The flow of value within the Layer 2 ecosystem tends to change with the movement of Airdrop expectations. With Starknet, Manta and other Layer 2 projects issuing coins one after another, the enthusiasm for interaction within the community has gradually shifted to other Layer 2 networks that have not yet issued coins.

Among the long potential options, Scroll has become one of the main Layer 2 positions to undertake traffic and capital transfers with a huge funding endorsement of k million dollars and the long "hand-picking" of Ethereum co-founder Vitalik**. Defillama data shows that Scroll's network-wide total lock-up position value (TVL) has maintained a fairly good net inflow over the past few months and has now risen to about $87 million.

At present, most long users who have just entered the Scroll ecosystem will face a dilemma: how to find the most cost-effective interactive target and win greater potential Airdrop returns with relatively little investment.

Looking at the current status of the Scroll ecosystem, the top long projects in TVL are either coin or have been deployed long the chain for a long time (long-chain deployment often means that the coin cycle is relatively long, and the weight of single-chain interaction will be relatively low), and there are relatively few projects that have not yet been coin and are native to Scroll. In this context, Pencils Protocol, which has just completed the rebranding, seems to have become the most "cost-effective" choice when interacting with the Scroll ecosystem. **

"Scroll is paper, Pencils is pen"

Pencils Protocol, formerly known as PenPad, has launched two rounds of early token generation on the Scroll network (currently Season 2 is underway) before the name change and has attracted a lot of attention from Scroll users. The reason for emphasizing Pencils Protocol's unique position in the Scroll ecosystem is the "ambiguous" relationship between Pencils Protocol and Scroll.

From an investment perspective, Pencils Protocol's latest ongoing funding round has secured long of the industry's leading investors, including OKX Ventures, Animoca Brands, Presto Labs, Gate.io, and more, with Scroll co-founder Sandy also participating. **

As early as March this year's joint event, Pencils Protocol mentioned that "completing tasks can get Scroll points and Pencils Protocol Tokens double rewards", which is also the first time that unofficial channels have leaked claims about "Scroll points", and then in April this year, Scroll officially announced the loyalty program Session Zero, confirming that it will launch a points system.

Positioned as a Scroll-born, community-centric integrated Decentralized Finance protocol, Pencils Protocol has now identified three main product lines – Launchpad, Stake, and Vaults & Restaking – with the completion of the rebranding. **

**Launchpad is an asset issuance service, which is the core product of Pencils Protocol when it was used as PenPad. **Looking forward to the future, Pencils Protocol hopes to provide a fair, open and efficient asset issuance platform for high-quality projects on top of Scroll, through a series of innovative subscription and auction product modules, to make the entire Launchpad subscription process more fair, easy to operate, composable and localized, to provide users and project parties with one-stop, flexible combination of innovative subscription services, as the first new product platform for the future of the Scroll ecosystem, Help the high-quality projects of the ecosystem to better complete the Token distribution.

**Staking and Vaults & Restaking are both yield optimization services. **Different from traditional PoS staking, Staking in the context of Pencils Protocol actually provides a long wick candle-to-coin revenue optimization service, users can simply and efficiently obtain income by depositing ETH (and its derived LST, LRT), stablecoin, WBTC (and other BTC credential Token), Scroll ecological high-quality Token, etc., and can use the Liquidity credential Token issuance by Pencils Protocol pToken releases the liquidity of deposited assets to further participate in other Decentralized Finance activities.

Vaults & Restaking focuses on the field of leveraged income, providing users with advanced functions to increase the leverage ratio by increase the position by borrowing funds, so as to achieve long times returns; In addition, Pencils Protocol's Vaults section will also cooperate with long Liquid Restaking protocol to provide more long earning opportunities for users who participate in Vaults, such as ETH's native stake earnings, LRT protocol earnings, EigenLayer earnings, and more.

In addition to the three core products mentioned above, Pencils Protocol will operate highly dependent on its loyalty points system, Pencil Points. After the official launch of Pencils Protocol protocol main features in the future, users can accumulate Pencil Points by depositing in the Staking product, **Pencil Points will not only have the opportunity to bring users continuous future Airdrop income (including but not limited to Pencils Protocol protocol Token), but can also be consumed in the Launchpad product to obtain more long credit, lower price, or more Vaults are consumed to increase leverage and earn at a faster rate. **

All in all, Pencils Protocol's vision is to serve as a Decentralized Finance cornerstone on top of Scroll, on the one hand, to help the early projects of the ecosystem complete the token distribution process, and on the other hand, to help the users of the ecosystem capture ecological value. As the community often says, "Scroll is paper, Pencils is pen", if you think of the underlying network Scroll, which can be literally translated as "scroll", as a blank sheet of paper, Pencils Protocol will be a pen that draws various graphs on this paper.

How to achieve one fish to eat longest?

