Reflections on 2024

There’s no shortage of unsolicited advice when starting a company. Focus on growth vs. prioritize unit economics, verticalize your stack vs. leverage existing infra, go multichain vs. specialize on one ecosystem, raise a large round vs. stay lean, launch a token vs. build equity value—the list goes on. Survey enough people, and the advice cancels to zero.

Yet one principle has consistently proven true in our journey: action produces information. Test, learn, iterate—then do it all again, quickly. This year was one of rapid iteration and expansion, producing strong results.

Results

Our transacting users grew from 575k to 1.6 million—a 178% year-over-year increase—while attributable transactions climbed from 12 million to 138 million. During the same period, revenue rose from $1.6 million to $16 million, marking a 10x increase, while maintaining profitability. Alongside this, we expanded our offering across both the EVM and Solana ecosystems, now supporting over 50 chains and 500+ apps. 

We strengthened our balance sheet by completing a $15M Series A co-led by ParaFi & Greenfield, and current cash-on-hand is greater than our total capital raised. We drove efficiency and maintained a lean team and cost structure, adding just three new FTEs for a total of 16 by year-end. 

Our users collectively earned hundreds of millions of dollars in direct and indirect token rewards, while our customers and partners enjoyed impressive outcomes by leveraging our distribution infrastructure.

These results were a direct byproduct of the rapid iteration by our product team, coupled with the execution capability of our growth team.

Product

The year kicked off with the release of Layer3 v2, our upgraded protocol built around an open-source ERC-721 credential called CUBEs (Credentials to Unify Blockchain Events). CUBES serve as an identity primitive that enables bespoke user incentives while giving users full ownership of their interactive data. They also let third-party analysts tap into Layer3’s ecosystem for incentive targeting or data analysis. Since launching in February, more than 41 million CUBES have been minted, now held by over 2 million unique wallets.

Building on this success, we introduced a new interface and brand to reflect our broader vision and ambition. Until recently, the largest drivers of value on the internet revolved around monetizing attention (e.g., Google, Facebook), where businesses retain their lead by controlling user identity, content interfaces, and monetary incentives. Our model flips that paradigm for digital-native businesses: ecosystems issue value—directly or indirectly—to users via Layer3 infrastructure, and users own their data through CUBES, creating a powerful flywheel.

We also introduced several new reward mechanisms designed to make Layer3 more immersive for users while driving better results for our customers. Races enabled real-time, large-scale incentive coordination in a fun, multiplayer format. Loot Boxes introduced variable rewards that boosted daily retention. Daily Offers allowed users to earn personalized airdrops for their everyday activity. We also launched Weekly Leaderboards and Minidrops, adding new ways to engage and reward our community.

Recognizing our global user base, we localized the platform into more than 10 languages and launched a regional ambassador program. Beyond English, Chinese and Turkish are the two most frequently selected languages on Layer3.

In the fourth quarter, we released a feature that had long been in R&D: the Layer3 Launchpad, which bridges the gap between emerging protocols and engaged consumers, creating a new standard for token distribution and ecosystem growth. Previously, pre-token projects relied on crude tools to bootstrap momentum; now, the Layer3 Launchpad offers robust infrastructure that helps them find and cultivate their communities effectively. We also expanded our offering from EVM to Solana with a new platform, token migration, and native leaderboard and reward system. 

Building on our existing reach and distribution, we expanded our native product suite with the introduction of Layer3 Predictions. This feature offers fast-resolving events with dynamic rewards that favor early participants—allowing users to express their views on future outcomes and earn rewards. As of this writing, 141,000 total predictions have been made using 1,500 SOL.

To round out our product roadmap for the year, we introduced Guilds, a multiplayer experience where users team up with friends to build communities, earn rewards, and compete onchain. Beyond driving retention and new user acquisition, it also serves as a powerful tool for ecosystems to promote app or chain-specific Guilds as a community growth mechanism. Over 770 Guilds have been created, 250 of which have 10 or more members. 

Looking back on the year, not every feature we released gained traction or proved sustainable. But if we never took such risks, it would be cause for concern— action produces information only when you’re willing to test ideas that might fail. Rapid iteration remains our clearest path to success, and we plan to keep making bold bets—even when they occasionally fall short.

2024 marked significant strides  in process and efficiency. Despite accomplishing an order of magnitude more, we added only two new engineers. This was largely thanks to AI-driven efficiency improvements (which we review each quarter) and the benefits of having worked together for several years. As the adage goes it never gets easier, you just go faster.

Impact

Layer3 is occasionally mischaracterized as just another 'quest platform,' which overlooks the depth of our business and the scale of our impact. In reality, we've built something far more substantial.

