Note: Against the backdrop of the heated Layer 2 war, author Jake Pahor analyzed the development status of some Ether L2 projects through seven metrics, including protocol revenue, treasury, lock-in situation, token functionality, roadmap, etc., and gave subjective scores to the relevant projects.

I looked at a number of Ethernet L2 projects, both generic L2 (Polygon) and application-specific L2 (dYdX), and in order to keep this article short, the article had to exclude some quality projects that didn't make it into the top 5 (translation: generic zk rollup L2 networks like starknet and zksync, for example, are not yet in the maturity stage)

For this research framework, the authors used The DeFi Edge's project evaluation methodology and then, based on the analysis, provided a score for each project, so you'll need to read to the end to see the results.

1. How much revenue do they generate?

Token terminal provides some very interesting statistics on the total agreement revenue (fees) of these L2 projects in the last 180 days as follows

dYdX $212.2 million Arbitrum $13.7 million Polygon $8.8 million Optimism $8.5 million Loopring $2.5 million dYdX is absolutely crushing the other programs in terms of protocol revenue, and taking away dYdX, you can see in the chart that Polygon has been leading the pack and gaining momentum over the past month.

1. What is in the agreement fiscal pool?

Some important factors about fiscal pools are.

Whether they have different assets or are mostly their own native tokens (meaning more risk) How big is the treasury and how much development can this bring to the project? Polygon: It's hard to find any information on the size of Polygon's treasury, however, we know that Polygon recently had a $1 billion ZKP development fund program and we can assume that Polygon's treasury is much larger than that amount.

Optimism: 30% of the initial token supply (1.29 billion OP) will be allocated to the community fund (EcoFund + RetroPGF), which has a theoretical value of approximately $2.5 billion based on the current market price ($2).

dYdX: 5% of the initial token supply (50 million DYDX) is allocated to the community treasury, which is approximately $113 million based on the current price ($2.27).

Loopring: 20% of the token supply (275 million LRC) was allocated to the Loopring eco-fund, which is approximately $110 million at the current market price ($0.40).

1. Token lock-in situation

If the majority of tokens are still locked, this could create significant selling pressure in the future (you don't want to be liquid for VC exits). The following charts and information are from Messari and coingecko.

Polygon: About 92% of the matic token supply has been unlocked, with the last 800 million tokens to be unlocked by May 2025, and the current liquidity supply is about 9.18 billion out of a total supply of 10 billion tokens.

Optimism: Approximately 5% of OP supply has been unlocked by way of airdrop, with current liquidity of approximately 215 million of the total 4.29 billion OP supply.

dYdX: Approximately 11% of the DYDX supply has been unlocked and the current circulation is approximately 112 million of the total 1 billion DYDX supply.

Loopring: Approximately 90% of the LRC supply has been unlocked and current circulation is approximately 1.245 billion of the total 1.374 billion LRC supply.

1. Token functions and use cases

Polygon : MATIC tokens are used to pay for transactions in the network, you can get rewards by pledging MATIC, the pledge serves to protect the network (translation: this is the case of Polygon L1, Polygon Hermez, Polygon Zero and other Ethernet L2 solutions are not yet live on the main network).

Arbtirum: no tokens have been issued yet, but the network itself has gained significant traction.

Optimism: the rights to the block space are a sustainable source of revenue that drives the OP economic model and grows alongside the network itself.

dYdX: currently DYDX is still essentially a governance token, with holders also receiving discounts on transaction fees based on the size of their positions.

Loopring: Protocol fees are allocated to liquidity providers (LPs), insurers, and the DAO as a whole, which incentivizes token holders to behave well.

1. Roadmap

Polygon just announced they will implement the first EVM equivalent of ZK L2. Sandeep also plans to fully decentralize the blockchain within 2-3 years, including powerful products such as decentralized digital IDs that are currently in development.

Arbitrum has not yet released a full roadmap, but there is speculation that they will release native tokens via airdrop at some point.

