Imagine, if you were to start from scratch, how would you construct a vast and thriving L2 ecosystem?

Prior to 2023, public chains/L2s focused on innovative use cases on-chain such as yield, derivatives, and structured products, but they were plagued by the ‘ghost town effect,’ with most networks having dismal user and liquidity numbers. However, in the past year, the L2 track has begun to explore new ideas, among which Blast, a catfish in the L2 track, initiated a start-up at extremely low cost and leapfrogged to billions and even tens of billions of dollars TVL through the expectation of score-based airdrops.

But, has the problem really been resolved? Looking back now, while the L2 track has ended the ‘public chain ghost town’, it seems to have entered a new dilemma of ‘fake TVL prosperity’, with old and new problems becoming the two ends of a seesaw.

Against this backdrop, Morph has provided a ‘two-pronged’ new solution, with testnet score airdrop incentives to cold start and a special fund for ecosystem construction targeting developers/DApps, taking into account both users/liquidity and ecosystem/consumer-grade use cases, and thus seeking to introduce a new solution to end the two opposing extremes of ‘public chain ghost town’ and ‘fake TVL prosperity’.

The “L2 Question”: Traffic or Ecosystem

The emergence of Blast in November 2023 is actually a breakthrough in the market’s dissatisfaction with the previous Ethereum L2 track. Just relying on the expected airdrops, the 5-day TVL exceeded 500 million US dollars, surpassing zkSync and Starknet in one fell swoop. , Linea and other star L2 projects.

You have to know that at that time Blast had not yet launched the mainnet, and there were no users who could participate in the experience of DApp. In this way, TVL still broke through integer levels one after another, and in just a few months quickly attracted a huge amount of funds up to $2 billion:

Second only to the old L2 giants Arbitrum, Optimism, and the Base network supported by giants such as Coinbase, it ranks fourth in Ethereum L2, and the growth rate is crazy.

Blast also sparked a big discussion in the community about L2 liquidity and scenario use cases from time to time. Its novel approach of ‘users and liquidity are everything’ has to some extent subverted the consistent growth mode of L2 before, and is considered to be able to try to break out a new way of TVL before application.

In essence, Blast’s ‘airdrop expectation + social fission’ gameplay essentially subverts the old gameplay of traditional L2/public chains only talking about technology/ecology, closer to the market, and accurately grasps the user’s ‘investment consumption’ psychology, thereby replicating a marketing strategy similar to Pinduoduo in Web3.

This move can be called a dimensionality reduction attack on the traditional L2 growth strategy, so both the dissemination effect and the growth speed are very successful. However, marketing is just a means of attracting traffic in the early stage. The Blast score gameplay and exit mechanism, which were controversial in the community a while ago, show that good ecological construction and service experience are still needed to retain customers (instead of locking customers) in the future.

This also maps out a ‘L2 question’ worth thinking about, that is, should it be like Arbitrum, Optimism and other old L2s, by providing as comprehensive and rich application scenarios as possible to attract users and capital precipitation? Or learn Blast’s approach, first attract and gather a large number of new users and funds, and then attract project parties and DApps to migrate and build?

Both have their own advantages and also face their own new bottlenecks.

The new solution proposed by Morph is that the market (score incentives and other drainage activities) and services (prosperous on-chain scenario use cases) are not a binary opposition.

On the contrary, the two can be effectively connected and matched - while realizing the early drainage of users and funds through score airdrop and other incentive means, a special ecological construction fund facing developers is launched (about 30% of the ecological ratio, it is estimated to be up to Hundreds of millions of dollars), incubators & hackathons and other activities, to carry out rich on-chain scenarios, especially consumer-grade scenario construction, so as to undertake overwhelming users and liquidity:

• In terms of community and users, Morph officially launched the Morph Holesky testnet on May 6, using enhanced performance and infrastructure, which is fully compatible with the upcoming mainnet functions and performance, can be used to preview all functions provided by the mainnet plan, and to seamlessly transition in the future. And launched the corresponding Morph score incentive activities, encourage users to actively interact, participate in early network liquidity and use case testing;
• In terms of ecological construction, Morph continuously holds incubators, hackathons and online and offline lectures and other forms of developer incentives and sharing activities for developers and DApps, encourages and supports AI, GameFi and other different types of projects to be built on Morph, and even promises to launch Special ecosystem fund for developers/DApps to support long-term builders;

How can ordinary users and developers participate?

