Menu
Search
About
It can be difficult to extrapolate the precise differences between a good sustainable product and temporary financial incentives in the world of crypto.
Crypto-native products are extremely clunky, asking users to jump through any number of weird hoops just to move a bit of money around. But if moving that money around means that you can earn even more money, then that product can enjoy enormous traction.
DeFi offers another excellent example of this dynamic: airdrops, yield farms, and so on. That same murky dynamic is at play as the layer-2 bridging service Hop Protocol and the Ethereum scaler Arbitrum teamed up for a unique campaign.
Before digging in: Hop is an on- and off-ramp from various layer-2 scaling solutions. With Hop, you can move money from Polygon to Arbitrum, and from Ethereum to Optimism (and back again). Though bridges like this already exist, many of them often have a waiting period before you can get your money out.
For instance, it can take a week to withdraw bridged funds from Arbitrum. Yikes. (As for Arbitrum, check out our Learn article that dives deep into this Ethereum scaling solution.)
Activity for both products is booming. Arbitrum, at least for a brief moment, even saw higher gas fees than Ethereum’s mainnet.
The reason behind this massive surge is Arbitrum’s so-called Enter the Odyssey campaign.
For two months, the team behind the scaling solution expected to dole out different NFTs to users that execute unique tasks within the Arbitrum ecosystem. We’ll get to why this expectation has fallen short in just a moment.
The task for the first week (which began on June 21) was simply to bridge assets over to Arbitrum from a select number of crypto bridges. Additionally, per Arbitrum, “Users that use the bridge that ends up getting the most volume at the end of the week will also be able to claim a bonus NFT.”
Of the roughly 20 bridges available, which do you think won?
That’s right, Hop Protocol—and it wasn’t even close.
Though the campaign appeared well-designed and inclusive, on Thursday Arbitrum had to hit pause on Odyssey.
“Because of the heavy load being put on the chain causing higher than normal gas fees, we’ve decided it is best to pause the Odyssey until Nitro is released so that all communities and projects within Arbitrum continue to have a friction-free experience,” tweeted the team on Wednesday.
Nitro, by the way, is yet another piece of scaling technology that will be put in place shortly, according to the project. Currently, Arbitrum slows the network whenever there’s extreme capacity. Nitro would essentially take off these training wheels.
Concluding, Arbitrum has been brought to its knees thanks to its incentive program, which seems like a bad outcome given the fact that it's supposed to help crypto scale.
As for Hop, however, the service performed superbly, onboarding more than 165,000 new users.
Unfortunately for Arbitrum, Hop may have been too good a product. After all, users could have chosen any number of other bridges.
