Original title: "The second round of airdrop historical research: Where is the future of the Mao Party?"
Original author: DefiOasis, Geek Web3
Introduction: In fact, one of the greatest values of blockchain that we have discovered so far is to observe the generation and distribution of funds/wealth in a highly transparent way. Although this method is still in an immature and flawed early stage, its long-term vision of "transparent and minimally intermediary asset creation and distribution" can indeed bring huge positive value to society.
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Despite the bitter bear market in 2023, many project owners have distributed large-scale airdrop rewards to users. FreeMoney in the bear market has attracted many users. Taking Coingecko's data as an example, based on the ATH (all-time high) price of the airdropped token, in the past year alone, Arbitrum, Celestia, Blur and other project owners have distributed approximately $4.65 billion in airdrops to users.
Now, half a year has passed since Geekweb3 published the airdrop popular science article "A Brief History of Airdrops and Anti-Witch Strategies: On the Tradition and Future of Coin-Logging Culture" in September 2023. During this period, the Web3 industry has changed again, and the airdrop distribution mechanism has also shown new characteristics and trends. This article will analyze and popularize the airdrop mechanism that has changed during this period, and further show you the possible pattern and evolution of the airdrop strategy in the future.
The points system has become a reference indicator for airdrops of most projects
The popularity of the airdrop points system is basically inseparable from the promotion of Tie Shun, the founder of Blur. From Blur to Blast, the project's way of measuring user loyalty has changed from the initial transaction volume to the user's deposit amount and duration.
Nowadays, the point system is very popular among major public chain ecological projects, such as Magic Eden, Marginfi and Kamino on Solana, Bounce Bit and B²Network in the BTC ecosystem, and the rise of the concept of re-staking has pushed the popularity of the point system to its peak. With the points for mining Eigenlayer as the core, re-staking projects such as Swell, KelpDao, and Ether.Fi have launched a point nesting war. Currently, dual mining and even triple mining of LST and LRT points have appeared.
In fact, the current mainstream points system can be divided into two categories, namely points based on transaction volume and points based on deposits.
The points model based on transaction volume is common in NFT trading markets, derivatives exchanges, etc. These projects encourage users to increase their transaction volume, which is how the airdrop points system was played in the past. For users, transaction volume points can be completed with multiple rotations of a sum of money, which to some extent encourages a single user to have multiple addresses, and it is more troublesome to identify witch attacks;
The deposit points system is another mainstream points model. Projects that use this measurement method more often are lending platforms, public chain projects, and popular re-pledge concept projects. Points in this model are mainly determined by the amount of funds and retention time.
In order to maximize the attractiveness to funds/capital, such projects usually do not limit the type of funds they absorb to a single type, but actively absorb the influx of multiple types of assets. For example, the second phase of Merlin Chain allows users to pledge Bitcoin or part of Ethereum assets, as well as inscription assets such as BRC-20, Bitamp and BRC-420.
In today's Web3 world where TVL data is king, the deposit points system simply and crudely uses the expectation of airdrops to attract funds, but it will occupy users' funds for a long time, set a withdrawal restriction period of several months, and make users pay a huge opportunity cost. In today's era where Sybil players are everywhere and their true identities are difficult to distinguish, the deposit points system can greatly increase the cost of Sybil attacks, just like Proof of Stake has a miraculous effect.
The expected airdrop of the deposit points system has an immediate effect on the growth of TVL data, becoming a breakthrough for the current Ethereum Layer2. Since the ZK-based Layer2 was in a bear market when the mainnet was launched, the TVL performance of ZkSync and Starknet has been tepid, while Manta, ZKFair, etc. followed Blast and surpassed the aforementioned ZK king in TVL data in a short period of time, and still maintained good data performance for some time after the airdrop ended.
In addition, projects that adopt a deposit points system generally use some soft anti-Wycrime methods, such as binding users' wallet addresses to social accounts such as Discord and Twitter, but even so, it is still impossible to completely stop witch attacks.
