Layer-2 Linea Achieves Significant Growth Through Linea Surge Campaign with Points Reward Model

The funds deposited into Consensys' Layer-2 solution Linea have increased by over 50% in the past month. This surge is attributed to the special Points hunting campaign designed to attract DeFi users.

Layer-2 Linea Achieves Significant Growth Through Linea Surge Campaign with Points Reward Model

The Linea Surge Volt 1 campaign, launched on May 17 on Layer-2 Linea, has significantly boosted DeFi activities on Linea, with over $340 million deposited in less than a month.

According to L2BEAT, as of June 15, deposits into Linea have exceeded $1.19 billion, a nearly 50% increase from $814.49 million on May 14.

The campaign's success has positioned Linea among the top 5 Layer-2 projects with the highest Total Value Locked (TVL) on Ethereum.

Key Factor: Linea Surge Campaign and Points Reward Model

The primary driver behind this growth is the Linea Surge campaign, featuring a points reward system called LXP-L. Speculations suggest that LXP-L may be used to allocate tokens for an upcoming airdrop. LXP-L is a non-transferable soulbound token minted for wallet addresses providing liquidity on Linea during the Surge event.

The Linea Surge campaign consists of six separate Volts, each running for a month, encouraging users to provide liquidity to earn LXP-L. The campaign will run for six months or until the project reaches $3 billion in TVL, whichever comes first.

Volt 1 of the campaign successfully attracted users with a 10% reduction in LXP-L for liquidity provided after each Volt, incentivizing early participation. Additionally, Volt 1 created exclusivity by requiring an invite code to join the campaign.

With these mechanisms, Linea generated significant FOMO (fear of missing out) within the community. As a result, Volt 1 attracted over 616,000 users within just over a month.

As of June 1, Linea accounted for more than 9% of total transactions on Ethereum, up from 3.5% on May 1.

TVL of protocols within the Linea ecosystem also saw a dramatic increase from $262 million to $666 million within a month of the campaign's launch.

Despite community complaints, the points reward campaign has proven effective, helping Linea achieve remarkable growth in a highly competitive market with numerous Layer-2 solutions emerging on Ethereum. This success highlights the appeal of the points mechanism.

Points Reward Mechanism in the Layer-2 Ecosystem

Linea is not the only Layer-2 to implement a points mechanism. Layer 2 projects like Blast, Manta, and Scroll have also launched their points reward programs, albeit with mixed community reactions.

Manta Pacific launched a points reward campaign in March, but the disappointing rewards led many users to withdraw their deposits as soon as possible.

Scroll initially canceled its points reward model due to negative feedback but later introduced Scroll Sessions in April, rewarding Scroll Marks to users transferring crypto from Ethereum.

The most notable Layer-2 with a points mechanism is Blast, which reached over $360 million in TVL within three days of launch, amid accusations that its points reward model was a Ponzi scheme.

Points rewards have become a trend in the crypto sector since friend.tech initiated it in August 2023, aiming to become a criterion for future airdrops. The success of points is undeniable, with crypto projects generating over 115 billion points as of mid-February 2024.

However, some argue that projects exploit users' point farming activities with promises of substantial airdrops.

Recent Criticisms

Linea recently faced criticism for halting transactions for an hour following a $7 million hack on the DEX Velocore, raising significant concerns about the project's decentralization.