The best products often start by solving a specific problem well, then expand to reshape their entire category. We set out to solve the challenge of connecting protocols with users in a way that creates lasting value for both. The sections below illustrate how we're driving meaningful impact across the onchain economy.

We were proud to partner with dozens of incredible teams this year, including Optimism, Arbitrum, Uniswap, Robinhood, Base, Linea, Zora, Gnosis, bnSOL, Phantom, Jito, and hundreds more.

Driving Ecosystem Growth

• Linea: We kicked off 2024 by boosting adoption in Linea’s gaming ecosystem. We created a theme-park-style UI that drew over 1 million users, completing 13 million onchain transactions across 40 games—representing 60% of all sequencer revenue on Linea during the campaign.

• Base: We continued our role as Base’s official quest provider, supporting Onchain Daily and Onchain Summer campaigns. To date, we’ve facilitated 10.9 million transactions from 500,000 users, helping dozens of app builders reach new audiences.

Comparable results have been achieved across other L2s, with 11 millions transactions from 817k users on Arbitrum and 9 million transactions by 1.1 million users on Polygon. Across the Superchain as a whole, we’ve routed 18 millions transactions from 700k users—making Layer3 one of the largest independent drivers of onchain activity in major L2s.

Grants & Incentives

• Optimism: Awarded 500,000 OP ($900,000) as part of its Retroactive Public Goods funding, which we reinvested into platform incentives. We were also awarded 75,000 OP ($135,000) to drive Superchain adoption on Farcaster and 35,000 OP (~$63,000) to promote adoption across the Superchain, both as part of Optimism’s Mission Request program.

• Arbitrum: Awarded 400,000 ARB (~$300,000) under the LTIP program, enabling us to facilitate 1.9 million transactions across 60,000 users and 100+ Arbitrum apps.

• User Rewards: Layer3 users collectively earned 30% of ZK distribution 1 ($146M), 20% of ARB distribution 1 ($125M), and 83% of OP distribution 5 ($14M). They also received $28 million directly from our distribution infrastructure. 

Launchpad & Other Milestones

• Caldera: Onboarded to the Layer3 Launchpad, powering 750,000 transactions from 132,000 users.

• Zerion: Integrated with the Layer3 Launchpad, resulting in 700,000 transactions from 32,000 users.

• Mantle: Drove 1.4 million transactions from 165,000 unique users across two dedicated GTM campaigns.

• Solana: In less than 3 months, drove over 1 million transactions across 50k users and over 30 apps including Jito, Jupiter, Meteora, Magic Eden, and others. 

These examples represent only a fraction of what we accomplished for users and customers this year, yet they illustrate the breadth and impact of our reach. 

Token

Alongside the Layer3 Foundation, we launched the Layer3 Token ($L3) as the driving force behind our network’s flywheel. As more ecosystems integrate with Layer3, user demand for $L3 grows, which in turn encourages even broader adoption—amplifying network value.

At the heart of $L3 is an innovative staking model called Layered Staking. Users who stake and actively participate on Layer3 earn the highest rewards. These staking and activity levels serve as indicators of alignment with our ecosystem, unlocking additional rewards, perks, governance rights, and exclusive opportunities.

Beyond staking, $L3 is also used to pay our native credential fee on Solana, Base, Optimism, Arbitrum, and Polygon, with more network integrations coming soon. Over time, $L3 will become the default currency for additional parts of our platform. Customers will eventually be able to deploy activations permissionlessly by buying and staking $L3. The plan is straightforward: build a true coordination token where every action involves $L3, ensuring that as adoption grows, so does utility.

In the fourth quarter, we welcomed a new cohort of liquid funds—1kx, Theia, Greenfield, Archimed, and Triton—who purchased $L3 and will be active supporters of the ecosystem.

Future

On balance, 2024 was a strong year. We delivered great results, strengthened our culture and internal processes, and welcomed three new team members. We've built a powerful economic model with significant network effects. As more protocols use Layer3 to acquire users, more tokens are distributed on the platform, attracting more users, which in turn encourages even greater protocol adoption. A secondary flywheel reinforces our technical advantage, as the adoption of CUBEs enables better targeting, leading to superior results for protocols and further growth. While still in the early stages, we believe our business has the potential to exhibit many of the same characteristics as the most dominant aggregators of the early 2000s.

Looking ahead, we are focused on three major product initiatives: (1) expanding our AI capabilities through Layer3 Intel and other efforts, (2) developing novel trading experiences, and (3) optimizing our distribution infrastructure to drive even greater impact. We’re excited to share more details in early 2025.