For ordinary people, rather than understanding the business logic of Pencils Protocol on a frame-by-frame basis, "how to effectively interact and win potential benefits" may be a more worthy concern.

In February, Pencils Protocol (then known as PenPad) announced that it would syndicate a three-season Token Generation event at Scroll and distribute 18% of the total supply of Token rewards to early supporters. Previously, Season 1 started on February 27 and ended on March 22, while Season 2 started on March 25 and is still ongoing.

In the Season 2 event, users can deposit ETH individually or as a team on the official website page and accumulate corresponding point rewards. There is a minimum limit of 0.05 ETH for deposits, and users will receive 100 points immediately when they deposit 0.05 ETH for the first time, and 20 points for every 0.05 ETH deposited thereafter; Users with a deposit amount greater than 0.5 ETH can start their own "team" and receive 10% invitation points from the members they invite; With every 1 ETH rise of the total deposit of the "team", all team members will receive a chance to draw points, so as to accelerate their own point accumulation progress.

It is worth mentioning that the points here are not the same concept as the Pencil Points mentioned above, and the points will currently be mainly used for the generation and distribution of the Pencils Protocol protocol Token PDD - Pencils Protocol has clearly mentioned that it will distribute 6% of the Token to the community in the Season 2 event, and the long more points users accumulate, the more Token will be long, and the lower the subscription price. However, Pencils Protocol has mentioned in the latest announcement that it will convert this deposit contract to part of the Staking and Vaults services at the launch of Season 3, which will also allow users to convert their points in Season 1 and Season 2 to Pencil Points, thus continuing to participate in Pencils Protocol in Depth. **

As of this writing, Pencils Protocol's Season 2 Token generation activities have attracted a total of about 1,111 ETH in deposits, worth about $3.3 million, making it the largest native protocol of the Scroll ecosystem in Lock-up Position. However, overall, the competitive pressure of Pencils Protocol Token Generation activities is still relatively small, and new users still have a greater chance to catch up with the first movers.

From the perspective of potential earnings, in addition to the points that can be used to directly obtain Pencils Protocol protocol Token, depositing through Pencils Protocol's Season 2 Token generation event can unlock additional long earnings.

• The first potential benefit is the stake-based NFT badge reward offered by Pencils Protocol to all users. Pencils Protocol announced earlier that it will offer an S badge for Scroll and a P-badge for Pencils Protocol based on user points at the end of Season 2. Badge holders will be given priority access to Allowlist of new projects on Pencils Protocol in the future, specific fee discounts on other projects in the Scroll ecosystem, and inclusion in the first batch of Scroll Canvas badges (this is not officially described, so it's worth reverie......
• The second benefit is that PDD, as the most effective medium for accumulating Pencil Points in the future, has the attribute of "golden shovel" to leverage the follow-up income opportunities of the Scroll ecosystem. This also means that early participation in Season 2 deposits can help users get a head start in the subsequent Scroll ecological gold rush.
• The third benefit, which long most important to users, is the weight of interaction with Scroll. Long wick candle Airdrop competition for Layer 2 has become more and more fierce, high-quality participation around the ecological head project is often more valuable than slightly blind indiscriminate interaction, as the original leader in the Scroll ecosystem that is most tightly bound to the underlying matrix, the interaction behavior on the Pencils Protocol has the possibility of being paid special attention to by Scroll, which may bring unexpected surprises to users.

According to Pencils Protocol's latest disclosure, **Season 2 is expected to officially end on May 20, when Pencils Protocol will officially activate the withdrawal function of the previous deposit, and confirm the share of PDD rewards that users can receive through the final calculation - users can freely choose to use the deposited ETH to subscribe at a discount, or give up the subscription opportunity to keep ETH. **

After that, users can choose to migrate their ETH deposits directly to the new contract, continue to participate in Pencil Protocol's staking and vaults, and earn Pencil Points. There is also the option to withdraw ETH directly, which will not affect the PDD share, but will mean that the user will give up all the previous points.

Extreme value for money

Over the past year, Points-Fi gameplay, built around a points system, has become a new trend.

Restaking, Layer 2, DePIN, Decentralized Finance...... The emerging projects of the major tracks have all chosen to use the point system to accumulate liquidity before TGE, and the ETH, stablecoins and other assets in the hands of users have also become the bargaining chips that various project parties strive for. For ordinary holders, it is inevitable to fall into selective barriers in the face of the emerging temptation to "deposit" or "stake".

Compared with some other points projects on the market that are extremely competitive or have an unclear revenue redemption date, Pencils Protocol has the advantage of relatively short time cost and relatively fast revenue redemption; The second is that Pencils Protocol's Season 2 deposit activity has relatively little competitive pressure; The third is that by participating in Season 2, you can not only obtain PDD, but also leverage the future long benefits of the Scroll ecosystem in long ways. **

That's why we make a bold judgment that the current Pencils Protocol may be the most cost-effective interactive option for the Scroll ecosystem.