Airdrop Historiography Research Part Two: Where is the Future of Airdrop Hunters

Author: @defioasis

The success of airdrop hunting not only depends on one's own efforts, but also needs to consider the historical process. In the current environment where the airdrop strategy of project parties is constantly changing, airdrop hunters also need to keep up with the times.

Text: Despite the bone-chilling bear market in 2023, many project parties still distributed large-scale airdrop rewards to users. The FreeMoney in the bear market has attracted users' attention. Taking Coingecko's data as an example, based on the ATH (all-time high) price of airdropped tokens, in just the past year, project parties such as Arbitrum, Celestia, and Blur have distributed approximately $4.65 billion in airdrops to users.

Now, half a year has passed since the publication of the airdrop popular science article "A Brief History of Airdrops and Anti-Witch Strategies: On the Tradition and Future of Airdrop Culture" by Geek Web3 in September 2023. During this time, the Web3 industry has once again undergone changes, and new characteristics and trends have emerged in airdrop distribution mechanisms.

This article will analyze and popularize the changes in airdrop mechanisms that have occurred during this period, further demonstrating the possible patterns and evolution of airdrop strategies in the future.

Point system becomes the reference index for airdrops for most projects

The popularity of the airdrop point system is largely due to the promotion by Blur's founder, Tieshun. From Blur to Blast, the way project parties measure user loyalty has evolved from initial trading volume to the amount and duration of user deposits.

Today, the point system is favored by major public chain ecosystem projects, such as Magic Eden, Marginfi, and Kamino on Solana, Bounce Bit and B²Network in the BTC ecosystem. The rise of the concept of re-staking has pushed the popularity of the point system to its peak. With the mining of Eigenlayer points as the core, projects such as Swell, KelpDao, and https://t.co/ffAz9Gz9oS have launched a fierce battle of point stacking, with the emergence of dual or even triple mining of LST and LRT points.

In fact, the current mainstream point system can be subdivided into two categories: points primarily based on trading volume and points primarily based on deposits.

The trading volume-based point model is common in NFT trading markets, derivative exchanges, and other projects that encourage users to increase trading volume. This was the playing method of airdrop point systems in the past. For users, trading volume points can be achieved through multiple transactions with a single fund, to some extent encouraging single users to have multiple addresses, making it more difficult to identify witch attacks.

On the other hand, the deposit-based point system is another mainstream model. This measurement method is more commonly used in lending platforms, public chain projects, and the popular re-staking concept. In this model, points are mainly determined by the amount of funds and the duration of retention.

To maximize the attractiveness to funds/capital, such projects usually do not limit the types of funds they accept to a single type, but actively attract the influx of multiple types of assets. For example, in the second phase of Merlin Chain, users were allowed to stake Bitcoin or a portion 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-based point system aggressively attracts funds through airdrop expectations, but it also ties up users' funds for a long time, setting a withdrawal restriction period of several months, imposing a significant opportunity cost on users. In this era where witch players are everywhere and real identities are difficult to distinguish, the deposit-based point system can significantly increase the cost of witch attacks, just like Proof of Stake has a remarkable effect.

The airdrop expectations of the deposit-based point system almost immediately lead to the growth of TVL data, becoming the breakthrough for the current Ethereum Layer2. As ZK-based Layer2 networks such as ZkSync and Starknet were launched during the bear market, their TVL performance has been lukewarm. Meanwhile, Manta and ZKFair, following the example of Blast, quickly surpassed the aforementioned ZK giants in TVL data in a short period of time, and maintained good data performance even after the airdrop ended.

In addition, projects using the deposit-based point system generally employ some soft anti-witch methods, such as requiring users to link their wallet addresses to social accounts such as Discord and Twitter. However, even so, it is still not possible to completely prevent witch attacks.

Fundamentally, the deposit-based point system significantly increases the cost of witch attacks for airdrop hunters. Some project parties have come up with innovative approaches, using whether the user has made deposits for other projects as a reference data for airdrop distribution. For example, when Altlayer distributed airdrops, being a depositor for Eigenlayer and Celestia was a powerful restriction condition.

Altlayer used a tiered distribution system for airdrops, with the distribution of points based on the amount of TIA deposited by users on the Celestia mainnet, clearly dividing users into different levels. The amount of airdrop rewards a user can receive is determined by the amount of deposits they have made in networks such as Celestia, rather than the number of accounts they have. However, the airdrop share for a single account is still limited. After meeting the minimum deposit amount, users can receive rewards, with clear rules for the lower and upper limits of rewards. This essentially is a form of POS that incentivizes in tiers.

