Identifying the Layer 1 and Layer 2 ecosystems that best align with your interests and passion.

How should you prepare to secure a role within such organisations?

In this space we continuously observe the emergence of various Layer 1 (L1) and Layer 2 (L2) solutions, each designed to address distinct and at times novel use cases. During the previous bull market, Alt L1s, side chains, and L2 solutions garnered significant attention and have managed to construct thriving ecosystems. These chains have onboarded multitude of dApps and innovative solutions, capturing user interest and building solid communities. Numerous professionals within the traditional and Web3 spaces have colleagues or acquaintances affiliated with foundations or entities behind these L1 and L2 solutions. These connections might have been instrumental in igniting an interest to join such organisations and actively pursuing an ideal ecosystem where one can contribute meaningfully to its growth and adoption.

Typically, when a candidate lands a Business Development (BD) role within an organisation, which fosters the growth and adoption of a specific L1 or L2 solution, the responsibilities predominantly revolve around the growth and development of the ecosystem. As a BD professional, one needs to ensure the integration of correct foundational primitives and onboard various dApps and solutions into the ecosystem. However, the scope can differ since some BD roles may focus solely on enterprise solutions and corporate partnerships. It is imperative for a BD professional to ascertain how these solutions can coexist with and impact the existing offering within the ecosystem, while boosting the growth and adoption of the underlying chain.

This article is primarily designed for candidates with diverse seniority levels, from distinct industry verticals, seeking to land a BD role within the organisations behind the growth and adoption of L1s and L2s. It aims to provide an initial guidance and foundational knowledge upon which the candidates can further develop. It is essential to highlight that the rapid evolution of the Web3 domain might render certain suggestions in this piece obsolete over time. The BDs that are already active in L1/L2 ecosystems might find limited novel insights in this article; however, it might serve as a useful recap, and there’s a possibility that this article depicted certain aspects that might have been previously overlooked. Without further ado, let’s delve into the content and explore the insights it captures ☺

Review the official websites, docs, and community engagement:

You recently had lunch with your friend who told you about this amazing novel scalability solution poised to disrupt the rollup space, which sparked your personal interest. What should be your subsequent course of action? You would ideally endeavour to comprehend what is revolutionary about this solution, whether it resonates with your values, and if the community is one, you’d like to engage with. Start by analysing the official website to gather insights on the technical features of the chain, its ecosystem, strategic roadmap, and its unique value proposition. Additionally, on the official website, look for links to the documentation, whitepapers, or related Medium articles.

Review the whitepaper and supplementary documentation and try to understand the underlying architecture. To improve your comprehension of certain technical details, specifically the ones related to the architecture, try to visualise it on a piece of paper. Explore programming languages utilised for smart contract development and analyse the total addressable developer pool familiar with these languages. Peruse the consensus mechanism, governance structure and investigate differences compared to existing solutions. Equally important is assessing the vibrancy of the community and engaging with the community on platforms like X, Discord, and Telegram. Pose any technical or general questions to the community and evaluate the depth and supportiveness of their responses. As a potential candidate, you’d want to be wary of communities primarily incentivised by airdops.

Notable examples:

• Website (Polkadot): https://www.polkadot.network/
• Documentation (Solana): https://docs.solana.com/
• Medium Articles (Celestia): https://medium.com/tag/celestia
• Telegram (Telos): https://t.me/HelloTelos
• Discord (ZkSync): https://discord.com/invite/KfdZHKZ
• X (Scroll): https://twitter.com/Scroll_ZKP

Examine the developer tooling and infrastructure:

What types of developer tooling and infrastructural foundations does this specific chain offer? These are highly essential building blocks that enable builders to seamlessly deploy their dApps on the chain. At the level of developer tooling, scrutinise the available development frameworks, SDKs, libraries, and Integrated Development Environments (IDEs). When it comes to infrastructure, analyse wallets, price oracles, indexers, bridges, explorers, DAO tools, NFT tools, and Multisigs. Although a nascent chain might still be integrating or developing these foundational building blocks, it’s crucial to understand that a comprehensive toolset eases the developers’ tasks. For the chain’s growth and adoption, continuous expansion and refinement of its infrastructural building blocks is paramount. Identifying these potential gaps is imperative and they can be highlighted during the interview process.

