3rd-day rise about 40%, TVL exceeded 1.1 billion US dollars, how to participate in the Linea ecosystem incentive plan?

Author: Grapefruit, ChainCatcher

Edited by: Marco, ChainCatcher

Since the launch of the Linea Surge incentive program on May 17th, the TVL of the Linea mainnet has entered a period of rapid rise, with TVL surpassing $1.1 billion within three days, an increase of over 40%.

According to L2beat data, on May 29th, Linea's on-chain TVL was $1.13 billion, ranking sixth in the entire Layer2 market.

Linea, as a zkEVM Layer2 scaling solution developed by Consensys, the parent company of MetaMask, has attracted attention from the encryption community with every move.

Although Linea, as a representative project of Layer2 network, is not as stable and popular as StarkNet and zkySnc based on zkEVM system. It has neither popular applications nor well-known native projects. Its TVL has been maintained at around 100 million US dollars for a long time, and the user attention is also average.

Recently, the incentive activities for points have driven the explosive growth of TVL data, making community users start to re-examine this Layer2 network.

Two driving forces behind the growth of Linea data: Gas fee drop, Suger point incentive activities

From the perspective of data change trend, in February this year, the TVL on the Linea chain started to rise, gradually increasing from the long-standing $180 million to a new high of $1.13 billion on May 28th.

There are two important factors behind the growth of on-chain data on the Linea network: the reduction of Linea network gas fees and the Suger point incentive activities.

In terms of gas fee optimization, Linea has made two significant upgrade adjustments.

First, on February 16th, Linea launched the Alpha v2 version, which optimized functions such as data compression, reducing the cost of submitting to the L1 mainnet by 90% compared to the original V1 version. It is precisely this upgrade that has triggered the trend of TVL growth on the Linea chain.

With the completion of the March Ethereum Cancun upgrade, Linea also introduced the EIP-4844 proposal on March 26, adopting the Blob data new format to drop the DA cost of submission to L1, further reducing network GaS fees.

According to L2beat data, after adopting the Blob data format, the cost of submitting data from Linea to L1 has dropped from around $200,000 per day to a few thousand dollars, or even single digits. The on-chain gas fee for each transaction has also dropped to below $0.02, less than 1/400th of the original cost.

On the second day after successfully adopting the Blob format (March 28), Linea announced the launch of the ecological incentive plan Linea Voyage: The Surge, which is planned to be launched in April, attracting users to provide liquidity for DeFi applications to increase the growth of network TVL and promote the prosperity and development of the on-chain ecosystem. At this time, Linea's on-chain TVL is $471 million.

According to official information, the main purpose of the Linea Surge incentive campaign is to increase on-chain liquidity (TVL) to stimulate ecosystem development. Users can contribute liquidity to selected DApp applications and receive LXP-L tokens as rewards.

LXP-L is a new point token derived from the original LXP point token system (suspended on May 12), and it is also a non-transferable Soul-Binding Token (SBT), mainly used to track liquidity contributions on Linea.

The goal is to reach a TVL of 30 billion USD

The Surge incentive program is divided into 6 phases (Volts), each lasting for one month, with a different themed DApp for each phase. The specific duration of the event will depend on whether "all 6 phases of the event have ended" or "TVL reaches 3 billion USD", with the achievement of either condition signaling the end of the event.

In addition, the total issuance of LXP-L will decrease by 10% in each period. This means that the earlier users participate, the more points rewards they will receive.

On May 17th, the first phase of the Linea Surge event officially went live, with participating DApps mainly including DEX, lending, cross-chain bridges, and other DeFi applications.

Despite being delayed by nearly a month from the original plan, the Surge event still received enthusiastic participation from users after its launch. A large amount of funds and users poured into the Linea ecosystem for mining, and the TVL also entered a rapid growth mode.

In less than 3 days since the start of Surge's Phase 1 activities, Linea's TVL on-chain has increased from an initial $780 million to $1.1 billion, attracting a fund volume of over $300 million within 3 days.

As of May 28th, Linea's TVL on-chain has risen to $1.13 billion, ranking sixth in the entire Layer2 market.

