Boba Network, a scaling solution for Ethereum has jumped out of nowhere to hit $1B in total value locked, according to L2BEAT.
That makes it the No. 2 Layer 2 and puts it ahead of well-known competitors like Optimism and Loopring.
It’s not hard to discern what’s driving the interest — the DEX is offering an only-in-DeFi 1,391% APR on its OLO-ETH pool. The APR comes from rewards in the form of OLO, OolongSwap’s token, which it’s offering as part of a liquidity mining offering.
OolongSwap is offering other high APR rates on its pools without its OLO token as well. There’s a 71.04% APR offered on a USDC-ETH pair and 50.22% on a WBTC-ETH, as of Nov. 24. Those two pools alone account for $316M of value locked, over half of OolongSwap’s TVL and roughly 30% of Boba’s.
Of course these rates are annualized and may not remain stable as more people enter the pool, or should rewards end. They’re also dependent on OLO’s token price, which will fluctuate.
Still, OolongSwap’s rewards are partially responsible for pushing Boba into the Layer 2 conversation. Like any growth driven by liquidity mining however, the question is how long can it last.
When asked his thoughts about whether Boba is here to stay, Kris Kaczor, a Layer 2 (L2) researcher for MakerDAO, said the scaling solution’s team isn’t a random group of developers — they had actually worked together with the Optimism team on Plasma, a scaling solution which has since lost favor. Boba is actually a fork of Optimism, according to Kaczor.
Indeed, Boba is a rebrand of OMG Network which had implemented a plasma scaling solution, before forking Optimism’s code.
The rebrand underscores another key reason for Boba’s lightning fast growth — select holders of OMG received Boba’s BOBA tokens on a 1-to-1 basis on Nov. 19, making it one of the few L2s with a live token.
The token has been on fire, gaining 25.6% in the past 24 hours as of Nov. 24, according to CoinGecko.
Outside of a token, one feature unique to Boba is that they offer withdrawals from the network in under 10 minutes, according to a tweet from the project. Kaczor said Boba accomplishes this by using a similar technique to Maker Wormhole, which will also allow for near instant withdrawals from L2s to Ethereum’s L1 as well as between L2s.
In their basic form, Optimistic rollups typically require users to wait about seven days to allow parties to dispute whether the transactions carried out on the L2 are valid before they post permanently to their L1, in this case Ethereum’s mainnet.