A Zoom on Scroll's (SCR) airdrop and its impact on on-chain activities
October 30, 2024
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After more than a year of anticipation and rumors, on October 22, 2024, Scroll proceeded with the launch of its native token. The distribution of SCR was conducted through an airdrop, though the conditions did not entirely satisfy the community. In this analysis, we’ll examine the details of the Scroll airdrop, the token allocation, its impact on on-chain activity, and the conclusions we can draw.
Overview of the Scroll (SCR) Airdrop
Scroll officially announced in a blog post the launch of its native token (SCR) on October 21, 2024, with the distribution carried out the following day via an airdrop. In total, Scroll released 7% of the total supply of SCR, distributed to over 570,000 eligible wallets.
This first airdrop aims to reward those who contributed to the growth of the Scroll ecosystem, including regular users, protocols, as well as technical contributors, international community members, hackathon winners, and Zero Knowledge technology researchers.
Despite this broad selection of participants, voices within the community criticized the token allocation, viewing it as centralized. Indeed, around 75% of the SCR distributed at launch is concentrated in just 5 wallets. Additionally, active users who heavily “farmed” the airdrop ended up with allocations worth only a few dozen dollars, far from covering their transaction costs.
It’s worth noting that the wallets receiving massive allocations are mostly exchange platforms or smart contracts for community reserves and not individual users. For example, Binance received 7.5% of the total SCR supply in exchange for a campaign on the platform a few days before the airdrop.
SCR Token Allocation at Launch
The Community Drop
The Community Drop rewarded users who actively interacted with the Scroll blockchain. A total of 55,000,000 SCR was allocated (representing 5.5% of the total supply), distributed as follows:
- 40,000,000 SCR (4%) allocated to active participants who accumulated at least 200 Marks as of October 19, 2024;
- 10,000,000 SCR (1%) for the “Flat Boost,” a mechanism designed to ensure that each user receives a reward even if they did not meet the required criteria;
- 5,000,000 SCR (0.5%) as an Onchain Bonus for participants who held a special ENS on Ethereum, made a Gitcoin donation above $0.01, participated in Juicebox campaigns, or used a smart wallet on Scroll.
The Binance Launchpool
In total, Binance’s Launchpool received 55,000,000 SCR (representing 5.5% of the total supply), with 85% shared among users. The farming period lasted from October 9 at 00:00 to October 10 at 23:59 and required BNB staking.
Ecosystem Protocols
As part of this initial airdrop, Scroll allocated 6,977,000 SCR to native ecosystem protocols. Over 100 projects were included, with allocations based on their total value locked (TVL). This marks the beginning of Scroll Foundation’s activities, aimed at supporting and encouraging builders.
Various Contributors
- Technical contributors to Scroll: 1,150,000 SCR for the 115 open-source contributors who worked on Scroll’s code, with a reward of 10,000 SCR per person.
- Researchers specializing in ZK technologies: 275,000 SCR distributed among 90 authors of Zero Knowledge Proof publications and 20 symposium ZK conference speakers, with 2,500 SCR each.
- Open-source contributors: 1,715,000 SCR for 686 contributors who submitted at least 20 pull requests on Scroll’s GitHub, with 2,500 SCR each.
- Other contributors: 150,000 SCR for three data-specialized entities (DeFiLlama, L2Beat, and GrowThePie), each receiving 50,000 SCR.
- Public goods organizations: 1,800,000 SCR to support Protocol Guild, PSE, The Security Alliance, EAS, Gitcoin, and ETH Staker.
International Scroll Community
- Community event organizers: 1,810,000 SCR for 91 Scroll-related event organizers, with individual rewards ranging from 10,000 to 25,000 SCR.
- Hackathon winners: 1,230,000 SCR for 492 winners, each receiving 2,500 SCR.
- “Road to Devcon” program: 100,000 SCR for 50 communities, each receiving 2,000 SCR.
- Translators: 100,000 SCR for 50 translators of the ethereum.org website, with 2,000 SCR each.
- Discord moderators and educators: 150,000 SCR distributed among 24 moderators, each receiving between 5,000 and 10,000 SCR.
Impact of the Airdrop on Scroll Metrics
The Scroll airdrop was one of the most anticipated in recent months. Although no clear communication confirmed this distribution, it seemed a logical follow-up to the airdrops of other layer 2s (Optimism, Arbitrum, Starknet, and zkSync). Furthermore, the “Scroll Sessions” campaign to distribute Marks (similar to point distribution) announced last April reinforced this theory.
Finally, on October 8, 2024, the Scroll Foundation published a blog post officially announcing the airdrop, revealing the details of the tokenomics and SCR distribution. This post also included the snapshot date (October 19, 2024) and the airdrop date (October 22, 2024).
This announcement had an immediate effect, as the Total Value Locked (TVL) on Scroll jumped from $579 million to $976 million on the snapshot day-a record high for the chain. However, this rise was short-lived, as TVL started decreasing that very day. At the time of writing, TVL has dropped by $550 million, a 44% decrease since the snapshot.
This decline is likely due to users withdrawing their funds from various protocols after attempting to qualify for the airdrop. Since the snapshot, here are some TVL statistics: Pencils Protocol (Yield Farming) dropped by 24%, Aave (Lending) by 16%, Kelp (Restaking) by 54%, and Ambient (DEX) by 35%.
The trend is similar for the number of transactions and active addresses. Upon the publication of the blog post (October 8, 2024), these on-chain metrics surged, likely due to last-minute users aiming to become eligible for the SCR token distribution. However, they dropped significantly the day before the snapshot: daily transactions decreased from 935,600 to 284,100 (-69.6%), and daily active addresses fell from 145,000 to 70,500 (-51%).
Despite a peak in activity on October 22 during the airdrop-explained by the token claim process for the half-million eligible wallets-key metrics have since leveled off toward the end of the month.
From a purely financial perspective, SCR launched at $1.33 with a market capitalization of $253 million. At the time of writing, it trades around $0.76, representing a market cap of $144 million and a 42% decline.
Key Takeaways
Scroll received $80 million in funding through two financing rounds: $30 million in the Series A round in April 2022 and $50 million in the following round in March 2023. The latter brought Scroll’s total valuation to $1.8 billion, with investments from Polychain Capital, Bain Capital Crypto, and Sequoia’s Chinese division.
However, SCR launched with a Fully Diluted Value (FDV) of $1.33 billion, 26% lower than the investment price for VCs who joined during the second funding round. At the time of writing, Scroll’s FDV stands at $760 million.
For several months now, tokens of projects heavily backed by investment funds, VCs, business angels, or even KOLs have experienced particularly challenging launches. These projects often display very high FDVs at launch, forcing them to release only a small portion of their supply initially, leading to massive token releases over time.
As a result, many investors lose interest in these assets, despite their promising fundamentals, preferring instead to turn to more lucrative investment opportunities. This observation, in particular, fuels the thesis of a cycle focused on meme coins.
Although Scroll’s airdrop has led to fewer negative reactions than those of Starknet or zkSync, the impact on the market and on-chain metrics is significant. It will be crucial for Scroll (and, by extension, all the projects described in the paragraph above) to find mechanisms to continue attracting users over the long term.