According to Dune data, on May 23rd, the total asset scale bridged by Linea mainnet has exceeded $812 million, once again reaching a new historical high.

How do the project party and users participate in Linea Surge's points activity?

"Participate in the Surge activity and earn LXP-L points" has become a new task in the Linea community. According to the data displayed on the OpenBlock page, as of May 29th, the number of daily participating users on Linea has exceeded 565,000, and a total of 7.96 billion LXP-L points have been distributed, with an average of over 14,000 points per user.

For DApp projects, participating in the Surge plan will be a great opportunity for exposure and user growth, and will also receive traffic and resource support from Linea official. According to the official statement, the number of DApps currently deployed on Linea has exceeded 300+.

DApp wants to participate in the Surge event, it not only needs to pass the Linea related review, but also needs to meet at least one of the following two conditions:

Ran for at least one year on other EVM chains, with a peak TVL of over $50 million.

2. Provide audit reports related to the contract version deployed on Linea and have implemented at least one real-time vulnerability detection solution provided by a Linea partner.

According to the Surge activity page, a total of 21 DApps are participating in this event.

The main products include:

Cross-Chain Interaction Protocol Connext, Stargate, Celer Network;

DEX platform PancakeSwap, Sushi, SyncSwap, Velocore, SpartaDEX, iZUMi Swap, NILE, Lyve Finanace;

DeFi asset management platform Teahouse Finance, Overnight;

Automated Yield Aggregator Lynex, Clip Finance;

Launchpad platform Secta;

Lending protocols Mendi Finance, Gravita Protocol, ZeroLend;

Deri Protocol for decentralized derivatives;

Stake protocol Renzo again;

The weight of point rewards will vary according to different applications such as DEX, lending, and different types of assets. For example, the weight of ETH and LRT assets on DEX, lending, and cross-chain platforms will be higher.

To participate in the Surge event, users first need an invitation. Afterwards, simply cross-chain your assets to the Linea network and deploy them in the above protocol to earn LXP-L points based on the amount of funds.

And for early users who participate before the launch event, as long as their assets on the Linea mainnet exceed 0.1ETH, they will receive LXP-L point bonus.

Currently, there are two main ways for users to earn LXP-L points:

1. Ecosystem points - cross-chain assets or deposit them into Linea, participate in ecosystem DApp interactions, and provide liquidity for them.
2. Referral points - refer users through the invitation code of Linea Surge.

Users can view the DApps and asset liquidity, as well as the issuance of points participating in the Linea Surge activity through the OpenBlock Linea data page.

Linea market share is only 2.4%

Under the expectation of token airdrop, the Surge incentive activity has attracted a large number of users and funds to mine in a short period of time, resulting in a big pump in TVL data. Many users speculate that the Surge incentive activity may be the final incentive activity before Linea's token issuance.

Compared with the Linea Voyage (Voyage) ecological DApp incentive activity launched in November last year, from the perspective of user influence and TVL data growth, Surge's points activity this time is undoubtedly successful.

In terms of ecosystem development, since the mainnet was opened to the public in July last year, Linea has launched a series of initiatives, but the final result was not satisfactory.

Last August, Linea announced the launch of the Linea Ecosystem Investment Alliance (EIA) to support the development of Linea ecosystem projects. The investment alliance consists of more than 30 venture capital firms, including Amber Group, Animoca Brands, and IOSG Ventures.

Last November, Linea Voyage launched the LXP incentive program, but it did not bring significant changes to the ecosystem. The TVL data has been fluctuating around 180 million US dollars for a long time, and it wasn't until February of this year that there was some improvement.

Although the Surge point incentive campaign has brought growth to TVL in a short period of time, most of the participating users are small capital users. According to Dune data, over 71% of the addresses deposited on the Linea mainnet have an ETH quantity lower than 0.1 ETH.

In the face of the community's resistance to PUA users, the duration of the TVL growth brought by the Suger incentive program remains unknown.

According to L2Beat data, the TVL of the Layer2 market has reached $45.69 billion, with Linea market share accounting for only 2.4%.