The wave of Layer1 and Layer2 has arrived An inventory of the token bridging steps and potential opportunities for various new chains.

Layer1 and Layer2 wave arrives Token bridging steps and opportunities for new chains.

Below, we will introduce how to bridge tokens to these new public chains and the current infrastructure and potential opportunities on the chain.

This summer, the blockchain world has witnessed a boom of new chains, from Mantle, Linea, and Base launched in July to Sei, opBNB, and Shibarium in early August. There was also the “Quantum Leap” upgrade of the king-level public chain Starknet. This summer has been particularly lively in the field of public chains. For many players on the chain, new chains represent new opportunities, new projects, and most importantly, new tokens.

Below, we will introduce how to bridge tokens to these new public chains and the current infrastructure and potential opportunities on the chain:

Starknet

In the past, Starknet was criticized by users for its extremely slow transaction confirmation speed. However, after the Quantum Leap upgrade, the user experience has been greatly improved, and it has also contributed to a significant increase in TVL on the chain, reaching a peak of 200M TVL and currently retracing to around 100M, ranking sixth among all L2.

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You can refer to the official tutorials for how to go to Starknet. Currently, there are relatively few projects on the Starknet chain. Apart from JediSwap, mySwap, and 10KSwap, the top three DEX by TVL, the chain gaming projects on Starknet are also worth our attention. The flagship project is Realms (for Adventurers), which is dedicated to building an open-source on-chain multiplayer combinable game on StarkNet. $LORDS is the functional token of this project and is one of the few tokens in the Starknet ecosystem. For more detailed information about Realms, you can refer to the article “Realms X Bibliotheca Research” written by SaulDataman.

Due to its strong backing from investors and the amount of financing, Starknet is expected to be the next potential airdrop opportunity. Therefore, paying attention to Starknet and actively participating in on-chain projects may bring unexpected surprises.

Mantle

Mantle, incubated by BitDAO, has a close relationship with the Ethereum L2 and Bybit exchange. It announced the opening of Mainnet alpha at the EthCC conference in mid-July. Unlike other L2 public chains, Mantle uses its token $MNT as the on-chain gas instead of $ETH. $MNT is exchanged 1:1 from the previous BitDAO token $BIT. Currently, the TVL on the Mantle chain is about 86M.

Due to its close relationship with Bybit, users can withdraw funds from Bybit exchange to Mantle. It is also one of the few new public chains that have exchange support immediately after launch. In terms of cross-chain bridges, the official bridge supports multiple mainnet tokens such as $MNT and $ETH, and third-party bridges such as orbiter.finance and Symbiosis are also supported.

In terms of ecosystem projects, Mantle has not gained favor from mainstream DeFi protocols. Currently, there are no deployments of well-known projects, and the projects with the highest TVL on the native side are both DEX projects, Agni Finance and FusionX Finance. As for Memecoins, $MINU, which performed the best, has also experienced a significant decline from its peak.

Unlike many L2 public chains that have not yet issued tokens, Mantle had a protocol token as soon as it went online, which also reduced the number of airdrop hunters. Under these conditions, it is not easy to have a good TVL performance. The next thing to pay attention to is the level of support from Bybit exchange. Currently, there are no ecosystem protocol tokens listed on Bybit.

Linea

Linea, a Layer2 network developed by the ConsenSys team using ZK Rollup technology, also announced the opening of Linea Mainnet Alpha access to the entire community at the EthCC conference. It has been nearly a month since then, but the performance so far is not ideal, with a TVL of only 34M, ranking 13th among all L2 public chains.

Due to the backing of the ConsenSys team, Linea’s mainnet is built into MetaMask by default, allowing users to skip the complex process of manually adding networks and directly switch to Linea network in their MetaMask. Currently, Linea can be accessed through the official bridge or third-party bridges such as orbiter.finance, rhino.fi, and Symbiosis.

Currently, most of the ecological projects are still DEX or lending platforms, but due to the lack of oracle integration, the variety of currencies that lending projects can provide is not complete. Currently, only KyberSwap has been deployed among mainstream protocols. In terms of ecological projects, Linea is relatively poor compared to other L2 chains. Most of the users are airdrop hunters, and even representative Memecoins are missing.

Base

Base, an L2 public chain launched by Coinbase, can be said to be the best-performing among these new public chains. In less than a month since its launch, TVL has surpassed 200M and is currently around 250M, ranking fifth among all L2 chains. The use of OP Stack also allows many projects to migrate to Base with almost no difficulty. Currently, top-tier DeFi protocols such as Uniswap, Compound, and AAVE have been deployed or are being deployed on Base.