In essence, the deposit points system only greatly increases the cost for the hunters to launch a witch attack. Some project owners are ingenious and use whether the user has made deposits and pledges for other projects as a reference for issuing airdrops: for example, when Altlayer distributes airdrops, it uses "whether the user is a pledger of Eigenlayer and Celestia" as a powerful restriction condition.
Altlayer adopted a tiered system for airdrops. The points distribution refers to the amount of TIA that users have staked on the Celestia mainnet, and a clear tier division is made. The amount of airdrops you can get is determined by the amount of deposits you have staked in Celestia and other networks in the past, not by how many accounts you have. However, the airdrop share of a single account is still limited. Only after the minimum deposit amount is met can you get rewards. The lower and upper limits of the rewards are clearly defined. This is essentially a POS with tiered incentives.
Although this type of airdrop distribution method resists airdrop hunters, large holders with large amounts of assets can still split their deposits into multiple parts (this is like people who run Ethereum Validators often divide their ETH into multiple parts, each with 32 ETH, to meet the minimum staking threshold of each Validator, and then this person can run multiple Validators)
In order to meet the expected conditions of the airdrop, the wool party with small funds often needs to integrate the funds of multiple addresses into a single account to receive the airdrop, that is, each address receiving the airdrop must have reached a deposit pledge threshold of XX amount in the past. However, for the project party, money is justice, and the "bourgeois" witch is valuable.
In fact, "everything can be calculated based on points". In addition to the two mainstream methods of calculating points mentioned above, there are also comprehensive points calculation schemes on the market, such as LineaDeFiVoyageXP, B²Network's B²Buzz and bsquaredOdyssey, and tasks released on Galxe. These schemes use user transaction volume and fund duration as the benchmark, plus multiple points consideration systems such as sign-in, social media interaction, and invitations to form teams, to more comprehensively capture the user's contribution to its ecosystem.
Points are essentially an airdrop promise, similar to an option. You pay a certain cost today and can get an expected return of XX in the future.
However, unlike DeFi mining with clearly marked APY, users under the guidance of the points system base all their behaviors on the reference of "unreleased token economic model of the project, unreleased airdrop allocation plan, unpredictable future market conditions" and other conditions, and conduct blind mining. Mining points is actually a game between users and project parties based on information asymmetry, which tests the investment research capabilities of users.
At the same time, the airdrop points are essentially infinitely inflated. For users with small funds, the participation of large users will dilute the airdrop shares. Of course, this is actually just like the pledge of Ethereum Validator. People who hold a large amount of pledged funds will get more dividends (this rule has actually remained unchanged for thousands of years).
Regardless of the trading volume or the duration of funds mentioned above, the point system based purely on funds will undoubtedly allow the bulk of the rewards to flow to big players; some projects will add blind boxes and random points draws in the form of lottery to redistribute them to small-capital users in order to seek a balance between big players and ordinary users.
However, the point system has been criticized for being increasingly similar to many existing gameplays on the Web2 platform. Obtaining points requires completing various complex tasks, which has led the community to ask whether users are experiencing the ecosystem or becoming slaves working for the project.
Airdrop targets are increasingly focused on core players, and "sunshine benefits" are given to multi-chain users
However, the wide-ranging airdrop with multiple standards and screening can cover as many users as possible, making different groups happy and winning the favor of the community. But as the internal competition of the LuMao studio intensifies, the project can only hope to screen at various levels to accurately distribute incentives to real users, causing the wide-ranging airdrop on the EVM chain to gradually die out.
However, non-EVM ecological projects like Sei, Celestia and Dymension have opened up a new idea of casting a wide net for airdrops, carrying out "sunshine and universal" airdrops to multi-chain base users, and the core distribution targets are high-quality players on the chain.
