Key Takeaways
Ethereum Layer-2 network Scroll saw a sharp decline in its total value locked (TVL), dropping $170 million since its peak on Oct. 16, 2024. This drop followed a surge driven by airdrop farming ahead of the SCR token airdrop snapshot on Oct. 19.
While the airdrop briefly increased TVL, it highlights a common issue: short-term incentives can boost liquidity but fail to retain long-term user engagement.
Airdrop farming often dilutes rewards for loyal users, and similar patterns have been observed in other projects, such as Mode Network and ZKSync.
The price action of Scroll (SCR) mimicked this behavior. It first reached $1.40 on Oct. 15 and stayed there until today, Oct. 22, when a sharp drop to $1 followed.
The Scroll community has expressed growing dissatisfaction with the project’s token allocation strategy, as highlighted by a tweet from crypto investor Anon Vee.
According to the tweet, many users are frustrated by what they perceive as an unfair distribution of the SCR tokens.
Critics have specifically targeted the Scroll team for allocating 23% of the tokens to themselves and allegedly engaging in Sybil-like behavior by assigning over one million marks to team addresses, further diluting rewards for regular users.
This has raised concerns about the transparency and fairness of the airdrop process.
The price of SCR is still in the price discovery phase, so it is very early to provide a price prediction properly. However, by looking at the hourly chart, there is some evidence to suggest more immediate downside room.
Since entering the market, SCR has attempted to establish an uptrend, but after slowly coming to $1.80 on Oct. 11, it fell sharply to $1.10.
This was the first indication that the sellers were stronger than the buyers.
This was later validated by the fact that the price needed six days (until Oct. 16) to regain only 61% from the previous downfall, which came in an hour.
Its latest attempt resulted in a lower high today, after which SCR dropped another 28% to a low of $1.10, effectively reverting to its Oct. 11 level.
Although the hourly chart suggests that the price is getting oversold, a temporary bounce could be a corrective wave four before another lower low for a five-wave pattern to be concluded.
If true, SCR can see values below $1 on the next decline.