Looking from the perspectives of ordinary users and developers, what are the specific ways to participate currently?

For ordinary users, the primary option is the “Morph Zoo” inaugural event “Genesis Jungle”, launched on May 13. Currently, users can earn Morph points through DApp interaction, sign-in voting, and platform tasks, accumulating a reference for future token airdrops or other exclusive incentives.

For developers, they face a more diverse range of choices. Whether it’s hackathons or incubator programs aimed at different types of projects such as AI, DeFi, GameFi, Infrastructure, or online and offline WorkShop and lecture activities revolving around various application scenarios of Web3 technology, developers are encouraged to participate in the early construction of the Morph ecosystem. They can also share comprehensive support such as Morph’s initial airdrop and full profits from the first year’s sequencer fees returned quarterly.

Ordinary Users: ‘Morph Zoo’ Inaugural Event ‘The Genesis Jungle’

On May 13, Morph launched a multi-stage plan specifically for community users, known as the ‘Morph Zoo‘. The program aims to attract and reward participants in Morph’s testnet and eventual mainnet. They also opened the first season event, ‘The Genesis Jungle’.

With each step of interaction in the ecosystem, participants will earn Morph Points, which represent their activity, participation, and contribution within the Morph ecosystem. The official documentation also directly implies that “considering future airdrops and other exclusive rewards, Morph points will play an important role.”

Additionally, it’s important to note that Morph points are akin to soul-bound tokens, directly associated with a user’s wallet and non-transferrable. Currently, users can earn Morph points in the ‘Genesis Jungle’ in three main ways: Discovery Trail (DApp interaction), Voice of the Jungle (sign-in voting), and Partners’ Expedition (task platform).

1. Discovery Trail: DApp Interaction

According to official statements, the Discovery Trail section is where users can explore the world of DApps provided by Morph. Here, they discover Morph point rewards during the experience, which is essentially a new round of DApp interaction process for the Morph Holesky testnet.

Currently, the official website has opened four DApps available for interaction. These include the Morph Bridge, a cross-chain bridge that community users are already familiar with, as well as the liquidity protocol BulbaSwap, lending protocol Abra Finance, and NFT trading marketplace Morpha.NFT. The official website indicates that more types of DApps will be introduced and available for interaction in the future.

Morph Bridge

These 4 DApps provide a full set of smooth interaction experiences. Firstly, as with the previous testnet, you can choose ‘Morph Bridge’ to carry out token cross-chain operations between the Ethereum Holesky testnet and the Morph testnet.

Of course, the prerequisite is that we need to have test ETH of the Holesky testnet in our wallet (Morph’s official document also recommends three faucets: QuickNode, Stakely.io, and PoWFaucet).

At the same time, we can also join the Morph Discord community, enter the ‘discord-faucet’ channel, and use the ‘/faucet+ address’ command to obtain test USDT.

After obtaining the test ETH and test USDT of the Holesky testnet, we can carry out cross-chain operations through ‘Morph Bridge’:

Select the token and corresponding amount, then on the ‘Deposit’ page, transfer the token from the Ethereum Holesky testnet to the Morph Holesky testnet. The ‘Withdraw’ page does the exact opposite.

BulbaSwap

Second is “BulbaSwap”. We can use the test ETH and test USDT that were previously cross-chained to Morph Holesky to perform regular Swap and Pool (group LP adds liquidity) operations.

For example, to exchange 5 USDT for ETH: first authorize the USDT contract call, and then confirm the Swap after completion, that is, exchange it for 0.628083 ETH.

