David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s regular take on what’s happening in the fast-changing and volatile cryptocurrency space.

 

Needless to say, markets, very much including crypto, are looking pretty unhealthy right now. But that doesn’t mean there aren’t potential opportunities to explore.

One of those is crypto airdrops. And, according to Apollo Capital’s David Angliss, particularly airdrops for developing “layer 2” protocols that are planning, or potentially planning, tokens. 

Airdrops, if you didn’t know, are the closest thing to free money in the crypto world. They’re a way for decentralised projects to disperse tokens broadly to eligible crypto-ecosystem users, while creating free publicity and awareness.  

Layer 2s, meanwhile, are networks or tech that work on top of an underlying blockchain (Ethereum, in the case of the examples in this article) to improve its scalability and efficiency.

And there’s a current meme term for them – “L222”, which refers to 2022 being the year of the layer 2s. 

 

Optimism 

Angliss highlighted the most promising airdrop opportunities he’s seeing in layer 2 solutions, including Optimism and Arbitrum, which both use “Optimistic roll-up technology”. That’s a method of combining transactions together so they don’t have to be confirmed individually.

The Optimism project announced late April that it will be sending out 19% of its OP token to eligible users in airdrop stages, the first of which will be 5% of the supply and that’s happening soon – in this quarter.

“The Optimism airdrop is exciting for us at Apollo,” said Angliss, “because we’re big supporters of the Synthetix (SNX) ecosystem, which actually shifted to using Optimism last year.

“Through having an Optimism token in the ecosystem, protocols will now be able to incentivise liquidity by providing the OP token as an incentive to capture TVL (total value locked).”

The first airdrop already has its list of more than 250k eligible addresses – users who fulfilled various criteria when interacting within the Ethereum and/or Optimism ecosystems.

You can get an idea of that criteria in the table posted by Optimism, below, and you can check your eligibility here…

“Optimism is pioneering a new style of airdrop, which is very clever,” notes Angliss. “They’re incentivising people to keep using the protocol to receive further airdrops – it’s a more sustainable approach.” 

Angliss recommends following the list’s criteria to make sure you give yourself the best chance of receiving the next Optimism airdrops. This includes actions such as interacting in projects’ DAOs (decentralised autonomous organisations), making a small Gitcoin donation, using various decentralised exchanges, and so on.

As just one example of past airdrop generosity (and there have been plenty of others since, including ENS) the Uniswap token (UNI) was sent to eligible addresses in 2020 – a minimum of 400 tokens per address. Like everything right now UNI is down considerably, but at its peak it was worth US$44.92 per token. 

 

Arbitrum

“There’s no doubt Arbitrum’s the most dominant layer 2,” says Angliss. “They’ve still got the most TVL and the most vibrant ecosystem for layer 2.”

Angliss believes that now Optimism has played its airdrop hand, what we’re extremely likely to see with Arbitrum is something similar to the Sushiswap “vampire attack” on Uniswap in 2020.

And that refers to an airdrop of SUSHI tokens to Uniswap’s user base in an attempt to steal market share. This kind of tactic has since become almost commonplace across the open-source, decentralised crypto industry.

“We could see a similar response from the Arbitrum protocol next and it could be another good opportunity,” said Angliss.

So, a bit like an “airdrop war” then? “Yeah, you could definitely look at it that way,” Angliss agreed.

The following thread from the excellent airdrop-following Twitter account Olimpio gives a good breakdown of how you can give yourself the best chance of eligibility for an Arbitrum airdrop…

The strategy is based on speculation and there’s quite a bit to it. (Guess there’s no such thing as “free money” after all.)

But potential actions that could help your eligibility include earning special NFTs in the Arbitrum “Odyssey” event, bridging funds from Ethereum onto Arbitrum, and interacting with various protocols within the Arbitrum ecosystem.

 

zkSync

Last, but very much not least, according to Angliss, is the potential zkSync airdrop opportunity. First, though, a quick distinction…

zkSync is a layer 2 that uses different technology from Optimism and Arbitrum – ZK rollups, aka zero-knowledge rollups.

“ZK rollups rely on mathematics to validate the rollup,” he says, “while Optimistic rollups rely on the observers of the layer 1 contracts to invalidate incorrect transactions.”

The upshot, says Angliss is that Optimistic rollups are “slightly slower and more expensive” than zkSync.

“What’s also really exciting about zkSync and how it differs from Optimism and Arbitrum, is its fee structure,” adds Angliss. 

“So if you want to transfer USDC from one wallet to another, for example, the fees are actually taken off the asset you’re using.” 

This means not having to muck around with using Ethereum as transactional “gas”, which, says Angliss, “takes the burden off the user”. And not only that, the fees become cheaper the more users that come on board.

Now with that said, is an airdrop for zkSync likely?

Yes. And that’s because a zkSync token has been officially confirmed in development and will be reportedly “community owned”.

“zkSync is probably a bit further behind in actual development compared with the other two,” notes Angliss. “But it’s a really exciting L2 that doesn’t have a token yet.

“And a DEX [decentralised exchange] that I’m really keeping a close eye on as well, is the native one on zkSync. That’s called ZigZag, and they don’t have a token, either.” 

Wait, so is that another airdrop opportunity?

“Potentially, yes, because it’s very closely related to zkSync. Those two projects are the ones I’m very excited about for the end of this year – Q3/Q4.”

 

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

 

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