Airdrops 2.0: Discovering the Next Era in Crypto Distribution
In the ever-evolving landscape of cryptocurrency, token airdrops have become a popular method for distributing digital assets to a wide range of users. However, as the blockchain industry matures, new concepts are emerging, revolutionizing the way airdrops are conducted. These innovative approaches incorporate advanced criteria that go beyond simple token giveaways, based on on-chain interactions.
By incorporating these criteria, token airdrops are transforming into strategic initiatives that target a specific demographic of users. By analyzing various data points, we can make estimates regarding the criteria that a specific project will implement to identify the specific demographic of users they want to reward.
In this article, we will explore these new concepts that shape the next generation of token airdrops and their potential to drive meaningful value creation for projects and participants alike. If you prefer to skip the history of crypto airdrop eligibility criteria and Sybil attack detection mechanisms, you can jump straight to the list of criteria we believe will be implemented in the future.
In order to understand the future we have to look at the past
If we analyze airdrops from the past, such as the Uniswap airdrop, which was arguably the first significant DeFi airdrop, we can observe that their eligibility criteria were quite simple. Users only needed to interact with the protocol’s smart contracts once to qualify for the airdrop and receive 400 $UNI tokens. Even wallets with failed transactions were counted as interacting with the protocol and thus received the same amount of tokens. At the peak value in May 2021, these 400 $UNI tokens were worth around $17,000 USD. Since then, several protocols have conducted airdrops, including 1Inch, DYDX, Optimism, and Arbitrum, among others.
With the growing popularity of token airdrops, some users started farming protocols using multiple wallets to receive a larger share of the allocated supply. Some users even created bots to farm hundreds or even thousands of wallets. Since most of these so-called “Sybil” airdrop farmers who manage to receive the airdrop immediately sell the tokens, causing a price dump after launch, newer protocols have started implementing stricter rules on the qualifying criteria to determine a better way to distribute their tokens. This makes sense since the main reasons behind an airdrop are generally:
- Governance: Distributing tokens to past users can promote participation in project governance decisions. This allows users of the protocol to have a say in the project’s future and promotes community involvement.
- Decentralization: Airdrops can help distribute tokens to a large number of people in a decentralized and fair manner. This ensures broader token ownership and reduces concentration among a few stakeholders, promoting decentralization and inclusivity.
- Community Building: Airdrops are an effective way to build and engage a community around a project or protocol. By distributing tokens to a wider audience, the project can attract new users, increase brand awareness, and foster a sense of ownership and loyalty within the community.
- Adoption and User Onboarding: Airdrops can act as a user acquisition strategy, incentivizing individuals to try out and engage with a project. By distributing tokens to potential users, the protocol can encourage adoption, drive initial usage, and bootstrap the network effect. Additionally, projects can roll out yield farming incentives with their governance token.
How can protocols filter out Sybil farmers?
Notable examples in recent times of protocols that applied filtering criteria to eliminate Sybil attackers were Optimism and Arbitrum.
Optimism didn’t fully disclose their method of detecting Sybil addresses, but some criteria and methods were made public. Additionally, they published a list of excluded addresses for users to check if their wallet has been tagged as a Sybil Wallet.
Address Activity: Addresses needed to have used Ethereum for more than 1 day (with a 24-hour period between their first and last transaction) to qualify for the ‘Active Ethereum Participants’ criteria.
Bot-catching proposal: Optimism introduced a proposal on Snapshot that aimed to identify and exclude bot addresses automatically, effectively trapping them.
Exploiters: Known exploit addresses were filtered out.
Exchanges and On-Ramps: Centralized exchange and fiat on-ramp addresses were filtered out.
Multiple time use of the protocol: Wallets that used Optimism for more than 1 day (with at least 24 hours between their first and last transaction) and made a transaction using an app (after June 23, 2021).
Repeated use of the protocol over time: Wallets that are categorized as an ‘Optimism User’ and made at least 1 transaction with an Optimism application across four or more distinct weeks. This selects for the top 20% of ‘Optimism Users’.
Exchange, fiat-on-ramp, and exploiter addresses were excluded from receiving the tokens. The eligible addresses were those that had used Ethereum more than once, didn’t use a bot to vote on proposals, and had engaged with the protocol over multiple days and weeks.
