Market Agenda, Scroll and Optimism Token Incentives

Bitcoin is closing the week on a horizontal course at 62500 levels. The over $300 million inflows flowing into spot Bitcoin ETFs this week exceed the outflows experienced last week. Despite this, the loss of value due to last week’s geopolitical tensions has not been closed. On the US side; Even though inflation data is slightly above expectations, expectations for an interest rate cut continue at the FED meeting in November.

Analysts’ market expectations are positive due to reasons such as interest rate cuts, the uncertainty that will end with the approach of the US presidential election, and the expectation of liquidity inflow to the markets with the incentive packages expected from China.

In the cryptocurrency ecosystem, one of the controversial topics of the week is the issuance of tokens by projects that are on the path to decentralization and the distribution of these tokens. These distributions, which are made by projects as liquidity on the network, as payments to investors and business partners, and as incentives to developers and users, are discussed because they affect the earnings or ability of many people.

This week, Scroll, an Ethereum scaling solution, announced its token distribution plan. The project made its listing agreement with Binance; Binance allocated 5.5% of the supply to its users in exchange for locking their assets for two days. It distributed a 7% supply to users who have been using the Scroll network for more than a year and locked their money. Allocating a significant amount of token incentives to a central exchange was met with reaction on social media.

It is a fact that projects need to include a large number of users in the system in order to achieve a truly decentralized structure, but it is debatable how logical it is to play into the hands of central players in this way.

In this world where the majority of people act for economic gain, I find Scroll’s token distribution risky for the web3 world. Because it rewards users within the central structure more than users who support decentralization. This may harm both the Scroll and the ecosystem. Such approaches may give users the message that it is more advantageous to keep their assets in centralized structures.

While this approach of Scroll was criticized for collaborating with centralized structures, the distribution of the Optimism network in the same period offers a model that supports decentralization. In the fifth round of distribution, all OP tokens, equivalent to approximately 16 million dollars, were distributed to 55 thousand users who met the network usage criteria. I like these user and usage focused incentive distributions of the Optimism project. At the time, Optimism also gave a serious token incentive of 118 million tokens to launch the Base project of the Coinbase exchange on its own network and to support future applications. It is much more innocent because it is an incentive given not to those who are centralized, but to those who are on the path of decentralization.

Token distribution models have a critical role in the success of projects and the future of the ecosystem. I believe that models that encourage decentralization will create a healthier ecosystem in the long run.

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