Optimism has laid out their roadmap in the following chart.

dYdX plans to be fully decentralized by the end of 2022 with the V4 release, which seems to be their main focus and will be a huge milestone for the project. (Translator's note: dYdX will migrate from an ethereum L2 project to the Cosmos ecosystem and move to an L1 project, where the biggest focus will be on the empowerment of DYDX tokens)

Loopring has some major upgrades planned for 2022, including Loopring Earn and zkEVM.

1. Imitator Status

The five projects in this list are all very similar in nature, with Polygon, Optimism and Arbitrum all competing to be the best layer 2 scaling solution.

At this stage, Polygon is undoubtedly in first place from a market cap and "moat" perspective, however, Arbitrum and Optimism are both gaining widespread adoption and are both growing rapidly.

1. Teams and funding

Note: The following funding statistics are from crunchbase.

The Polygon team is fully public (key members include Anurag Arjun, Jayant Kanani, Mihailo Bjelic, and Sandeep Nailwal), and the project has received backing from leading industry investors including Alameda, Binance Labs, and Coinbase Ventures, Polygon has $451.5 million in funding to date, and they have recently announced partnerships with some of the biggest names in the business (including Disney, Reddit, Meta, and Stripe), which suggests they are on the right track.

Arbitrum also has a fully public team, and they are backed by some high-profile investors (including Pantera, Alameda, Mark Cuban, and Coinbase), with Arbitrum's parent company Offchain labs having raised a total of $123.7 million in funding to date.

Vitalik himself is a big fan of Optimism and has expressed support for their new governance structure, and Optimism is also backed by A16z, Paradigm, and IDEO, with a total funding of $178.5 million to date.

dYdX received $87 million in funding from leading investors such as Hashkey, Starkware, and a16z, and their team members are fully disclosed.

Loopring raised $45 million from Kosmos Ventures, G2H2, Neo, Fundamental labs, and Obsidian.

1. Summary

Based on my research and analysis, I gave each project a score (1-10) in each category, and as you can see, Polygon is the clear winner.

Polygon is also currently leading the market cap and the project has really gained some momentum recently due to the upcoming Ether merger. Of course, other L2 projects are also very promising and have great potential for success in the long run.

Note: Against the backdrop of the heated Layer 2 war, author Jake Pahor analyzed the development status of some Ether L2 projects through seven metrics, including protocol revenue, treasury, lock-in situation, token functionality, roadmap, etc., and gave subjective scores to the relevant projects.

I looked at a number of Ethernet L2 projects, both generic L2 (Polygon) and application-specific L2 (dYdX), and in order to keep this article short, the article had to exclude some quality projects that didn't make it into the top 5 (translation: generic zk rollup L2 networks like starknet and zksync, for example, are not yet in the maturity stage)

For this research framework, the authors used The DeFi Edge's project evaluation methodology and then, based on the analysis, provided a score for each project, so you'll need to read to the end to see the results.

1. How much revenue do they generate?

Token terminal provides some very interesting statistics on the total agreement revenue (fees) of these L2 projects in the last 180 days as follows

dYdX $212.2 million Arbitrum $13.7 million Polygon $8.8 million Optimism $8.5 million Loopring $2.5 million dYdX is absolutely crushing the other programs in terms of protocol revenue, and taking away dYdX, you can see in the chart that Polygon has been leading the pack and gaining momentum over the past month.

1. What is in the agreement fiscal pool?

Some important factors about fiscal pools are.

Whether they have different assets or are mostly their own native tokens (meaning more risk) How big is the treasury and how much development can this bring to the project? Polygon: It's hard to find any information on the size of Polygon's treasury, however, we know that Polygon recently had a $1 billion ZKP development fund program and we can assume that Polygon's treasury is much larger than that amount.

Optimism: 30% of the initial token supply (1.29 billion OP) will be allocated to the community fund (EcoFund + RetroPGF), which has a theoretical value of approximately $2.5 billion based on the current market price ($2).

dYdX: 5% of the initial token supply (50 million DYDX) is allocated to the community treasury, which is approximately $113 million based on the current price ($2.27).

Loopring: 20% of the token supply (275 million LRC) was allocated to the Loopring eco-fund, which is approximately $110 million at the current market price ($0.40).