Generally speaking, the airdrop project parties have multiple considerations for these high-quality users. They will consider the TOP-level active users on the protocol platforms with sufficient funds who have cooperative relationships with themselves on multiple chains such as EVM and Solana, and consider the on-chain user activity in multiple dimensions such as user interaction amount, transaction frequency, and Gas consumption in certain time periods to find truly high-quality active players.
On the other hand, airdrops are often distributed to long-term staking users, especially large stakers, represented by ATOM, TIA and INJ stakers in the Cosmos ecosystem. Strictly speaking, staking airdrops are not a new way of playing. In the last cycle, ATOM stakers received airdrops of multiple high-quality targets in the Cosmos system. However, because the airdrop income of holders in the bear market cannot cover the losses caused by the price drop of ATOM, the advantages of this chain airdrop are often overlooked.
Thanks to the popularity of modular blockchain narratives, projects with the slogan of "staking for airdrops" have emerged one after another, and the popularity of the re-staking concept has made staking a popular narrative again. Under the narrative of staking and airdrops, different communities are spreading serious FOMO emotions, and people are basically looking for the next "golden shovel". For example, PythNetwork has obtained staking funds from more than 100,000 users without releasing actual APY and airdrop income. However, with the increase in staking addresses and staking amounts, the minimum threshold for airdrops is expected to increase step by step.
The popularity of staking has also led to the formation of a staking nesting system between project parties. When a project party A issues airdrops to token pledgers on the partner platform B, A also launches a staking function for its own tokens, making pledgers believe that by staking and locking up on the A platform, they can receive airdrops from other project parties such as C and D. This airdrop expectation (actually PUA) can effectively absorb the funds of the airdrop recipients on the A platform.
Under this chain condition, an infinite nesting of Stake A-B-C-D can be formed, and people are eventually trapped by the expectation of token staking. What people ultimately pay is the opportunity cost of funds, and what they get is the return of airdrops. Considering that the tokens obtained by airdrops are often different from assets purchased in the secondary market, the holding cost and psychological pressure are much lower than the latter, so under this model, people are more willing to lock their funds in platforms with staking airdrop expectations for a long time.
In addition to large holders of staking tokens, some project owners may give some airdrops to blue-chip NFT holders in the community, such as PudgyPenguins, BoredApeYachtClub, CryptoPunks, BadKids of Comomos, MadLads of Solana and other NFT brands on the Ethereum mainnet. These NFT holders are generally OG users of their community.
In summary, although everyone is happy about the sunshine airdrop, the core distribution targets of airdrops are now high-quality active users and large stakers. On another level, multi-chain "sunshine and inclusive" airdrops are generally used as a "barren marketing strategy" in non-EVM chain ecosystems or new ecosystems, with the main purpose of gaining word of mouth and capturing players from other ecosystems. The project side still aims to help the growth of ecological data and increase user on-chain activity and fund retention, and to deliver these airdrops to users who make contributions as much as possible.
Reference conditions for future airdrop rules
In addition to the above points, we have found some trends that may become reference conditions for airdrops in the future:
1. Official NFTs are bound to airdrop shares: Official NFTs are gradually becoming the new standard for project airdrops. Although these "equity-based" NFTs are not actually explicitly bound to airdrop shares, through frequent mentions or indirect endorsements by project parties on social media, they have unknowingly become the unspoken rules for project airdrops.
After Altlayer’s AltlayerOGBadge and OhOttie!NFT series holders received large shares of the airdrop, the community’s FOMO sentiment spread, and the official NFTs of some projects that did not carry out airdrops, such as EigenLayer, zkSync, and Berachain, were seen as important chips that must be seized next.
However, whether these NFTs are souvenirs or airdrop vouchers requires users to have strong predictive abilities and long-term observation of the attitude of the project party. At the same time, these "equity" NFTs have also become potential cash-out channels for project parties before issuing tokens due to PUA hype, and there are many cases of insider trading.
