Author: Community Labs
Compiled by: TechFlow
Cryptocurrency airdrops have become a popular way to distribute tokens and incentivize participation in new blockchain ecosystems.
By comparing recent major airdrops, we can identify potential issues and best practices. This article will analyze these airdrops and compare them to the unique fair launch of the AO token in the Arweave ecosystem.
Starknet
Starknet encountered some problems with the initial distribution of STRK tokens, with many users claiming they were ineligible despite significant trading activity due to changes to airdrop eligibility, which requires holding at least 0.005 ETH as of the November 15, 2023 snapshot.
After the initial airdrop on February 20, 2024, a large number of STRK token holders sold millions of tokens, causing the price to drop 60% from its peak. Since then, the token price has been struggling to recover.
Victory
Jito airdropped 100 million JTO tokens to early users, subscribers, validators, and searchers using a tiered distribution that favors small players. The airdrop distribution that favors small users is considered a fair decentralized governance method that promotes community participation. However, some larger investors believe that their risk-reward is insufficient. There are concerns about Sybil attacks, but this is not a major problem.
The choice of airdrop allocation can have significant impacts on decentralization, governance, and participation. Notably, requiring eligibility criteria for economic activity can reduce impersonation attacks. Tiered allocations that favor small users can promote equality but may frustrate large investors.
Decision
Arbitrum airdropped 116.2 million ARB tokens to over 625,000 eligible addresses and the protocol DAO on March 23, 2023 as part of the transition to the DAO. However, serious technical issues affected the airdrop, and high gas fees prevented many users from claiming tokens.
The failed airdrop launch undermined the community’s trust in Arbitrum. Users criticized the project for being ill-prepared, and some even accused it of deliberately keeping gas fees high. Arbitrum’s airdrop reminds us of the importance of adequate preparation, load testing, and clear communication during high-demand events.
Celestia
Celestia airdropped its native token TIA to more than 600,000 eligible users. However, only about 190,000 users (less than a third) claimed their tokens, leaving nearly $1 million in TIA tokens unclaimed. Within four days of the mainnet launch, Celestia had less than 350,000 transactions and failed to gain significant traction.
Low claim rates and modest transaction volumes indicate a lack of interest or awareness among potential users. Offering attractive staking rewards and ensuring token stability through lock-ups can help incentivize participation and growth. Focusing on building a community, attracting developers, and demonstrating its unique value proposition is key to driving adoption and network activity.
OwnLayer
EigenLayer allocated 15% of its EIGEN token supply to airdrops, rewarding users who stake ETH or Liquid Staked Tokens (LST) on the platform. The airdrop sparked controversy within the crypto community, with many questioning the fairness of the token distribution, the exclusion of certain user groups, and the initial non-transferability of the tokens.
The majority of tokens (55%) were distributed to investors and the EigenLayer team, while a relatively small portion was reserved for stakers. This uneven distribution has led to accusations of unfairness and centralization. It is important to ensure fair token distribution, strive for inclusive participation, consider flexible token transferability, and prioritize transparency.
zkSync
On March 24, 2024, zkSync distributed 3.675 billion ZK tokens to 695,232 eligible wallets. Eligibility for the airdrop was based on activity thresholds and ecosystem contributions. 89% of the tokens were distributed to eligible users, and the remaining 11% were distributed to contributors. The airdrop tokens have no vesting or lock-up period and can be claimed before January 3, 2025.
There are concerns that airdropped tokens may end up in the hands of a few exploitative wallets rather than being distributed fairly. The zkSync airdrop highlights the need for strong anti-sybil measures to ensure fair token distribution. Potential improvements include social validation, on-chain behavior analysis, per-wallet caps, prioritizing organic activity, etc.
AO’s fair launch in the Arweave ecosystem
AO’s fair launch is a unique distribution event designed to reward Arweave (AR) token holders and incentivize liquidity bridging to the AO network. The fair launch will allocate 100% of the 21 million AO token supply to the community, with 36% going to AR token holders and 64% to users bridging assets from other networks to AO.
Allocation Method
Unlike most airdrops that allocate a portion of tokens to private placements, team members, or early investors, the fair launch distributes all tokens to the community. AR token holders will receive AO tokens based on their AR holdings, while users who bridge assets such as staked ETH (stETH) from Ethereum or Solana to AO will receive the remaining AO tokens. This approach ensures a fair and transparent distribution process.
Token Economics
AO tokens follow a Bitcoin-like halving cycle, with a gradually decreasing distribution rate every five minutes. This results in a smoother issuance curve than Bitcoin's abrupt halving events every four years. The scarcity of AO tokens (maximum supply of 21 million) and a unique distribution mechanism provide a solid foundation for its long-term value proposition.
Community Involvement
AO's fair launch actively encourages community participation by rewarding AR token holders and incentivizing liquidity bridging. By allocating a large number of tokens to users of bridged assets, the fair launch promotes the growth and adoption of the AO ecosystem. In addition, developers can build applications that require asset deposits, providing users with the opportunity to support their favorite projects and earn AO rewards.
Long-term impact on the Arweave ecosystem
Fair Launch has the potential to drive significant value and growth within the Arweave ecosystem. By rewarding AR token holders, Fair Launch strengthens the synergy between Arweave and AO, encouraging mutual growth and adoption. The inflow of assets bridged from other networks can drive the development of innovative dApps on AO, leveraging Arweave’s persistent storage capabilities.
In addition, the role of the AO token in providing economic security through its flexible Proof of Stake (PoS) mechanism further enhances the overall robustness of the Arweave ecosystem. As AO grows and attracts more developers and users, demand for Arweave storage services is likely to increase, driving the value of AR and AO tokens.
in conclusion
Clear eligibility criteria, technical readiness, and fair token distribution are critical in cryptocurrency airdrops. The AO Token Fair in the Arweave ecosystem stands out for its unique approach, allocating 100% of tokens to the community, rewarding AR token holders, and incentivizing liquidity bridging. With its emphasis on community engagement, transparent allocation, and ecosystem synergy, the AO Fair serves as a model for future token distribution events. In the evolving cryptocurrency space, prioritizing fairness, decentralization, and long-term sustainability will lead to greater success. The success of future airdrops depends on aligning incentives, promoting community engagement, and driving sustainable growth in the ecosystem.