1. Token lock-in situation

If the majority of tokens are still locked, this could create significant selling pressure in the future (you don't want to be liquid for VC exits). The following charts and information are from Messari and coingecko.

Polygon: About 92% of the matic token supply has been unlocked, with the last 800 million tokens to be unlocked by May 2025, and the current liquidity supply is about 9.18 billion out of a total supply of 10 billion tokens.

Optimism: Approximately 5% of OP supply has been unlocked by way of airdrop, with current liquidity of approximately 215 million of the total 4.29 billion OP supply.

dYdX: Approximately 11% of the DYDX supply has been unlocked and the current circulation is approximately 112 million of the total 1 billion DYDX supply.

Loopring: Approximately 90% of the LRC supply has been unlocked and current circulation is approximately 1.245 billion of the total 1.374 billion LRC supply.

1. Token functions and use cases

Polygon : MATIC tokens are used to pay for transactions in the network, you can get rewards by pledging MATIC, the pledge serves to protect the network (translation: this is the case of Polygon L1, Polygon Hermez, Polygon Zero and other Ethernet L2 solutions are not yet live on the main network).

Arbtirum: no tokens have been issued yet, but the network itself has gained significant traction.

Optimism: the rights to the block space are a sustainable source of revenue that drives the OP economic model and grows alongside the network itself.

dYdX: currently DYDX is still essentially a governance token, with holders also receiving discounts on transaction fees based on the size of their positions.

Loopring: Protocol fees are allocated to liquidity providers (LPs), insurers, and the DAO as a whole, which incentivizes token holders to behave well.

1. Roadmap

Polygon just announced they will implement the first EVM equivalent of ZK L2. Sandeep also plans to fully decentralize the blockchain within 2-3 years, including powerful products such as decentralized digital IDs that are currently in development.

Arbitrum has not yet released a full roadmap, but there is speculation that they will release native tokens via airdrop at some point.

Optimism has laid out their roadmap in the following chart.

dYdX plans to be fully decentralized by the end of 2022 with the V4 release, which seems to be their main focus and will be a huge milestone for the project. (Translator's note: dYdX will migrate from an ethereum L2 project to the Cosmos ecosystem and move to an L1 project, where the biggest focus will be on the empowerment of DYDX tokens)

Loopring has some major upgrades planned for 2022, including Loopring Earn and zkEVM.

1. Imitator Status

The five projects in this list are all very similar in nature, with Polygon, Optimism and Arbitrum all competing to be the best layer 2 scaling solution.

At this stage, Polygon is undoubtedly in first place from a market cap and "moat" perspective, however, Arbitrum and Optimism are both gaining widespread adoption and are both growing rapidly.

1. Teams and funding

Note: The following funding statistics are from crunchbase.

The Polygon team is fully public (key members include Anurag Arjun, Jayant Kanani, Mihailo Bjelic, and Sandeep Nailwal), and the project has received backing from leading industry investors including Alameda, Binance Labs, and Coinbase Ventures, Polygon has $451.5 million in funding to date, and they have recently announced partnerships with some of the biggest names in the business (including Disney, Reddit, Meta, and Stripe), which suggests they are on the right track.

Arbitrum also has a fully public team, and they are backed by some high-profile investors (including Pantera, Alameda, Mark Cuban, and Coinbase), with Arbitrum's parent company Offchain labs having raised a total of $123.7 million in funding to date.

Vitalik himself is a big fan of Optimism and has expressed support for their new governance structure, and Optimism is also backed by A16z, Paradigm, and IDEO, with a total funding of $178.5 million to date.

dYdX received $87 million in funding from leading investors such as Hashkey, Starkware, and a16z, and their team members are fully disclosed.

Loopring raised $45 million from Kosmos Ventures, G2H2, Neo, Fundamental labs, and Obsidian.

1. Summary

Based on my research and analysis, I gave each project a score (1-10) in each category, and as you can see, Polygon is the clear winner.

Polygon is also currently leading the market cap and the project has really gained some momentum recently due to the upcoming Ether merger. Of course, other L2 projects are also very promising and have great potential for success in the long run.