A recent funding round, led by ParaFi and Greenfield Capital, piqued my interest. Initially perceived as merely a task platform, Layer3 has impressively secured $2.5 million in 2021, $3.7 million in 2022, and a significant $15 million in 2024, prompting reflection on its strategic position and potential in the market.

overview

We’ve observed the rapid expansion of on-chain communities, where tokens serve as the most effective tools by offering a shared purpose, goals, and interests. However, when token prices decline, these communities can become unstable. This instability arises when participants, driven by the excitement of rising values, struggle to identify whether their engagement is rooted in shared interests and values or other factors. Consequently, they may gradually drift away from the community.

The central challenge for Web3 projects is capturing user attention in such a fragmented landscape. Solely relying on individual marketing strategies often falls short. In an era where airdrop culture is prevalent, platforms like Layer3 are essential—not as a specific Layer 3 chain, but as an application on the public blockchain. Layer3 acts as a hub for aggregating and distributing attention resources, enabling users and project teams to access the resources they need through comprehensive identity infrastructure.

Layer3 offers new users an engaging entry point into the Web3 ecosystem while encouraging existing users to explore new protocols and applications. Thus, Layer3 represents more than just a platform; it embodies a novel token economic model that integrates GameFi with the attention economy. By leveraging a trinity strategy—attention economy, full-chain identity, and token distribution protocol—it seeks to unlock a trillion-dollar market potential.

Current State of Web3 Task Platforms

The growing marketing needs for Web3 task platforms have fueled their rapid expansion, categorized into three types: traffic platforms (e.g., Galxe, SoQuest, TaskOn), educational platforms (e.g., Layer3, RabbitHole), and niche platforms (e.g., Phi Land, Dework). More details are outlined in the table below.

[Categorized Project Overview]

Traffic platforms draw users through tasks, educational platforms deepen users’ understanding of crypto projects, and niche platforms target specific areas. Currently, market enthusiasm is waning, with second-tier platforms experiencing slowed growth, facing competition from top platforms and challenges of sameness. Enhancing user engagement and addressing bot issues are crucial for task platform development. The profit model is underdeveloped, and future competition will focus on innovation and user conversion.

Platforms must evolve into long-term traffic hubs, improve user experience, and develop unique profit models. Exploring how to reunite communities through shared interests to create value is a critical growth area for the future.

Many Web3 airdrops essentially blend future incentives with community participation, boosting value by creating token scarcity. However, relying solely on future consumption to build value isn’t sustainable for any project’s long-term success.

Thomson highlighted a key internet issue: it’s an abundant world, and a new power lies in understanding this abundance, indexing it, and finding what’s valuable amidst the vastness. Google holds this power.

Similarly, Web3 is an abundant world, yet until now, no one had consolidated this abundance. Communities struggle to identify or reward their most active members, leading to wasted potential.

Interestingly, as understanding evolves, the importance of attention is being recognized. Attention, akin to a token-bound soul, gathers valuable Web3 resources by tracking user participation. Projects and individuals can connect through shared traits.

Stepping back, envisioning a new attention economy model and a social graph of attention resources offers greater value to participants.

Why does this matter? Because Web3 creators need insights into which audiences their work attracts. Let’s explore how Layer3 envisions the future:

Layer3 workflow

3.1 For C-side users

The core value of Web3 is to return data and value control to individuals. Layer3, as a full-chain identity infrastructure platform, is working to realize this vision by maximizing the commercial benefits of data while ensuring that data comes from real individuals, thus returning the generated value to them. For ordinary users, the main concerns are:

1. How to find high-value projects that suit them?
2. How to achieve continuous income from personal data?

These are essential for the platform to generate sustainable value. Here’s a brief overview of how Layer3 achieves this. Layer3’s task system is structured from broad to deep:

Breadth: Layer3 categorizes tasks by ecosystem, with different ecosystems forming major categories, and each category containing different tasks.

Depth: Similar tasks progress in a game-like manner, with varying difficulty levels offering different experience points and rewards. Completing a task grants a blockchain identity NFT CUBE, which records the user’s data.

