Don’t just focus on Layer 2 airdrops, Layer 1 may be on the rise again

In the first quarter of this year , the popularity of Layer2 airdrops is still there, and many people in the market still focus on and invest in Layer2; but in fact, Layer1 is also worthy of attention, especially in the second quarter. Although Ethereum is the dominant Layer1, blockchain technology as a whole is still in its early stages, and there are still many problems to be solved. In each bull-bear cycle of the crypto market, a group of Layer1 giants will be born. So, what Layer1 projects are worth paying attention to? What projects are crypto big Vs optimistic about? What is the deep logic behind the popularity of these projects?

There may be a big airdrop in the second quarter, Sui and other projects are worth paying attention to

Entering the second quarter, judging from the project value and official information, the most noteworthy Layer1 projects are Sui and Aleo. Sui is a direct competitor of Aptos (project token APT), and both are seeking to find scalability solutions on their base layer. Both were founded by former Meta employees who participated in Facebook's failed project DIEM (Libra). Both use the Rust-based programming language Move, but Sui's version is slightly modified. In addition, Sui uses Narwhal and Tusk, a DAG-based memory pool. After APT released the airdrop, the coin price rose dramatically, and Sui's project token is naturally worth looking forward to. So, when is Sui most likely to issue coins?

In March, Sui development team Mysten Labs posted on its official Twitter account that the Sui mainnet will be launched in Q2 this year. Although the official has stated that there is no formal airdrop plan, SUI Network has released the SUI Token community access plan and SUI Token distribution details.

The SUI Token distribution plan includes: Developer Funding Program, SUI Delegation Program, Ambassador Program, University Outreach Program, and Education Program. Although only the Developer Funding Program is currently in operation, the rest of the programs are actively underway and will be launched in a short time. The Sui Foundation aims to have all of these projects online before the Sui mainnet launches. The SUI token distribution is as follows:

In the early stage, the community reserve managed by Sui Foundation has more than half of SUI Tokens, which will be used for various community projects, such as delegation plans, Grants allocation, research and development, validator subsidies, etc. In addition, as the network matures to decentralization, Sui Token allocation will undergo some fundamental changes. Officials said that for Sui friends who have been spreading knowledge about Sui, introducing developers to Sui, and testing and helping to improve the product experience of Sui's current applications, once the mainnet is launched, the foundation will ensure their participation in Sui's Token allocation. From this point of view, the probability of Sui airdrops in the second quarter is very high.

In addition to Sui, the most noteworthy one is Aleo. Aleo is like "a child of Ethereum and Zcash ", and it has three main advantages: 1. POS without environmental pollution; 2. Maximum permissionlessness, incentivizing the best validator behavior; 3. Balancing privacy and transparency through the use of SNARKs. In February 2022, Aleo completed a $200 million Series B financing, led by SoftBank and Kora Management, and participated by Andreessen Horowitz (a16z), Tiger Global, Samsung Ventures, etc. Aleo launched the testnet 3 incentive in October 2022, and distributed 25 million Aleo points (ALEO) to developers, provers, and validator communities. On March 21, 2023, Aleo has opened applications for its final incentive testnet validators and provers; on March 30, Aleo officially tweeted that "big things are coming in April", and the community speculated that it might be launched on the mainnet.

LayerZero quickly gained popularity after locking up $1.5 billion in assets in one week

As for the current hot spot in Layer1, it is undoubtedly LayerZero. After LayerZero was officially launched on seven networks including Ethereum recently, the cross-chain protocol Stargate based on it has won $1.5 billion in locked funds in less than a week after its launch, which is very impressive. According to BitPush on April 4, LayerZero Labs completed a $120 million Series B financing with a valuation of $3 billion. The investors have very strong backgrounds, mainly including a16z Crypto, Sequoia Capital, OKX Ventures, Circle Ventures, Samsung Next, OpenSea and Christie's. So what exactly is LayerZero, and why is it so attractive?

LayerZero is an omnichain interoperability protocol developed by LayerZero Labs that supports cross-chain communication between all Layer 1 and Layer 2. LayerZero began to be built in the first quarter of last year and has been launched on Ethereum, Avalanche, Polygon, BNB Chain, Fantom, Arbitrum and Optimism. Solana, Terra and Cosmos Hub will be launched in 6 to 8 weeks.

