Research Summary

The report discusses the emerging trend of points farming in the crypto space, where protocols reward users with points that may qualify for future token airdrops. It highlights the use of this system by protocols like Blur, Jito, MarginFi, and Tensor. The report also mentions the launch of Ethereum Layer 2, Blast, which attracted over $500M in deposits through its points system. Other topics include the implementation of inscriptions on multiple chains, Arbitrum’s $90M inflows, and Sui DeFi’s growth.

Key Takeaways

Emergence of Points Farming

  • Points Farming Trend: The report discusses the growing trend of points farming, where protocols reward users with points that may potentially qualify for future token airdrops. This system allows users to pre-farm a future token without worrying about the game theory of the reward token.
  • Protocols Using Points Farming: Several protocols, including Blur, Jito, MarginFi, and Tensor, have effectively used points farming. Jito, an MEV-powered liquid staking protocol on Solana, recently announced their airdrop after a months-long points system.

Blast’s Launch and Points System

  • Blast’s Launch: Blast, a new Ethereum Layer 2, launched with a points system based on usage and referrals of other users. Despite not being live yet, Blast attracted over $500M in deposits as users scrambled to acquire points.
  • Effectiveness of Points Systems: The report suggests that points systems have gained popularity because they help avoid token selling that often hampers many protocols as they start to take off. By not launching a token right away, they leave the APR to the user’s imagination.

Inscriptions on Multiple Chains

  • Inscriptions Beyond Bitcoin: Inscriptions, a feature previously limited to Bitcoin, have now been implemented on other chains like Polygon and Avalanche, with millions being created.

Arbitrum’s Inflows

  • Arbitrum’s Capital Inflows: Arbitrum, an Ethereum Layer 2 scaling solution, experienced $90M of inflows over the past week as users chased the short-term incentives program.

Sui DeFi’s Growth

  • Sui DeFi’s TVL: Sui, a new high throughput Layer 1 that uses the Move programming language, has been steadily gaining Total Value Locked (TVL) since June. It has over 20 DeFi protocols launched and has silently broken $140M in TVL.

Actionable Insights

  • Monitor Points Farming: Given the growing trend of points farming, it may be beneficial to monitor protocols that use this system. Understanding how these systems work could provide insights into potential future token airdrops.
  • Consider Layer 2 Solutions: With the launch of Blast and the inflows into Arbitrum, it may be worth exploring Ethereum Layer 2 solutions. These platforms could offer opportunities for earning points or chasing short-term incentives.
  • Track Inscriptions: As inscriptions are now being implemented on multiple chains, tracking their creation and usage could provide valuable insights into the evolving crypto landscape.
  • Research Emerging Protocols: The steady growth of Sui DeFi suggests that emerging protocols can offer significant potential. Researching these platforms and their growth trends could provide a better understanding of the DeFi space.

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