Benefits for Users

Quick Subscription and Project Identification: Users can quickly subscribe to all projects they are interested in. By assessing a project’s popularity and overall task progress, they can gauge its development prospects and swiftly identify quality projects.

Blockchain Identity and Income: Upon completing a task, users can mint a CUBE as their blockchain identity, providing a means to earn income. When other developers or projects need to access this CUBE, they must pay a fee, part of which is returned to the entire ecosystem. The level of income depends on user activity on the platform, promoting the idea that more effort leads to more luck, thus creating a path to wealth.

Multiple Benefits: Leveraging Layer3’s ecosystem, users can earn CUBEs by completing tasks, which are a factor in receiving Layer3 airdrops. Additionally, by engaging with quality projects before they issue airdrops, users can benefit from obtaining a larger share when the airdrops are eventually distributed, achieving multiple benefits from a single effort.

3.2 For B-side users

In Web2 projects, major advertising platforms can deliver targeted and user-friendly ads by leveraging users’ historical online behavior, which has fueled the rise of personalized advertising. This capability is largely due to credential data and big data analytics, one of the key application areas for data credentials. Web3 follows a similar path. The blockchain’s traceability and immutability make it particularly suitable for creating and tracking credential data. Examples of on-chain credentials include credit records from lending projects where users have not been liquidated, and records of providing liquidity in certain LP pools. These behavioral credentials can significantly aid project teams in their operations and marketing efforts.

The Project Galaxy team emphasizes: “Digital credentials are crucial because they have frequent application scenarios. Protocol developers can use credentials to calculate user credit scores, identify target audiences, and reward community contributors. As Web3 and DAOs evolve, participant behavior data in the Web3 space will grow exponentially, and Project Galaxy will offer the essential infrastructure to help these new participants establish vital digital credentials.”

How does Layer3 collect on-chain credentials, and how does it support project teams? We will explore these questions from several angles.

1. CUBE credentials

On-chain data credentials function like resumes, recording personal actions. On Layer3, these resumes are captured as CUBEs, represented by ERC-721 tokens. Each CUBE includes various applications, chains, and ecosystems related to different tasks. These credentials help users discover new opportunities and allow protocols to identify top-quality users. By minting a CUBE, users can unlock rewards in Layer3’s attention economy, such as tokens and dynamic rewards for task completion. This encourages more participation, leading to the generation of additional credential data. These CUBEs, with their extensive on-chain data, serve as a valuable attention resource. Why is this important? Because each blockchain participant has their own focus, and if project teams can effectively identify and harness these attention resources, they can better target promotions and distribute rewards, thereby increasing their market share and strengthening their position. Layer3 has built this resource into its infrastructure, enabling any organization in need to access these attention resources by creating open identities, incentives, and interface networks owned by participants.

For projects looking to integrate with Layer3, they can easily embed the Layer3 experience into their website with just two lines of code. Additionally, anyone can embed tasks or Streaks in their blogs, technical guides, or internal documents simply by pasting a link, without any extra coding! This is a cost-effective promotional strategy for small projects, allowing them to draw users directly to their platform by interacting with Layer3’s dynamic ecosystem, alluring rewards, social features, and partnerships. Moreover, Layer3 integrates all the necessary tools for tasks. For instance, if tasks need to be performed on Chain A but assets are available on Chain B, the cross-chain bridge within Layer3 can facilitate asset transfers. Importantly, cross-chain operations are also a fundamental task on Layer3, helping users evolve from beginners to seasoned participants. This leaves project teams with users who possess their own insights and understanding, making them more discerning yet more engaged and active.

In conclusion, Layer3 is not just ToC (to consumer) or ToB (to business); it acts as a bridge connecting ToC to ToB, providing a welcoming and efficient platform for both sides to move from acquaintance to understanding, thus finding a suitable “partner.” The Layer3 protocol creates a virtuous cycle: new protocols attract new users, and new users draw in more protocols, forming the foundation of a crypto marketing solution. Even if campaigns or airdrops occur outside Layer3’s infrastructure, contributors will organize and promote them for user exploration, offering a global access point for each ecosystem.

