Whether people acknowledge it or not, “Fundamental investing often doesn’t yield returns” has become a snapshot of the current state of crypto investing.

While fundamental value investing yields minimal results, the Meme sector consistently leads rebounds after market crashes, with new Memecoins emerging as the hottest trends.

The powerful inclusivity and transformative ability of Meme culture have generated massive wealth effects in the crypto world: Memes can quickly absorb and transform various societal trends, converting them into hot money within the crypto space.

The phrase “Everything can be a Meme” finds its best expression in the crypto world, where a series of Meme-driven financial phenomena points directly to the essence of wealth creation: the attention economy.

In the last bull market, Memecoins might have been the dessert after the main course, but a closer look reveals that this was merely a reflection of the market’s shifting focus, with attention being diverted by other narratives. Today, the resilient performance of Memecoins highlights the immense potential embedded in the attention economy.

The fragmentation and rapid iteration of crypto information mean that the market is never short of hot topics. Furthermore, as the crypto market matures, participants are increasingly determined not to act as exit liquidity for others. Thus, attention has become a scarce resource in the market.

Guiding and effectively utilizing market attention to unlock the vast value behind the attention economy has become a key issue in the crypto world.

In response, Layer3, which has long been focused on attention monetization, has already formulated its answer.

As the first crypto protocol to commercialize the attention economy, Layer3 aims to build decentralized on-chain infrastructure to unleash the immense application value behind the attention economy.

Layer3 will open its airdrop allocation check on July 24th, with the official TGE to follow shortly after.

This article will explore how the Layer3 platform disrupts market conventions through its cross-chain identity and innovative distribution protocol. By leveraging a pioneering tokenomics model, Layer3 aims to bring about a fair token distribution and a future flywheel effect within the ecosystem, effectively capturing the market potential of attention monetization.

Beyond a Task Platform: Layer3’s Ambitious Vision

For seasoned on-chain players, Layer3 is certainly a familiar name. By entering the market as a task platform, Layer3 has aggregated a wide variety of projects, enabling users to interact with cross-chain projects through a single platform. Riding the wave of the bull market, various blockchain ecosystems have seen a resurgence, and Layer3’s user base and platform interaction data have also reached new heights.

The platform has processed over 100 million completed interactions, boasts more than 4.3 million users, and has minted nearly 210 million CUBEs. It has also established partnerships with high-quality projects such as Robinhood and Linea.

But beyond its impressive data performance, Layer3 is not just a “bounty task platform” as the market perceives it. Layer3 sees itself as a “cross-chain identity and token distribution protocol.” Clearly, Layer3’s ambitions go far beyond being a competitive task platform; it aims to establish a long-term narrative for the future.

Omnichain identity and intelligent distribution protocol allow users to “only make one trip”

Layer3 has aggregated almost all of the current popular ecosystems, and the on-chain footprints generated by interaction tasks from these ecosystem projects have led Layer3 to focus on the decentralized identity track. Its unique distribution protocol supports multiple different blockchains and decentralized applications within various ecosystems, creating a unified on-chain identity view for users who interact across these chains and dApps. With Layer3’s on-chain identity, users no longer need to switch between platforms or gather information to diversify their on-chain footprints.

Each time a user completes a project listed on the Layer3 platform, they receive a CUBE as proof of completion, with their activities across fragmented chains recorded via their public key. In other words, CUBE can be seen as another form of on-chain proof of identity, effectively solving the problem of fragmented on-chain identities and unifying users’ cross-chain identities and activities.

Layer3 leverages technological innovation to organize and consolidate users’ on-chain footprints, segmenting and sequencing different interaction standards like asset ownership, on-chain activities, credentials, social graphs, and task participation. Ultimately, Layer3 systematically issues various interacted tokens to users at specific times, completing a fully automated distribution process.

By providing a widely used and verifiable “on-chain proof of attention” protocol, Layer3 helps projects effectively attract and retain users. At the same time, the ease of project interaction and customized token distribution offered by Layer3 continually boost user engagement, creating a flywheel effect within the ecosystem.

Funding Background and the Strong Team

In June of this year, Layer3 completed a $15 million Series A funding round, led by ParaFi and Greenfield Capital, with participation from Electric Capital, Lattice, Immutable, Tioga, LeadBlock, and Amber, among others. Combined with the previously undisclosed $3.7 million in strategic funding raised in 2022 and the $2.5 million raised in 2021, Layer3 has now secured a total of $21.2 million in funding.

This strong capital injection provides Layer3 with the confidence to realize its future vision, while the pragmatic and long-term-oriented team offers a solid and robust framework to support Layer3’s steady progression towards the future. Additionally, the founding team members of Layer3 are all graduates of top universities and have extensive experience in their respective fields.

