Layer 2: Don't Get Hyped by Just TVL! ⛔️📍😤
The crypto space is booming with new Layer 2 projects popping up all the time ($MANTA , #METIS , $ZK , and more on the way!). This is great news for us because more choices mean a more diverse portfolio! But with so much out there, picking the wrong project can hurt.
Here's how to stay sharp: 💻👇
🌕 DYOR: Always research before investing. Don't get swept up in the hype!
🌕 Stay Informed: Regularly check on your investments. Don't just set it and forget it.
🌕 Look Beyond Price: When checking L2 projects, there's more to see than just price movement. Platforms like L2beat and Growthepie make it easy to track important info like daily active users, on-chain profit, and transaction counts.
But wait, there's more! 🤨👉 Here's why TVL alone isn't enough: Remember $STRK ? Its TVL is high at $760 million, sounds impressive, right? 🤮
Well, here's the twist: most of that TVL (over 60%) is actually its own token (STRK)! A healthy project has a wider variety of assets locked in, not just its own. 🤡
What does this mean? 🤔
🛑 Low Stablecoin Use: Low stablecoin circulation suggests the project might not have many real-world applications yet. Stablecoins are like cash in the crypto world, so low use could be a red flag.
🛑 Potential Manipulation: With low stablecoin volume, a new project could potentially manipulate the network (not good!).
Don't just blindly follow TVL. Dig deeper, stay informed, and you'll be a crypto investor ninja!🥷 🤝 #STRK #OP #ARB