Although this distribution method resists airdrop hunters, large holders with a significant amount of assets can still split their deposits into multiple parts (similar to how people running Ethereum Validators often split their ETH into multiple parts, each part meeting the minimum staking threshold for a Validator, allowing the person to run multiple Validators).

For small airdrop hunters to meet the expected conditions of airdrops—each receiving address must have reached a certain deposit threshold in the past—they often have to consolidate funds from multiple addresses into a single receiving account. However, for project parties, having money means being righteous, and the "bourgeoisie" witches are valuable.

In fact, "everything can be point-based." In addition to the two mainstream point calculation methods mentioned above, there are now comprehensive point calculation schemes such as LineaDeFiVoyageXP, B²Buzz and bsquaredOdyssey from B²Network, and tasks released on Galxe, which are based on user trading volume, fund retention time, as well as sign-ins, social media interactions, inviting referrals, and team formation, capturing the user's contribution to their ecosystem more comprehensively.

Points, essentially, are a commitment to airdrops, similar to an option. You pay a certain cost today and can expect a return in the future.

However, unlike DeFi mining with clearly stated APY, users guided by the point system base all their actions on "unreleased token economic models, undisclosed airdrop distribution plans, and unpredictable market conditions," engaging in blind mining. In reality, mining points is a game of asymmetric information between users and project parties, testing the user's research capabilities.

At the same time, the point system is essentially unlimited inflation. For small fund users, the participation of large holders dilutes their airdrop shares. Of course, this is similar to the staking of Ethereum Validators, where people with a large amount of staked funds will receive more dividends (this rule has actually remained unchanged for thousands of years).

Whether based on trading volume or fund retention time, point systems that purely measure in terms of funds undoubtedly direct the majority of rewards to large holders. Some projects add lottery-like blind boxes and random point draws to redistribute to small fund users, seeking a balance between large holders and regular users.

However, the criticism of the point system is that, like many existing play methods on Web2 platforms, obtaining points requires various complex tasks, prompting the community to question whether users are experiencing the ecosystem or becoming the project's working slaves.

Airdrop targets increasingly focus on core players, "sunshine inclusiveness" for multi-chain users

Nevertheless, a wide-net airdrop with multiple standards and screenings can cover as many users as possible, pleasing different groups and winning the community's favor for project parties. However, as the internal competition of airdrop studios intensifies, project parties can only hope for precise incentives through layered screening, gradually leading to the demise of wide-net airdrops on the EVM chain.

However, non-EVM ecosystem projects such as Sei, Celestia, and Dymension have opened up new ideas for wide-net airdrops, conducting "sunshine inclusiveness" airdrops for multi-chain user bases, with the core distribution targets being high-quality players on the chain.

Generally speaking, project parties have multiple considerations for these high-quality users when it comes to airdrops. They consider users who are active on multiple chains such as EVM and Solana, and are affluent in protocol platforms, and assess the user activity on the chain from multiple dimensions such as user interaction amounts, trading frequency, gas consumption, etc., during specific time periods, in order to find truly high-quality and active players on the chain.

On the other hand, airdrops are often distributed to long-term staking users, especially large stakers, representing the ATOM, TIA, and INJ ecosystems in the Cosmos ecosystem. Strictly speaking, staking airdrops are not a new play method. In the previous cycle, ATOM stakers received airdrops of multiple high-quality assets in the Cosmos ecosystem. However, due to the bear market, the advantages of these chain airdrops are often overlooked as the airdrop returns for holders cannot cover the losses caused by the decline in ATOM prices.

Thanks to the popularity of modular blockchain narratives, projects with the slogan "staking gets airdrops" have emerged one after another, coupled with the popularity of the re-staking concept, making staking popular once again. Under the staking airdrop narrative, there is a serious FOMO sentiment spreading across different communities, with people looking for the next "golden opportunity." For example, despite the lack of actual APY and airdrop income releases, PythNetwork has attracted over 100,000 users' staking funds. However, as staking addresses and amounts increase, the minimum threshold for airdrops is expected to gradually rise.

The popularity of staking has led to a nesting system of staking among project parties. When project A distributes airdrops to token stakers on platform B, a collaboration is formed where A also introduces staking for its own token on the platform, leading stakers to believe that staking and locking on A's platform can once again receive airdrops from other project parties such as C and D. This airdrop expectation (actually PUA) effectively absorbs the funds of airdrop recipients on platform A.

Under these chain conditions, an infinite nesting of A—B—C—D staking can be formed, ultimately trapping people in staking expectations, with the opportunity cost of funds being paid, and airdrop returns being received. Considering that the tokens received from airdrops are often different from assets bought on the secondary market, the holding cost and psychological pressure are much lower than the latter. Therefore, people are more willing to lock funds on platforms with staking airdrop expectations for the long term.