Notable examples:

• Bridges: LayerZero, Axelar, Symbiosis, DeBridge, Celer, Wormhole
• Wallets: Metamask, Trust Wallet, Zerion
• Oracles: DIA, Redstone, Chainlink, SupraOracles, Pyth Network
• DAO Tools: Aragon, XDAO
• Multisig: Safe
• Indexers: The Graph, Covalent
• Explorers: Etherscan, Blockscout
• Development Platforms: Tenderly

Peruse the ecosystem pages:

Usually, all L1s and L2s maintain dedicated pages showcasing their ecosystems. Furthermore, chains that are in the process of going live provide insights into dApps ready for deployment upon their mainnet launch. It is essential to comprehend the chain’s ecosystem growth plans and its overarching objectives. Some L1s and L2s might prioritise enterprise collaborations, while others may laser their focus on verticals like NFTs and gaming. Assess how these areas align with your interests and passion.

Next, explore available dApps within the ecosystem and proceed with testing them out. The ecosystem might consist of native dApps as well as those deployed across various other chains. Play around with the native dApps and determine their uniqueness compared to their competitors on other chains. How do they contribute to the overall growth and adoption of the chain? What pivotal roles do they play?

• Are there distinct NFT marketplaces and collections present?
• Does the organisation envision onboarding notable games? Are they collaborating with established gaming studios?
• Is the DeFi ecosystem robust and fully composable? What additional dApps are required for its growth?

As an example, for BD professionals with a focus on DeFi, it is highly important to diligently assess the existing dApps and identify potential gaps in the DeFi ecosystem. What are the current building blocks and what solutions are still missing to attain full composability?

• Tier 1: DEXs, Money markets, launchpads, cross-chain solutions etc.,
• Tier 2: Leveraged trading, CDPs, yield, stablecoins, CLOBs, DEX aggregators etc.,
• Tier 3: Asset & liquidity management tools, insurance protocols, prediction markets, yield aggregators, structured products, options, synthetics, etc.,

Being in the dynamic realm of DeFi means that new trends emerge with each market cycle, requiring continuous monitoring. Additionally, it is imperative to discern distinctions between various types of DeFi solution. This includes, but not limited to detailed comprehension of various types of DEXs, understanding the concept of concentrated liquidity, distinguishing between Aave and Compound forks, recognising Curve’s unique features and the reasons behind the popularity of the ‘Curve wars’ in 2021 and so on.

Notable ecosystem pages to peruse:

• Polygon: https://polygon.technology/ecosystem
• Arbitrum: https://portal.arbitrum.io/
• Optimism: https://www.optimism.io/apps/all

Evaluate the additional support levels provided by distinct ecosystems:

Examine various programs that the ecosystem offers to developers and projects aspiring to deploy on that specific chain. Is there a grant program available? Does the organisation assist with marketing activities, and does it extend further forms of assistance, such as access to a venture capital network or participation in an accelerator program? Does the entity facilitate introductions to recommended service providers, including auditors and legal advisors, and potentially offset some associated expenses? Is there a structured educational program or regularly scheduled hackathons and bootcamps tailored for developers? Unless the chain possesses a significant user base and outpaces other chains in terms of adoption, projects and builders will require support to ensure user engagement and cement their position in their new home. Furthermore, it’s crucial for each chain to prioritise the onboarding of developers, as their activity and the solutions they build will be game changing in determining the chain’s success and overall standing.