2. Project airdrops tend to focus on developers: Blast split its airdrop share in half to ordinary users and developers, Celestia allocated one-third of the total airdrop to GitHub developers, and Staknet almost openly gave a large number of developers airdrop share rewards. More and more star projects are beginning to focus on developers in airdrop distribution, which makes "contributing code to the project" or "pretending to be a serious developer" a new way to make money. A large number of low-quality projects are beginning to appear on the chain in the hope of obtaining ecological rewards. This phenomenon may become more and more serious in the future. Of course, it is estimated that new countermeasures will also appear (it is estimated that AI will be involved).
3. Cooperate with professional witch-hunting organizations to screen qualified users: Recently, Celestia and Manta have cooperated with TrsutaLabs to screen users who meet the standards. Linea provides anti-witch projects such as Nomis, GitcoinPassport, and Clique in the real-person verification (POH) link. It seems that the cooperation between projects and witch-hunting organizations for screening has become a new trend.
Professional institutions will integrate multi-chain data and the depth of the airdrop projects that users participate in to more comprehensively analyze the Sybil risk of addresses, but they have also been criticized for being overly strict or not smart enough to mistakenly kill real users. For example, there is still the problem that malicious transfers that have been injected into the Sybil library address "poison" innocent addresses cannot be identified.
The alternative "innovation and diffusion" of LuMao users
1. Spread from the EVM chain to other chains
With the transparency of information and the maturity of the EVM chain ecosystem, it is common to see more people and less meat in the EVM chain, especially in the overcrowded Ethereum Layer2. Ordinary users cannot compete in terms of amount or active volume, and the low input-output ratio has made the wool party look for opportunities in other directions again, focusing on chains with good TVL or capital background such as Sui, Aptos, and Solana.
The spillover effect of EVM chain users is reflected in the recent continuous increase in user activity and TVL data of public chains such as Sui and Solana. By looking for simple UNI-style interactions such as Jupiter in these ecosystems, you can get airdrop opportunities, which is even common in the BTC ecosystem.
(The wealth-creating effect has made many new users active again on the Solana chain)
2. From focusing on large financing projects to focusing on small and fine projects
Because projects with large amounts of financing have no shortage of cash flow, the airdrop distribution cycle is often very long, and the battle line of the wool party is also extended accordingly. It has become the norm that long-term investment has not seen returns. In addition, large amounts of financing mean that the project is robust. For users, if the certainty is strong, it will attract many people to rush in, thereby diluting the airdrop share.
In response, some of the PUA parties have changed their direction and focused their attention on small and fine projects. The financing amounts disclosed by these projects are often not large, but because there are fewer participating users, the cost-effectiveness of the wool is higher. Starknet, Layerzero and ZkSync, which are nicknamed "Three Idiots" because of their long-term PUA community members, have shown varying degrees of shock and downward trends in their active data.
Another strategy is to look for projects with a background in large exchanges. Since the value of airdropped tokens depends on the expectations of large exchanges, many of these activities revolve around projects related to large exchanges such as Binance, OKX, and Coinbase, such as projects invested by VCs under exchanges such as Binance Labs Fund and Coinbase Ventures, or projects within the public chain ecosystems of major exchanges. Another type of bargain hunting is around projects that are relatively unpopular and have been financed by top VCs such as Paradigm and a16z but with smaller amounts.
In addition, some relatively unpopular airdrop rules, such as continuous sign-in for NFP and Arkham registration, will also make people's average airdrop share reach a point of excitement, but once an unpopular rule with a wealth-making effect appears, it will become a rule that is fully recognized by the market. It may not be feasible to "copy homework" to form a continuous path dependence. This market and even the world are almost full of uncertainty. Past historical experience may not be applicable to the vast future. All so-called "rules" and "conventions" may be rewritten in the near future.
Perhaps the leading projects in each track are trying to invent new airdrop rules. These rules may have different innovations, but the essence remains the same: the recipients of rewards distributed by the project party are always loyal users with "early + deep participation + large capital contributions".
