It can be difficult to extrapolate the precise differences between a good, long-lasting product and temporary financial incentives in the crypto world.
Crypto-native products are extremely clunky, requiring users to jump through a number of weird hoops just to move some cash. But if moving that money around means you can make even more money, then this product may have huge traction.
Challenge offers another excellent example of this dynamic: airdrops, yield farms, etc. This same murky dynamic is at play as layer-2 bridging service Hop Protocol and Ethereum scaler Arbitrum have teamed up for a unique campaign.
Before you dig: Hop is an on-ramp and on-ramp from various layer-2 scaling solutions. With Hop, you can transfer money from Polygon to Arbitrum and Ethereum to Optimism ( and vice versa). Although bridges like this already exist, many of them often have a waiting period before you can withdraw your money.
For example, the withdrawal of bridging funds from Arbitrum can take a week. Yeah. (Regarding Arbitrum, see our learn the article which dives deep into this Ethereum scaling solution.)
Business for both products is booming. Arbitrum, at least for a brief while, even saw higher gas fees than the Ethereum mainnet.
For two months, the team behind the scaling solution expected to distribute different NFTs to users who perform unique tasks within the Arbitrum ecosystem. We’ll see why that expectation fell short in a moment.
The task for the first week (which started on June 21) was simply to link assets to Arbitrum from a number of crypto bridges. Additionally, according to Arbitrum, “Users who use the bridge that ends up getting the most volume at the end of the week will also be able to claim an NFT bonus.”
Of the approximately 20 decks available, which one do you think won?
That’s right, Hop Protocol – and it wasn’t even close.
Although the campaign seemed well-designed and inclusive, on Thursday Arbitrum had to take a break from Odyssey.
“Due to the heavy load placed on the channel resulting in higher than normal gas charges, we have decided it is best to put the Odyssey on hold until Nitro is released so that all communities and projects within Arbitrum continue to have a frictionless experience,” tweeted the team on Wednesday.
nitroby the way, is yet another scaling technology that will be rolling out shortly, according to the project. Currently, Arbitrum slows down the network whenever there is extreme capacity. Nitro would essentially remove those training wheels.
In conclusion, Arbitrum has been brought to its knees with its incentive program, which seems like a bad result considering that it is supposed to help scale crypto.
As for Hop, however, the service performed like a charm, onboarding over 165,000 new users.
Unfortunately for Arbitrum, Hop was perhaps too good a product. After all, users could have chosen any number of other bridges.
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