Turning Fake Money into Real Cash? Ethereum Testnet Tokens Can Cross-Chain to Mainnet! Is It Profitable? Why Is the Community Opposed?
For Ethereum developers, obtaining enough testnet tokens has always been a tricky issue. To make it easier to access test tokens, the cross-chain protocol team LayerZero Labs has developed a "Testnet Cross-chain Bridge," allowing users to cross-chain mainnet ETH to the testnet, while also bringing value to test tokens. However, is this really a good idea? And is it profitable?
Public Goods by LayerZero
We're excited to introduce the Testnet Bridge as the first of several tools we launch for the Ethereum developer community.
Cliffs: Get Goerli-ETH quickly, easily, and begin testing ASAP without camping faucets or feeling stranded pic.twitter.com/CTxZFxwgvF
— LayerZero Labs (@LayerZero_Labs) February 21, 2023
Table of Contents
Insufficient Test Tokens Issue on Ethereum
For those looking to operate on the Ethereum Goerli testnet, obtaining test tokens is the first step.
For simple transactions, users can easily acquire enough tokens through the testnet faucet. However, for teams requiring a large amount of test tokens to meet development needs, the tokens provided by the testnet within a limited time are often insufficient.
In addition to regularly obtaining tokens through the faucet, it may also be necessary to purchase an adequate amount of tokens on the secondary market.
To address this issue, the cross-chain protocol development team, LayerZero Labs, has developed a "testnet cross-chain bridge," allowing users to cross-chain their ETH from the Ethereum mainnet to the Goerli testnet.
Introduction to Testnet Cross-Chain Bridge
By establishing liquidity pools on the Ethereum mainnet and Goerli testnet using Uniswap, LayerZero Labs has created a real-time pricing market between ETH and Goerli ETH.
In other words, users can now exchange ETH on the Ethereum mainnet for a certain price with Goerli ETH on the testnet, and vice versa.
The liquidity pools established by LayerZero Labs include:
- Goerli testnet: ETH/mETH Mainnet ETH
- Ethereum mainnet: ETH/gETH Goerli ETH
The initial price of Goerli ETH is $0.1, with an initial circulating supply of 12,500 tokens. Users are encouraged to add liquidity to the pool to achieve market equilibrium.
The steps to cross-chain mainnet ETH to the testnet are as follows:
- Exchange ETH for gETH on the mainnet
- Cross-chain gETH to the Goerli testnet
- Unpack gETH into ETH on the Goerli testnet
These three steps can be completed in a single transaction using the testnet cross-chain bridge developed by LayerZero Labs, meeting the needs of developers requiring test tokens urgently.
Before the deadline, 1 mainnet ETH can be exchanged for approximately 19,330 gETH, with a gETH price of about $0.085.
Is the Testnet Cross-Chain Bridge Profitable?
After the introduction of this feature by LayerZero Labs, it can be said that it has set a market price for what was originally meant to be free test tokens. However, is accumulating test tokens profitable?
In conclusion, the profit margin is not significant.
Unless developers have accumulated a considerable amount of test tokens early on, according to the sources compiled by Faucet Link, users can only obtain approximately 0.1-1 token per day.
Calculating based on 1 token per day, users can exchange approximately 0.00005 mainnet ETH per day, equivalent to $0.08, without considering gas fees. Therefore, this practice is not practical and goes against the original intention of LayerZero Labs in developing this feature.
Criticism in the Community, Polygon CISO: I Will Dump Goerli ETH
While this feature has benefitted developers to some extent, providing them with efficiency and convenience, many community users believe that the testnet, as a "public good," should be completely free. Although the profits are meager, individuals with ulterior motives can cause trouble in the testnet ecosystem through bots if it becomes profitable.
Furthermore, Mudit Gupta, the CISO of Polygon, mentioned on Twitter that the testnet faucet provided by the blockchain fund DeltaBCFund incurred a $0.1 SMS cost when users received test tokens for free. Pricing test tokens may lead to fraud and harm the test token provider.
In response, Mudit Gupta stated that he would dump a large amount of gETH on the open market to make it cheaper, while also warning the community:
"If you have bought any Goerli eth, you better sell it while it still has 'some value'."
Testnet tokens should be free. An actual public good looks like https://t.co/wYIoJPD6oH where @Deltabc_fund is paying about 10 cents for SMS verification per user to give them Goerli eth for free.
Monetizing Goerli ether hurts all faucet providers because spam increases. https://t.co/mzD09ROu6Y
— Mudit Gupta (@Mudit__Gupta) February 22, 2023
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