Layer3’s Token Economy

4.1 Why is the token economy so important?

The growth of any Web3 project hinges on the supply-demand relationship. Tokens form the core of this relationship, making the design of the token economic model critical. It influences both the short-term and long-term supply and demand dynamics of the project. A well-crafted token economic model not only secures the token’s long-term value but also establishes a foundation for the project’s sustained value. For a deeper dive into the theory and impact of token economics, refer to “In-depth Understanding of Token Economics” (see Appendix).

4.2 Exploring Layer3’s Token Economic Model

Layer3, as the first platform to develop a full-chain identity infrastructure centered on the attention economy, can be analyzed from two main perspectives:

1. How does Layer3’s economic model support the project’s long-term sustainability?
2. How does its economic model provide real benefits to users?

As a platform that consolidates attention resources, it is vital to ensure that end-users receive benefits while simultaneously delivering high-quality user traffic to project developers. This balance is key to the platform’s sustainable growth.

Here’s a summary of the components of Layer3’s economic model:

The economic model is examined from three angles: token supply, token utility, and token distribution. There are various approaches to analyzing the token framework. For more in-depth insights, check out “Token Economics: An Overview of Token Economic Models in Mainstream Web3 Projects” (see Appendix).

1. Token supply

[Note: Current market value and circulation figures are estimates]

Layer3’s economic model is based on deflation. The value of a token is influenced by supply and demand, and to avoid it becoming a worthless “air coin,” three aspects are vital, with the burning mechanism being the most crucial. This mechanism involves reducing the token supply, leading to deflation, while increasing the supply results in inflation. This is determined by the protocol design at the supply level of the economic model. Layer3’s burning mechanism operates on two levels:

1. From the user’s standpoint: Within Layer3’s economic model, user actions are tied to the burning mechanism. Users can gain ecosystem privileges by burning L3 tokens. For instance:
   • Users can access certain project tasks early, gaining a time advantage.
   • Discounts and perks are offered on fees for task completion or transactions.
   • Exclusive NFTs can be acquired by burning L3 tokens.
2. These designs encourage users to burn a certain amount of tokens. In this setup, users gain benefits, and the platform’s tokens achieve deflationary goals.From the community’s standpoint: The community plays a larger role in ecological regulation compared to individual users. In a financial market, a token’s value relies not only on rarity but also on liquidity, which is essentially trading. How does the model balance liquidity and rarity? Maintaining token rarity is straightforward. Like the user-focused methods, community actions in the ecosystem also require burning L3 tokens. However, community activities include publishing tasks, deploying incentives, and accessing CUBE credentials. Moreover, when the community initiates proposals and votes for governance, corresponding L3 tokens must be burned.As for liquidity, it’s about buying and selling. While user actions are linked to burning, community actions are tied to both burning and buying. The model requires some community actions to involve purchasing and burning L3 tokens. Buying naturally creates a seller’s market. It’s important to note that, besides the community, only users, issuers, and investors hold large amounts of tokens. However, issuer and investor tokens are subject to unlocking time restrictions, meaning the currently circulating tokens are all held by users. This makes users the primary sellers, offering a new avenue for increasing user income.

Layer3’s dual burning mechanisms maintain the token’s deflationary model from the perspectives of circulation and retention. Token deflation positively affects its price. A high-value ecosystem naturally attracts users, and the burning mechanism counters the influx of tokens from linear unlocking, stabilizing the economic system. This stability supports the project’s long-term growth. Additionally, deflationary burning involves benefit transfers, representing concessions from the project team and community to users, providing significant returns on the platform and creating new economic value.

2. Token utility

The utility of a token reflects its value, its practical applications, and its ability to attract more participants, essentially the demand side of the token. One of the most important aspects of Layer3’s economic model is value accumulation, which is a key indicator of the effectiveness of the token model design because it directly impacts user earnings. The core principle of L3’s utility is to align the token’s value with network growth and user engagement. To achieve this, Layer3 has implemented an innovative staking model known as tiered staking. The main features of this design include:

1. Combining Staking Amount and Duration for Passive Income:
2. Active Participation to Enhance Reward Multipliers:

Regarding point1, users can participate in liquid staking within the L3 system, providing liquidity to the entire ecosystem. This allows them to earn passive income from their liquidity provision. The level of trust users have in the platform is also considered, creating a mutually beneficial relationship. Earnings are not solely based on the amount staked; the duration of the stake is also a crucial factor. Users who commit long-term will naturally earn more than short-term opportunists.