In addition to large stakers, some project parties may also airdrop to blue-chip NFT holders within the community, such as PudgyPenguins, BoredApeYachtClub, CryptoPunks on the Ethereum mainnet, BadKids on Cosmos, MadLads on Solana, and other NFT brands. These NFT holders are generally OG users within their communities.

In summary, although airdrops are inclusive for everyone, the core distribution targets are now high-quality active users and large stakers. On another level, the multi-chain "sunshine inclusiveness" airdrops are generally used as a "poor marketing strategy" within non-EVM chain ecosystems or new ecosystems, with the main purpose of gaining reputation and capturing players from other ecosystems. Project parties still aim to help grow ecosystem data and increase user chain activity and fund retention, distributing these airdrops to users who contribute as much as possible.

Future airdrop rule reference conditions

In addition to the above points, we have identified some trends that may become reference conditions for airdrops in the future:

1. Airdrop share binding with official background NFTs: Official background NFTs are gradually becoming a new standard for project airdrops. Although these "equity" NFTs do not actually have a clear binding of airdrop shares, through frequent mentions or indirect endorsements by project parties on social media, they have become an unspoken rule for project airdrops today.

After AltlayerOGBadge and OhOttie!NFT holders received large airdrop shares, under the community's FOMO sentiment, the official NFTs of projects such as EigenLayer, zkSync, and Berachain, which have not yet conducted airdrops, are seen as important chips to be seized next.

However, whether these NFTs are collectibles or used as airdrop vouchers requires users to have strong predictive abilities and a long-term assessment of their attitudes towards project parties. At the same time, these "equity" NFTs have become potential channels for project parties to cash in before issuing tokens, and there are quite a few instances of insider trading behavior.

2. Project parties tend to value developers in airdrop distribution: Blast split the airdrop shares in half between regular users and developers, Celestia allocated one-third of the total airdrop to GitHub developers, and Staknet almost openly rewarded a large number of developers with airdrop shares. More and more star projects are beginning to tilt airdrop distribution towards developers, making "contributing code to the project" or "pretending to be a legitimate developer" a new airdrop hunting method. There is a growing number of low-quality projects on the chain, hoping to receive ecosystem rewards, and this phenomenon may intensify in the future. However, new countermeasures are expected to emerge (likely involving AI).

3. Collaboration with professional witch hunting agencies to screen qualified users: Recently, Celestia and Manta have collaborated with TrsutaLabs to screen users who meet the standards, and Linea provides options such as Nomis, GitcoinPassport, and Clique for real-person verification (POH) to combat witch hunting. The collaboration between projects and witch hunting agencies seems to be a new trend.

Professional agencies integrate multi-chain data and the depth of user participation in airdrop projects to comprehensively analyze the witch risk of addresses. However, they have also been criticized for being overly strict or not intelligent enough, resulting in the wrongful identification of real users. For example, there are still issues with malicious transfers "poisoning" innocent addresses that are mistakenly classified as witch addresses and cannot be identified.

Unconventional "innovation and diffusion" of airdrop users

1. Expansion from EVM chains to other chains

With the transparency of information and the maturity of the EVM chain ecosystem, airdrop shares, especially on the overcrowded Ethereum Layer2, are becoming increasingly common. Regular users are unable to compete in terms of amounts and activity, and the low input-output ratio has led airdrop hunters to seek opportunities in other directions, focusing on chains with good TVL or capital backgrounds such as Sui, Aptos, Solana, etc.

The overflow effect of EVM chain users is evident in the recent rise in user activity and TVL data on public chains such as Sui and Solana. In these ecosystems, users can find opportunities for airdrops by interacting with simple protocols like Jupiter, similar to UNI-style interactions, and this is also common in the BTC ecosystem.

2. Shifting focus from large fundraising projects to small and refined ones

Projects with large fundraising amounts often have a long airdrop distribution period due to the lack of cash flow, and the airdrop hunters' frontlines are correspondingly extended. Long-term investment with no returns has become the norm. In addition, large fundraising implies project stability. For users, increased certainty attracts many people to participate, diluting airdrop shares.

As a result, some airdrop hunters have shifted their focus to small and refined projects. These projects often disclose relatively small fundraising amounts, but due to the smaller number of participating users, airdrop hunting is more cost-effective. Projects such as Starknet, Layerzero, and ZkSync, which have been jokingly referred to as "The Three Stooges" due to their long-term PUA community members, have all experienced varying degrees of declining active data.

Another airdrop hunting strategy is to look for projects with a background in major exchanges. Given that the value of airdropped tokens depends on the expectations of major exchanges, many airdrop hunting activities revolve around projects with relationships with major exchanges such as Binance, OKX, Coinbase, etc., such as projects funded by Binance Labs Fund, Coinbase Ventures, or projects within the ecosystems of major exchanges. Another type of bargain hunting revolves around top VC firms such as Paradigm, a16z, which participate in fundraising but with smaller amounts, and appear to be relatively niche projects.