LayerZero provides a set of standard protocols and interfaces that allow different blockchain networks and smart contracts to interoperate, thereby achieving cross-chain communication and data transmission. The value of LayerZero is that when solving liquidity fragmentation problems such as multi-chain deployment, LayerZero uses non-encapsulated assets, supports a unified liquidity layer for EVM and non-EVM, and can bundle complex transactions such as original chain exchange, bridging, target chain exchange, and pledge into one when assets cross chains. In simple terms, LayerZero relies on oracles and repeaters to transmit information between on-chain endpoints. When a user application sends information from Chain A to Chain B, the message will be routed through the endpoint on Chain A. The endpoint notifies the oracle and repeater specified by the user application, and the oracle passes the block header to the endpoint on Chain B. The repeater then submits the transaction proof. When the transaction proof is verified on Chain B, the message will be transmitted to the target address. In addition, running repeaters and Oracles is completely open and permissionless. LayerZero is doing more than just simple cross-chain asset transfers. It also supports multiple cross-chain activities, including state sharing, unified liquidity bridges, lending, exchange, and governance.

So when will LayerZero issue its token? Bryan Pellegrino, co-founder and CEO of LayerZero Labs, declined to comment on the token release schedule in an interview, but based on past experience, token issuance often follows the completion of financing.

Competition in Layer1 is still fierce. Which projects are the big Vs optimistic about?

"In every generation there are talented people, each leading the trend for hundreds of years." It can be said that in every bull-bear cycle, a group of overlords will be born in the Layer1 track. So, in addition to Sui and LayerZero, what other Layer1 projects are worth paying attention to? Below we further sort out some projects that Twitter celebrities are optimistic about.

Well-known crypto V Crypto in Black published an article to count 11 upcoming L1 and L0 potential stocks, mainly including: Aleo (it is a first-layer blockchain platform that uses zero-knowledge cryptography to implement privacy applications), Shardeum (it is a sharded blockchain compatible with the Ethereum Virtual Machine (EVM)), Sui (it is a permissionless, PoS first-layer blockchain designed by a former Meta (former Facebook) engineer and is a direct competitor of Aptos), Fuel Labs (it is trying to become the fastest execution layer developed by modular blockchain stacks), ireChain (it is one of the fastest-growing blockchain unicorns in India), Celestia (it enables people to quickly deploy their own blockchains by decoupling the consensus layer from the execution layer), Subspace (it is driven by PoAS consensus and is a new decentralized storage project), Sei Network (it is an industry-specific 1-layer blockchain dedicated to transactions), ParallelChain (it provides technical support for commercial native permissioned platforms and open source blockchain platforms), Quai Network (which adopts PoW2.0 mechanism and multi-chain architecture to provide a novel layer-one expansion solution), LayerZero (which is an all-round chain interoperability protocol).

For some high-quality projects, many big Vs have basically the same views. Twitter big V Hebi (@hebi555) mentioned earlier: the unissued L1 tokens include sui, sei, layerzero, fuel, zeta, aleo, shardeum, celestia, etc. Twitter big V Kill Wolf (@0xKillTheWolf) further organized these high-quality projects into a table, and tweeted: Here is a summary of 13 top institutionally invested #Layer1 public chain projects that have not yet issued tokens, for your reference!

Although the market is shrouded in dark clouds, technological development never stops

From the above analysis, we can see that the market is generally optimistic about projects such as Sui, Layerzero, Sei, Fuel, Aleo, Shardeum, Celestia, etc. The main reason is that these projects have proposed novel solutions to the current problems of blockchain, such as scalable solutions to solve the problem of low performance of blockchain, such as Sui, Shardeum, Sei, etc.; cross-chain interoperability protocols to solve the island effect of blockchain, such as Layerzero, etc.; solutions to lower the threshold of blockchain development, such as Celestia, Fuel Labs, etc.

With the bankruptcy of crypto banks such as Silicon Valley Bank, US regulators have further reduced their exposure to the crypto market. Recently, the CFTC has directly sued Binance. Many countries have also further tightened the supervision of crypto institutions and exchanges. The crypto market is shrouded in dark clouds, but these have not stopped the development of blockchain technology. We believe that Bitcoin and the entire crypto industry are not just bubbles or short-lived fireworks. Bitcoin and the crypto industry will continue to grow in the future. The fundamental reason behind this is that blockchain technology has never stopped developing. Digital finance based on blockchain technology is not a castle in the air, and the digitalization process of mankind will never stop.