This aspect is particularly interesting in the economic model design. Traditional platforms typically determine earnings based on the amount staked, with some considering the duration. While this can secure long-term users, it doesn’t ensure high-quality users or comprehensive user behavior data. In L3’s model, the level of user activity in participating in platform activities also affects earnings. This means that a less active user with a large stake might earn less than a highly active user with a smaller stake. This approach encourages users to actively engage in platform activities to earn airdrops and reward multiplier benefit cards, innovatively improving user quality and engagement.

By implementing these strategies, Layer3 not only enhances the token’s utility but also fosters a vibrant and engaged community, aligning user interests with the platform’s growth and sustainability goals.

3. Token distribution

Token distribution is a key indicator of a project’s fairness and the project team’s confidence in its long-term success. When considering token distribution, it’s important to focus on who holds the tokens, the proportions they hold, and the timeline for token release.

Layer3’s token distribution plan is designed to balance the interests of the community, core contributors, investors, and advisors, ensuring fairness and supporting long-term growth. The use of lock-up periods and a gradual release mechanism helps to prevent market volatility and boosts confidence in the project’s long-term success. This distribution strategy effectively balances the interests of all stakeholders while promoting sustainable development.

For more details on the token distribution plan, refer to the document: “Distribution of Layer3 Foundation” (see Appendix).

It’s important to note that once the cliff is reached, vesting typically occurs daily rather than on a monthly or quarterly basis. A large release after a prolonged wait can create a prisoner’s dilemma, prompting token holders to sell quickly to secure the best price. Daily vesting mitigates this risk by allowing continuous trading, thereby preventing panic selling.

4.3 Comprehensive Review

Let’s revisit the overall process to understand the operation of the entire economic model. The L3 economic model is designed as a stable triangle, with three core aspects:

1. Market Creation for Token Circulation: Users, communities, and institutions form a trading market to facilitate the ecological circulation of tokens, thereby giving the tokens inherent value.
2. Risk Mitigation through Design: From a purely transactional perspective, the economic model doesn’t inherently resist market risks. These risks stem from the linear unlocking of tokens over time, leading to a surge in market supply that can destabilize token value. To counter this, the economic model incorporates tasks and rewards linked to a burning mechanism. By burning tokens through ecosystem activities, the model mitigates the impact of such influxes.
3. User Engagement and Incentives: The platform’s core lies in attracting and retaining high-quality users. Thus, a robust economic model must incentivize the entire user journey, from acquisition to retention. This is achieved through the formula: Earnings = Passive Income + Other Rewards * Multiplicative Coefficient.

Analyzing the entire model reveals that the L3 token economic model must include three essential elements: a sound staking mechanism, diverse application scenarios, and steadily increasing passive income.

It’s important to emphasize that while the token economic model is crucial, it cannot solely depend on the project itself. A token limited to this would be an ineffective “air token.” A successful token model must be self-sufficient within the ecosystem and adaptable to the dynamic risks posed by the rapid evolution of Web3 projects. The relationship between the project and the economic model is symbiotic and mutually reinforcing, not merely parasitic.

Summary

The Web3 task platform sector still has plenty of dynamics and innovations to explore. As cutting-edge tools for advancing project development, these platforms not only efficiently enhance the ecological prosperity of projects but also provide users with access to information. More importantly, they offer tangible benefits and a sense of engagement.

Achieving growth in Web3 is not an overnight process. Project teams can choose to grow alongside task platforms while attracting traffic. Monitoring the platform’s own growth data can help project teams make more informed decisions, laying a solid foundation for healthy user growth.

With the rise of fragmented growth and increased competition for user attention, the methods for attracting traffic by major projects are still quite limited, mainly relying on collaborative activities between projects. These activities typically offer rewards to attract users, some of which incur no cost, lacking incentives for sustainable growth. Moreover, the quality of the users attracted varies significantly, making it challenging to stratify users.

Only by building an appropriate bridge between the “key” and the “lock,” finding a unique fit for both sides, can unprecedented growth and value creation be unlocked.

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