Then open the ‘Pool’ page, click on ‘Add V2 Liquidity’, select USDT and ETH, input 5 USDT and it will automatically match the quantity of ETH to form LP. Finally, click on ‘ADD LIQUIDITY’ and confirm it in the wallet.

If you want to remove liquidity later, you can select the corresponding LP position in ‘My Positions’, then click ‘Remove’ and confirm it.

Abra Finance

Abra Finance allows us to have a crypto asset lending experience similar to Aave. Firstly, you can open the ‘Dashboard’ page, select USDT in ‘Assets to supply’, and then click on deposit.

Afterwards, the deposited crypto assets can turn on the mortgage lending function, and then other crypto assets can be selected on the ‘Assets to borrow’ page for mortgage lending.

At the same time, you can view, track, and manage your on-chain lending positions in real-time.

Morpha.NFT

‘Morpha.NFT’, as an NFT trading market, allows users to search for, select any NFT series, and conduct buying and selling operations.

Taking the PandaGD series with the highest trading volume at present as an example, we can choose any PandaGD NFT that is on sale, click ‘Buy’, sign in the wallet to complete the purchase; similarly for selling, click ‘Sell’, sign in the wallet to list it for sale.

2.Voice of the Jungle: Sign-in Voting

The ‘Voice of the Jungle’ section allows users to participate in shaping the Morph ecosystem through voting, thus earning Morph points. It essentially involves voting for projects currently listed on the Morph’s official website.

There are currently 9 voting options, in addition to the aforementioned BulbaSwap, Abra Finance, and Morpha.NFT projects, there are Public AI, PingPong, BitMetis, Starland AI, Rap Chain, and Song Protocol. These are likely to be the candidates for the next launch on the Morph Holesky testnet or even the mainnet.

The key at this stage is the ‘voting right’. Initially, users cannot participate in voting and must obtain voting rights through ‘daily sign-in’.

It’s important to note that the official document emphasizes that ‘only voting behavior can earn Morph points, merely accumulating voting rights without using them will not earn points’. This suggests that ‘voting’, not ‘sign-in’, is the only determining factor for earning points or not.

The corresponding ‘daily sign-in’ rules are quite interesting. Overall, it’s based on a seven-day cycle, with 2 times as the reward multiplier, and the multiplier is increased in stages to encourage continuous sign-ins: 2 (the first day) + 4 (the second day) + 6 (the third day) + 8 (the fourth day) + 10 (the fifth day) + 12 (the sixth day) + 28 (the seventh day, an additional 2 times reward, namely 14*2) = 70.

On the eighth consecutive day of sign-in, it starts again from the first day of a new cycle. However, to reward users for persisting in sign-in, on the 14th consecutive day, the additional multiplier reward will increase to 2_2=4 times. This means on the 14th day, you actually get 14_4=56 voting rights. The last day of each subsequent cycle follows this pattern, adhering to the increasing pattern of 28, 56, 84, 112.

For example, if you sign-in continuously for 4 weeks (28 days), you will get a total of 448 voting right rewards: the same incremental voting right for the first 6 days of each week (2+4+6+8+10+12) x4=168, plus the increasing multiplier reward for the seventh day of each week (28+56+84+112) =280, the sum of the two equals 448.

In summary, persisting in daily sign-in can earn more voting right rewards. The rewards will accumulate and grow as the number of sign-in days increases, especially when completing a whole cycle, the increase in rewards will get bigger and bigger.

3.Partners’ Expedition: Task Platform

The third section, Partners’ Expedition, allows users to enter Morph’s partners’ list, explore new knowledge and networks, and earn Morph point rewards by completing tasks for Bitget Wallet and Galxe.

The tasks for Bitget Wallet are quite simple. Users need to enter the event page, add the Ethereum Holekey testnet and Morph Holesky testnet, and complete token cross-chain operations (for new users). As of the time of writing, over 40,000 users have participated.

