Fuel Network is the next L2 chain to extend the airdrop season. The network will distribute 10% of its supply in an event from December 19 onward.
Fuel network has already taken the snapshot for its airdrop, and is preparing to distribute 10% of its supply, the team announced Tuesday. The L2 chain has opened its eligibility portal, where users can claim tokens from December 19 to January 19, 2025.
The protocol will create a native FUEL token with a total supply of 10B, of which 1B will be set aside for the first airdrop event. Fuel Network has been active since July 2024, with airdrop mining activity long before the token generation announcement. The distribution will be just the first part of FUEL drops to the community. In total, 51% of the supply is set aside for the wider community and early contributors.
Initiating Genesis Drop:
1 billion FUEL (10% of total supply), 200,000+ unique addresses.https://t.co/InHl5f95Io pic.twitter.com/kWZhQEiPCL
— Fuel (@fuel_network) December 17, 2024
While most of the tokens will be for Fuel Network users from the months past, a part of the airdrop will be available for newcomers. The FUEL tokens can be earned by logging onto Legion, Impossible Finance, or Bitget. However, the airdrop will not be available for US residents or UK users, to avoid unfavorable regulations against the platform.
The airdrop arrives at a time when several large-scale projects released and distributed their tokens. Those included Magic Eden (ME), Hyperliquid (HYPE), and PENGU, the native token of Pudgy Penguins. Fuel Network is one of the relatively late L2 chains to open up a new airdrop. The chain has lagged behind the L2 trend but may be coming just in time for a renewed bull market.
Fuel Network prepares for steps to decentralized transactions
Fuel Network will offer another Optimistic Rollup L2, similar to Optimism (OP), one of the leading Ethereum-scaling chains. The new network will have the cheapest possible transactions, with a capacity of over 600 transactions per second. The FUEL token will launch as an Ethereum ERC-20 token, but will also be available on the L2 chain.
The chain will aim to simulate a Web2 experience with no noticeable fees. At this stage, even low-fee chains have increased their requirements, leading to a slow expansion of expenses for swaps, NFT activities, or other decentralized use cases.
Fuel Network will continue to accept ETH for fees, but will also use its native FUEL token.
The chain has to tackle one of the biggest problems of L2 chains, their centralized sequencer. This means that transactions are finalized by a centralized resource. Fuel Network will start by partially decentralizing proposers, while also planning to decentralize block-building.
After the FUEL token genesis, Fuel Network will start staking and include validators for transactions. Fuel Network is still considered Stage 0, working toward more decentralized features.
Fuel Network sets aside funds for the community
The new FUEL token will start out with a relatively small free float during the airdrop event. The big question is whether FUEL would turn into another VC-backed token with long-term pressure on the market price.
Fuel Network raised more than $88M over the course of several funding rounds. The bulk of the funds were raised from VC funds, including Bain Capital and Blockchain Capital. The rest were raised in a series of ICO and IDO events for the wider community.
As a result, purchasers will receive more than 32% of the token supply. Early ecosystem backers will receive more than 15% of the supply. The wider circle of allocations will be relatively limited in comparison, but the community will receive more tokens over time.
To mitigate the influence of the team and contributors, their tokens will remain locked for longer, while community tokens will be immediately unlocked. Additionally, locked tokens will not be available for staking, to avoid disproportionate rewards to the team.
The most significant unlocks and FUEL inflows will come from the fund for ecosystem growth. FUEL arrives at a time when L2 chains have already established dominance for the top 5 networks. At the same time, a longer list of niche chains still manages to host apps and grow their own DeFi liquidity.
Fuel Network already carries the Mira DEX, Swaylend lending protocol, the Griffy opinion and prediction market, as well as the Bako Safe multi-sig wallet.
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