There are currently two ways to access Base, through the official bridge or third-party bridges. Coinbase exchange has not yet enabled ETH deposits and withdrawals for Base, but it is expected to support it soon. The official bridge still requires a seven-day verification period on the mainnet due to Optimistic Rollup restrictions, while third-party bridges such as orbiter.finance, synapse, and bungee.exchange are not subject to this limitation and provide cross-chain services.

In addition to many well-established protocols deployed on Base, there are native protocols such as the recently popular friend.tech. It can be expected that more derivative protocols related to friend.tech will emerge in the future. As for the native infrastructure, Aerodrome, which has not yet been launched, is being closely watched by many. Ve33 DEX, launched by the Velodrome team, which has the highest TVL on the OP chain, has already partnered with many cross-chain deployment projects, including Thales, Liquity, QiDAO, and other well-known protocols. Its launch is expected to bring many opportunities.

Sei

Different from the recent hot L2 public chains, Sei is a parallel Layer1 public chain built on Cosmos with high TPS. It is also the latest Launchpool project of Binance. On the first day of its launch, it was listed on numerous exchanges. With the ongoing airdrop activity, the on-chain TVL has also been increasing and is currently around 3 million USD.

Sei is currently conducting airdrop activities for active users on six major networks: Solana, Ethereum, Arbitrum, Polygon, BNB Chain, and Osmosis. The airdrop rule is that active addresses that bridge funds to the Sei network have a chance to receive varying amounts of $Sei token airdrops. The supported cross-chain bridges include cosmos’ inter-chain communication ibc, Wormhole, and Axelar.

opBNB

opBNB is part of Binance Exchange’s BNBCHAIN roadmap and will be open to users on August 17, 2023. It is built on Binance Smart Chain (BSC) using OP Stack technology to upgrade to Optimistic Rollup L2. With strong support from Binance, it has also gained considerable attention. The total TVL on the chain is currently only 840K, which is not ideal.

opBNB currently does not support token deposits and withdrawals on Binance Exchange, but only through cross-chain bridges. Due to the use of Optimistic Rollup technology, it takes seven days for funds to return from opBNB to the BSC mainnet through the official bridge. The supported third-party bridges include rhino.fi and Polyhedra Network.

Currently, its ecological projects are mainly focused on DEX, such as Binary Swap, and there are no migrations of established projects from BSC. On the first day of its launch, there were many Memecoins, but now most of them are not performing well as the market cools down. It is necessary to continue observing the positioning of Binance Exchange towards opBNB or the implementation of incentive measures such as ecological funds.

Shibarium

Shibarium is an Ethereum Layer2 public chain created by the Shib Inu team, which has been eagerly anticipated and prepared for nearly a year. It was announced to go online on August 17th last week, but it encountered issues immediately after launch. The official explanation was that the network entered “fail safe mode” due to an unexpected surge in traffic, resulting in abnormal cross-chain bridge functions and over 1.7 million USD worth of user assets being stuck. Currently, the chain has stopped running to ensure the safety of funds.

At present, cross-chain funds are still in a stage where users cannot control them. The main developers of Shib state that the network is “almost ready to reopen to the public” and mechanisms have been put in place to prevent further disruptions, but no specific recovery time has been announced yet.

Author’s Opinion

Although the chains are new, the players remain the same in the unchanged environment. Even the project teams are the same, just constantly starting businesses or migrating to different chains. A new public chain represents the same group of players on the chain, continuing to compete and fight with the same funds on a different public chain. The start of each new public chain follows almost the same SOP standard process: the first step is DEX, followed by Memecoins, Lending Protocols, Launchpads, IDOs, etc. This kind of gameplay takes turns on different chains.

At the same time, because these new public chains are almost launched at the same time, this indirectly makes the on-chain liquidity more dispersed. From the competition of TVL between projects, to the competition between public chains. In the end, the comparison is which public chain has a better background and receives more support for infrastructure construction, so that the public chain can become the winner in the competition. In a bear market with reduced liquidity, there is usually only one winner. The winner takes all, and it is only with deep liquidity that more whales can be attracted, and more powerful developers can be attracted.

Only when a project appears that is not just the same set of SOP standard procedures (such projects have weak moats, and if established projects like Uniswap / AAVE migrate and deploy, they will quickly lose their advantages), can a positive cycle be achieved and derivative projects be created based on this popular project. Currently, BASE, which has the support of Coinbase and has given birth to the popular project friend.tech, is the winner at the current stage.

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