The tasks for Galxe are more comprehensive. Users need to join the official Discord community, Telegram group, experience the Genesis Jungle, deposit ETH via the cross-chain bridge, perform token Swaps, and lending interactions. As of the time of writing, over 27,000 users have participated.

Finally, when the ‘Genesis Jungle’ event ends, Morph will tally up the total points earned by users. These points will serve as an important reference for users to receive future token airdrops and other exclusive rewards.

Developers: Seizing the Opportunities in the Ecosystem Development Boom

From the perspective of developers, Morph has recently launched a series of ecosystem activities and long-term plans, including incubators/hackathons aimed at developers and projects in various sub-fields, with generous financial and other forms of support.

Combined with its incubator program and the types of DApps already open for interaction, Morph is likely to invest more resources in promoting the incubation of Consumer (social, entertainment, points), DeFi, AI, and other types of projects. This is its main blue ocean to be built, which can develop a more comprehensive L2 ecosystem (recommended viewing “How to deploy contracts on Morph“), which is the visible window of opportunity for developers and project parties in the upcoming Morph ecosystem.

Sparkloom Builder Program

On March 25, Morph announced the launch of the Sparkloom Builder Program, which will last for 4 months, including an online hackathon and incubator program. The hackathon has a prize pool of $20,000, and the winner will be invited to join the Morph Incubator Program. The final winner of the incubator will have the opportunity to receive up to $100,000 in funding, and share 30% of Morph’s total airdrop.

Sparkloom Incubator Program

In addition, last month, Morph launched the 2-month Sparkloom Incubator Program from April 29 to June 30, open to high-quality projects in various fields such as DeFi, GameFi, Infrastructure, NFT market, Metaverse/NFT, Middleware/Tools.

Morph is committed to providing a hub for the winners of this incubator program, offering a full range of support including funding, airdrops, development guidance, and more:

• Quality mentor guidance courses: Selected projects can participate in tailored guidance courses, covering basic skills such as Web3 community building, marketing promotion strategies, token economics, and smart contract audits, and can obtain professional guidance from heavyweight mentors from well-known institutions such as Dragonfly, LayerZero, The Block, Nansen, Pyth, etc.
• Funding support and airdrop incentives: Projects committed to long-term development in sync with the Morph ecosystem will receive grants of up to $100,000 and will share 30% of the total initial airdrop of Morph.
• Access to over 30 million crypto users: Through Morph’s strategic partnerships with top exchanges such as Bitget, MEXC, and top wallets such as Bitget Wallet and Trust Wallet, selected projects will have the opportunity to directly reach global users.
• Access to top resources: Selected projects will get first-hand links to top resources in the industry, including renowned investors worldwide, outstanding project founders, top exchanges, etc.
• Full return of the first year’s sequencer fee profits: After receiving the profits of the first year’s sequencer fees, Morph will return them to the selected projects, and payments will be made quarterly.

In summary, both developers and users/funds are a must for an L2 to build a prosperous ecosystem. Both hands must be hard, so how to properly incentivize both sides and guide more users and developers to participate has become the key to development from 0 to 1 and then to 100.

From this perspective, the new solution given by Morph, whether it is the current ‘Morph Zoo’ related point events that have just started the first season, or the incubator & hackathon & online and offline developer activities launched in the past few months, are all to provide the maximum benefits for early participating users and developers, to jointly promote a positive feedback loop of prosperous on-chain scenario use cases and user funds.

And this means a rare window of opportunity for users/developers with keen senses and strong execution:

Whether it is as a community user to earn points through ‘Morph Zoo’ activities or as a developer to take the lead in deploying Consumer Dapp, AI, GameFi, and other different types of DApps to gain a first-mover advantage, it is a blue ocean period. The participating users, projects, traffic, and community will be each other’s greatest boost.

Everything in the past is just a prelude. From a macro perspective, if everything goes well, this combination of punches does not rule out laying the groundwork for the growth of new DApps, new users and ultimately Morph ecosystem TVL, thus taking a completely different step from the last wave of L2/public chain fever.

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