Additional tokens were distributed to DAO voters, Multi-Sig signers, Gitcoin Donors (on L1), and Users Priced Out of Ethereum who fulfilled the aforementioned criteria.
The recent Arbitrum airdrop revealed a potential trend for higher requirement thresholds in future airdrops. Arbitrum introduced a points system that mandated users to fulfill specific criteria to be eligible. A minimum of three points was required to qualify for the airdrop. The more criteria were met or points fulfilled by a user, the greater the number of tokens allocated to that user.
The criteria of the Arbitrum airdrop were:
Bridged to Arbitrum:
Transaction Over Time:
Transaction Frequency and Interaction:
Transaction Value:
Assets Bridged to Arbitrum One:
Activity on Arbitrum Nova:
Additionally, Arbitrum employed their own Sybil detection method to identify likely Sybil wallet clusters. These clusters were detected by examining two graphs.
Graph 1: In this graph, each transaction with msg.value is represented as an edge with their corresponding (from_address, to_address).
Graph 2: In this graph, each funder/sweep transaction is represented as an edge with their corresponding (from_address, to_address).
A funder transaction refers to the first ether transfer to an account, while a sweep transaction refers to the last ether transfer from an account.
By utilizing this method, they identified Sybil clusters based on known patterns.
- Addresses transferring funds in a cluster of more than 20 addresses
- Addresses that are funded from the same source
- Addresses with similar activity
Eligibility Criteria for future Airdrops:
If we examine the potential criteria for upcoming token airdrops, such as the one expected for zkSync, it is reasonable to speculate that the applied criteria will be even more stringent. Firstly, we discourage the use of multiple wallets due to the significantly increased likelihood of detection. Having one wallet with a robust interaction history that identifies you as a loyal user should suffice.
In general, it can be speculated that to qualify for the airdrop, we would need to be among the top 20% of wallets in terms of activity, volume, and time spent on the protocol. A convenient way to estimate if we fall within the top 20% is to examine the current protocol data.
Deposit Value
From this data, it is evident that the majority of users (87.7%) who bridged to zkSync Era Mainnet only deposited a value between $0 and $1000. Depositing over $1000 USD already places us in the top 12.3% of users. To further enhance our chances of qualifying, we can also bridge to zkSync Lite using the same wallet that we used for zkSync Era Mainnet.
Number of Smart Contract Interactions
As a general guideline, to qualify for an airdrop on a major protocol like zkSync, it is advisable to interact with various native smart contracts at least 10 times. Considering that some users have multiple hundreds of transactions on zkSync already, having around 100 transactions would certainly position us in the top 20% of users, potentially maximizing our token allocation for this criterion.
Activity over Time
Past airdrops have demonstrated the advantage of spreading out interaction patterns over time instead of conducting all interactions within a short timeframe. To increase our chances, it is recommended to space out our interactions on a weekly, biweekly, or monthly basis. This indicates that we are not just one-time users but loyal returning customers.
Providing Liquidity
Although not extensively utilized in past airdrops, a criterion that is expected to gain more recognition is the liquidity provider criteria. Providing liquidity signals a higher commitment to an underlying protocol and entails more risk factors than simple swapping on a DEX. We believe that future airdrops will increasingly acknowledge the importance of liquidity providers and reward them based on the volume they have historically provided.
Social and Community
The latest inclusion in airdrop eligibility criteria is expected to involve criteria related to community building and engagement on social media platforms. Discord and Twitter, in particular, have emerged as significant hubs for community activity. Sui has provided a glimpse into how Discord could be utilized to filter out loyal community members and blacklist users with Sybil identities seeking unfair advantages.
Another noteworthy platform that should be on the radar of every DeFi and airdrop enthusiast is Galxe. Galxe has already been successfully utilized by multiple projects to create social media tasks and reward users through NFT mints. These NFTs can serve as identifiers for users deserving of a token airdrop. Goal3, which we previously discussed, is presently conducting a Galxe campaign. To gain further insights on how to qualify for the upcoming Goal3 airdrop, you can click here.
Even though we believe that following these steps will fulfill the qualifying criteria for the majority of airdrops, this list is by no means exhaustive. If you are aware of any criteria that we may have overlooked, please feel free to mention them in the comment section.
For further information on Web3, DeFi, and updates on upcoming airdrops, we recommend following Blockdrops.
