It can be difficult to extrapolate the exact difference between a good sustainable product and a temporary financial incentive in the crypto world.
Crypto-native products are extremely clunky, asking users to jump through any number of weird hoops to get a little money around. But if moving that money around means you can make even more money, then that product could enjoy huge traction.
DeFi Presents another classic example of this dynamic: Airdrop, Yield Farm, and so on. The same questionable dynamic is in play for a unique campaign by the Layer-2 Bridging Service Hop Protocol and the Ethereum Scalar Arbitrum teaming up.
Before I dig in: Hop is an on- and off-ramp from various layer-2 scaling solutions. With Hop, you can transfer money from Polygon to Arbitrum and from Ethereum to Optimism (and back again). Although such bridges already exist, many of them often have a waiting period before you can withdraw your money.
For example, it may take a week to withdraw bridged funds from Arbitrum. Oh. (For more on Arbitrum, learn our article which dives deeper into this Ethereum scalping solution.)
The activity of both products is booming. Arbitrum, at least for a brief moment, also saw higher gas charges than Ethereum’s mainnet.
The reason behind this huge boom is Arbitrum’s so-called Enter the Odyssey campaign.
For two months, the team behind the scaling solution hopes to distribute individual NFTs to users that perform unique functions within the Arbitrum ecosystem. We’ll know why that expectation fell short in a moment.
Work for the first week (which began on 21 June) was to bridge the asset to Arbitrum from only a select few crypto bridges. Additionally, per Arbitrum, “users who use the bridge that receives the most volume at the end of the week will also be able to claim the bonus NFTs.”
Out of the nearly 20 bridges available, which one do you think won?
That’s right, hop protocol—and it wasn’t even close.
Although the campaign appeared well-designed and inclusive, on Thursday Arbitrum had to pause on Odyssey.
“Due to the heavy load on the series exceeding normal gas charges, we have decided that it is best to hold off Odyssey until the nitro is released so that all communities and projects within Arbitrum will suffer a friction- The free experiences continue, the team tweeted on Wednesday.
By the way, there is another piece of nitro scaling technology that will be implemented soon according to the project. Currently, Arbitrum slows down the network whenever there is an excessive capacity. Nitro will essentially take off these training wheels.
In the end, Arbitrum has been brought to its knees thanks to its incentive program, which seems like a poor outcome considering the fact that it’s supposed to help crypto scale.
However, for Hop, the service performed well, adding more than 165,000 new users.
Unfortunately for Arbitrum, hop may be too good a product. After all, users could choose any number of other bridges.
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