Dariya Khojasteh: Co-founder & CEO
Layer3’s co-founder and CEO, Dariya Khojasteh, graduated from the University of Southern California. The wealth of knowledge and skills he accumulated during his university years laid a solid foundation for his entrepreneurial journey. Dariya has played a key leadership role in the company’s strategic direction.

Brandon Kumar: Co-founder
Brandon Kumar graduated from George Washington University, where he gained extensive knowledge and practical experience in investment and finance. Before founding Layer3, he served as Vice President at Accolade Partners, responsible for investment and strategic decisions. His academic and professional background has provided crucial support for Layer3’s success.

Peter Ng: Head of Engineering
Layer3’s Head of Engineering, Peter Ng, graduated from Columbia University and previously served as CTO at Mojito.

Dual Burn + Triple Staking: A Sophisticated Tokenomics Model

Having discussed Layer3’s innovative on-chain identity and distribution methods, it’s clear that the tokenomics model is a crucial component of the entire structure when it comes to value distribution. The official whitepaper reveals that Layer3’s tokenomics model introduces several new paradigms.

The total supply of Layer3’s token, $L3, is capped at 3,333,333,333, with 51% allocated to community airdrops. The brilliance of this token model lies in its dual burn + triple staking mechanism, which is designed to promote deflation, resist inflation, and ensure the token’s positive growth.

Dual Burn Promotes Deflation

Layer3’s dual burn mechanism applies to users who interact with both sides of the platform:

• Project Community Entry Tokens:
  Project communities wishing to publish tasks, set incentives, and issue CUBE tokens through the Layer3 platform protocol must purchase and burn a certain amount of $L3 tokens. Communities can also vote to decide whether to use Layer3 protocol revenue for buybacks or burn mechanisms for project participants.
• Advanced User Privilege Tokens:
  Users can burn $L3 tokens to gain ecosystem privileges with Layer3 partner projects, such as early access, token discounts, or exclusive NFT rewards.

Through this B-side entry fee + C-side VIP burn-for-rights mechanism, Layer3 establishes a reasonable burn model to ensure future token deflation. Coupled with future protocol revenue buybacks, Layer3 thoughtfully addresses and leverages genuine user needs from both ends.

Triple Staking Resists Inflation

In addition to the innovative deflation mechanism, Layer3 introduces a layered staking model to combat inflation.

Layer 1 is the common staking mechanism for $L3, which offers interest returns and ecosystem governance rights. The governance process is detailed in the protocol governance section of the whitepaper.

Layer 2: After staking $L3, users can receive rewards in tokens from other partner projects, exclusive tasks, and incentive measures. These include but are not limited to early access to new projects, special airdrop events, and unique incentive plans. Different levels of rewards and experiences are unlocked based on the amount of $L3 staked.

Layer 3: Users who complete a certain number of tasks are eligible for future airdrop multiplier rewards. For example, a user who completes 10 tasks might receive 1.5x $L3 rewards, while a user who completes 20 tasks could receive 2x rewards.

Through the layered staking model, the returns for stakers are no longer solely tied to TVL (Total Value Locked). Active participation in Layer3’s activities can maximize user rewards and provide ordinary players with fair opportunities, escaping the staking “Matthew effect.”

With the combination of a triple-staking model and dual burn mechanism, the protocol can lock up a large number of $L3 tokens while simultaneously driving continuous token deflation, stabilizing and increasing the token’s value. At the same time, Layer3’s unique product features allow the ecosystem token to capture more attention and external value (such as tokens from partner projects). Thus, the $L3 token economy model no longer relies on a zero-sum game among token holders within the ecosystem but maintains internal ecosystem operation by continuously capturing external value, leading to a sustainable development model with a positive feedback loop.

Conclusion

Layer3 made its debut as a task platform, using its ‘project aggregation’ functionality to benefit users on both ends. It not only helps end-users aggregate the entire on-chain ecosystem, reducing the complexity of individual users’ on-chain exploration and lowering interaction time costs, but it also successfully aggregates the fragmented attention of the market for B-side project communities, guiding on-chain users to interact in a concentrated manner, and accurately meeting the needs of both ends.

The efficient token distribution mechanism and sophisticated tokenomics model continually capture attention within the platform and even from external ecosystems, positioning Layer3 to potentially become the central hub of the crypto attention economy, unlocking the future potential of this burgeoning sector.

Learn More:

• Layer3 Project Website: https://app.layer3.xyz/quests
• Layer3 Official Twitter: https://x.com/layer3xyz
• Layer3 Official Whitepaper: https://help.layer3.xyz/onboarding
• Layer3 Foundation: https://docs.layer3foundation.org

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