Notable examples of various programs:

• Mantle Grants Program: https://www.mantle.xyz/grants
• Sui Education Grants: https://sui.io/education-grants
• Aptos Hackathons: https://aptosfoundation.org/events/singapore-hackathon-2023

Examine on-chain activity:

Several tools are available to continuously peruse and monitor on-chain activity. For instance, using platforms like Dune Analytics, users can design personalised dashboards and execute specific queries tailored for in-depth evaluation. When assessing the growth and adoption of a chain, it’s advisable to consider several of the following metrics:

• Daily Active Users (DAU)
• Monthly Active Users (MAU)
• Total Unique Addresses
• Daily Transactions
• Total Value Locked (TVL)
• Daily Transaction Volume
• Average Transaction Size
• On-chain developer activity

To gather this data, one can utilise some of the platforms and solutions mentioned below.

• Dune Analytics: https://dune.com/browse/dashboards
• DefiLlama: https://defillama.com/
• Explorers: Etherscan: https://etherscan.io/, Polygonscan: https://polygonscan.com/, Snowtrace: https://snowtrace.io/, OP Mainnet Explorer: https://optimistic.etherscan.io/
• Artemis Terminal: https://app.artemis.xyz/overview
• Nansen: https://www.nansen.ai/ (You can try the 7-day trial for $9)

Analyse the competitors and their adoption strategies:

The L1 and L2 domain is highly competitive with novel solutions continuously emerging. How does your chosen ecosystem measure against its competitors? The intent here isn’t to discourage you from pursuing your chosen ecosystem or opportunity, but rather to empower you to identify and address potential gaps. This approach will enable you to compile a list of necessary additions and integrations to build your dream ecosystem. In some cases, one might need to initiate the growth of the ecosystem from ground zero, while in others, one might opt to change the direction completely. Consequently, it is imperative to study the ecosystems that have attained evident growth, identifying both their strengths and challenges.

• How do they attract builders?
• What is their major focus in terms of growth and adoption?
• What types of programs do they offer? Were these programs successful in the past?
• Which dApps contributed the most to their overall growth?
• Why did some of the dApps cease to exist? What were the key drivers behind their failure?

Evaluate potential obstacles to the ecosystem growth:

Various factors can influence the growth rate of ecosystems relative to their competitors. These factors may include marketing strategies, the presence of a proactive ecosystem growth team, specific ecosystem growth programs and the languages used for smart contract development. Chains that are EVM-compatible often have a competitive advantage since a significant number of dApps are built on EVM-compatible solutions relying on programming languages like Solidity and Vyper. Such dApps typically prefer to deploy on solutions that do not require extensive modification of their smart contracts and can utilise familiar development tools like Remix, Truffle, and Hardhat. There are several strategies that can be employed by an L1 solution. For instance, the chain could consider enabling EVM compatibility in the future by integrating a solution atop its native layer. Alternatively, the organisation might allocate resources towards educational initiatives, bootcamps, and hackathons to enhance developer proficiency in its underlying technology, thereby fostering increased growth and adoption.

We truly hope that this article serves as a foundational guide for those preparing for interviews or aspiring to secure a position at a leading entity behind the growth and adoption of a specific L1 or L2. Building and nurturing an ecosystem can be compared to construction of a novel city and its planning, and occasionally, one may need to commence from the ground up. Laying solid foundations is imperative for the health and growth of the ecosystem. We all have distinct preferences; while some may gravitate towards already thriving ecosystems, others might be inclined to embrace the challenges of nascent or pivoting ecosystems, guiding them towards success. It’s paramount to comprehend whether you are aligned with the core values of the ecosystem and evaluate if it provides an opportunity for contribution in line with your passion. While at times a particular ecosystem may seem ideal, it’s crucial to ensure that your perspective aligns with the strategic vision of the management, ensuring your potential for significant impact. Don’t get easily discouraged and continue your path towards your dream ecosystem. Eventually, you’ll discover your ideal ecosystem you can call home, and when that moment arrives, Carpe Diem!

About the Author: My name is Nicky and I am one of the admins and core contributors to the BD Web3 DAO. Currently I am heading DeFi at Telos Foundation and I truly appreciate my job & my exceptional colleagues! :) If you have any queries, ideas, suggestions, and would like to reach out to me, please feel free to follow me on X or ping me on TG: @MaxiNicky / nickychalabi ❤