbitrum: A $100 incentive yielded solely $8 in income, and so they struggled to show a revenue.
• zkSync period and Starknet: Each greenback spent on airdrops generated lower than $0.10, reflecting value inefficiency.

3. Incentive value per person

The fee per person throughout L2 networks displays three totally different patterns:

• environment friendly mannequin: Base maintains its value per person beneath $0.10, primarily as a result of lack of tokens and strategic use of subsidies.
• Average effectivity mannequin: Optimism combines recurring grants and multi-stage airdrops at a price of $304 per MAU.
• inefficient mannequin: Starknet's value per person is over $11,000 because of speedy person churn after the airdrop.

Why new L2 fails to retain customers

1. Overreliance on airdrops: Airdrops usually appeal to short-term speculators relatively than long-term customers. For instance, 65% of zkSync Period's early customers deserted the interplay inside two months of the airdrop.
2. lack of ecosystem growth: New L2s usually lack a sturdy software layer, making it troublesome to retain customers. In distinction, Optimism and Arbitrum host over 50 high-utility dApps and have considerably increased retention charges.
3. Cultural and neighborhood elements: As a result of Base focuses on neighborhood occasions and person expertise, we now have cultivated belief and engagement even with out token-based incentives.

Suggestions for efficient incentive methods

1. Adopts multi-stage air drop mannequin: Following Optimism's instance, staggered airdrops tied to ecosystem participation can foster sustained engagement.
2. Put money into subsidies for builders: Directing assets in direction of builders can assist construct a thriving dApp ecosystem, as seen with Arbitrum's help for GMX and Aave.
3. concentrate on cultural growth: As demonstrated by Base, a powerful neighborhood narrative can retain customers even within the absence of direct monetary incentives.
4. Monitor value effectivity: Recurrently consider your value per person and regulate your technique to optimize ROI. Base's value per person of lower than $0.10 ought to set an business benchmark.

conclusion

This knowledge highlights that an efficient L2 incentive technique requires a steadiness between short-term and long-term mechanisms. Airdrops are helpful for preliminary person acquisition, however subsidies and cultural funding are necessary for retention. Networks resembling Base and Optimism are examples of this strategy and supply beneficial classes for brand new L2 options aiming to create sustainable ecosystems.