Debate: The game between airdrop farmers and project owners
Recently, Starknet has been criticized by the community for calling users who pay attention to airdrops "electronic beggars" on social media and opening an "electronic beggar" channel on the official Discord. A similar conflict between the project owner and airdrop players also occurred with Scroll. Later, Scroll and Starknet-related personnel personally confronted the community and even blocked users on social media, causing anger in the community. Although the relevant parties later apologized, they were unable to completely dispel the community's complaints. This public relations dispute has had a reverse marketing effect on the community and is worth analyzing as a case.
This public opinion incident exposed the delicate relationship between airdrop farmers and project owners. The long-standing tacit understanding of the airdrop rules between the wool party and the project owners seems to have caused misunderstandings between the two. Many users believe that airdrops are the "labor income" they deserve. In the bear market, users work hard and actively, contribute to the fees to provide income, and help the project create the illusion of prosperity on the chain, so they should be "rewarded". However, these users have a strong purpose, and the project owners may not fully buy in.
In the early days of airdrops (probably in 2021 and before) when there were not many freeloaders and most of the real users were real users, the project owners did not exclude the participation of low-net-worth users due to the good user retention rate. However, as mentioned above, due to the participation of a large number of freeloaders, this airdrop method that can make the project owners and users recognize each other is continuously decreasing.
In addition, airdrops should not be considered the end of a project. Some cases show that successful airdrop plans can stimulate user activity in a project. Jupiter has an annual airdrop plan. After the first round of airdrops, Jupiter's DAU once exceeded Uniswap; Arbitrum's STIP funding program and Optimism Op Grants have kept the activity data of both high for a long time.
(Arbitrum and Optimism are still active on the chain after the airdrop)
In order to lock in funds, some project owners will also find other ways to support ecological projects or developers first. For example, Base, which does not issue tokens, also attracts large users to deposit funds on the protocol through applications with money-making effects such as friend.tech and Bold, and cultivates user stickiness. However, even excellent applications such as Uniswap are facing the problem of stagnant TVL before issuing tokens. It can be said that airdrops are a big move when the ecosystem shows weak community contributions, weak growth, or even regression, but it should never be the last resort.
(In the long bear market, a large number of freeloaders interacted to contribute to ZkSync’s revenue)
Conclusion
Community members generally complain that the wool party supports the on-chain data and helps the project survive in the bear market. On the other hand, many project owners ignore the wool party, but through various hints, or cooperate with third parties to initiate tasks, PUA users participate in on-chain interactions, attracting a large number of wool users, but delaying the announcement of airdrop plans. This kind of inconsistency often stirs up negative emotions in the community.
Deposit airdrops, which attract funds more directly, are to rent the liquidity of funds in the hands of users and reward users with airdrops in the future. For users, they also need to consider the opportunity cost.
The airdrop standard has changed from interactive to deposit-based. In the future, the main standard will be the user's deposited funds, which may be the norm. This reflects the game between users and project owners and the change in demand. However, this game between project owners and users may be eased as the bull market approaches and the overall environment of the crypto market warms up. The prisoner's dilemma of airdrop distribution in bear market projects will be improved due to the gradual abundance of market funds. Recently, there have been complaints that "the re-staking agreement has more ETH than the user's hands." With the change in the pattern of fewer projects and more users, the attitude of project owners may also change from disliking the wool party to competing for the wool party.
The project's original intention was not to confront the community, but after thousands of studios joined the army of wool-pulling, they need to be more cautious about airdrop distribution. Nowadays, it is basically unrealistic to get rich through airdrops. This requires extremely strong investment research capabilities or good luck to be able to discover the future value of niche projects. For wool-pulling parties, the golden age of mass airdrops and picking up money everywhere has become history. Where will the future airdrop narrative go? Everything must take into account the classic "a person's success depends on his own efforts, but also on the course of history."
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