In addition, some relatively obscure airdrop rules, such as continuous check-ins for NFPs, or Arkham registrations, can lead to a satisfying average airdrop share. However, after the appearance of a cold rule that leads to a one-time wealth effect, it becomes a widely recognized rule in the market, and attempting to "copy" it to form a continuous path dependency may not be feasible. This market, and even the world, is almost full of uncertainty, and past historical experiences may not necessarily apply to the vast future. All so-called "rules" and "conventions" are likely to be rewritten in the near future.

Perhaps the leading projects in each track are trying to invent new airdrop rules, and these rules may bring about different innovations. However, the essence remains the same: the recipients of rewards distributed by project parties always revolve around loyal users who are "early adopters + deeply involved + contribute large funds".

Debate: The game between airdrop farmers and project parties

Recently, Starknet caused controversy by referring to users focused on airdrops as "electronic beggars" on social media and even created a "electronic beggars" channel on its official Discord, leading to community criticism. Similar conflicts between project parties and airdrop players have also occurred with Scroll, and later, individuals associated with Scroll and Starknet personally engaged with the community, even blacklisting users on social media, causing community outrage. Although the parties involved later apologized, they were unable to completely dispel the community's grievances. This public relations controversy had a reverse marketing effect on the community and is worth analyzing as a case study.

This public opinion incident exposed the delicate relationship between airdrop farmers and project parties. The unspoken rules and tacit understanding formed by airdrop hunters and project parties seem to have led to misunderstandings between the two. Many users believe that airdrops are their "earned income." In the bear market, users work hard to actively participate, contribute fees, and help create the illusion of prosperity on the chain, and they believe they should receive "compensation." However, these users are often very purposeful, and project parties may not necessarily fully agree with their demands.

During the early airdrop era when airdrop hunters had not yet formed large groups and there were mostly genuine users (possibly before 2021), project parties did not exclude the participation of low net worth users due to good user retention rates. However, as mentioned earlier, due to the influx of a large number of airdrop hunters, this method of airdrop that allows mutual recognition between project parties and users is gradually decreasing.

Furthermore, airdrops should not be seen as the end of a project. Some cases have shown that successful airdrop programs can stimulate user activity in projects. Jupiter has an annual airdrop program, and after the first airdrop distribution, Jupiter's DAU briefly exceeded that of Uniswap; the STIP funding program of Arbitrum and the Optimism Op Grants have kept their active data at high levels for a long time.

In order to lock in funds, some project parties may take a different approach by first supporting ecosystem projects or developers. For example, Base, which does not issue tokens openly, attracts large holders to deposit funds on the protocol and cultivate user stickiness through applications such as https://t.co/HmXSsNRtzH and Bold that generate profits. However, even excellent applications like Uniswap have faced the problem of stagnant TVL before issuing tokens. It can be said that airdrops are a powerful move when the community's contribution to the ecosystem is weak, growth is sluggish, or even regressing, but it should not be the last move.

Conclusion

Community members generally complain that airdrop hunters support on-chain data, help projects survive in the bear market, and on the other hand, many project parties ignore airdrop hunters but indirectly attract them through various hints or by collaborating with third parties to initiate tasks, encouraging users to participate in on-chain interactions, but delaying the announcement of airdrop plans. This kind of inconsistency often triggers negative emotions in the community.

Airdrops that directly attract funds for deposits utilize the liquidity of users' funds and will reward users with airdrops in the future, and users also need to consider the opportunity cost.

The airdrop standard, from interactive to deposit-based, may become the norm in the future, with the main criterion being the user's deposited funds, reflecting the changes in the game and demand between users and project parties. However, this game between project parties and users may be alleviated as the bull market approaches and the overall crypto market environment warms up. In the bear market, the prisoner's dilemma of airdrop distribution by projects may improve as market funds gradually become more abundant. There have been recent complaints about "staking protocols having more ETH than users' hands." With the change in the landscape of fewer projects and more users, the attitude of project parties may also shift from rejecting airdrop hunters to competing for them.

The original intention of project parties is not to confront the community, but after the addition of thousands of studios to the airdrop army, they need to be more cautious in airdrop distribution. It is now basically unrealistic to get rich through airdrops, which requires strong research capabilities or good luck to discover the future value of niche projects. For airdrop hunters, the golden age of mass airdrops and picking up money everywhere has become history, and the future narrative of airdrops is uncertain. Everything needs to consider the classic "one's success depends not only on one's own efforts but also on the progress of history."

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