The reward system is dead, and airdrops have perished!

Author: kevin (@kevinLiub)

Or more accurately, it has failed to achieve the expected results.

Now is the time to rethink why we should do this and how to make it more effective.

Why have rewards and airdrops failed?

Initially, rewards and airdrops were intended to build communities and reward genuine contributors. However, they have now become standard practice, almost a checkbox on every project's launch plan. As a result, 'community building' and 'rewarding contributors' are no longer accomplished. Instead, professional 'airdrop farmers' have entered the scene, exploiting these systems for personal gain. Projects invest resources into airdrops, only to face FUD and token dumping as a result. This is a lose-lose situation that benefits neither the project nor the genuine community members.
There are some deeper reasons and challenges causing the current lose-lose situation:

1. Delayed TGE and devalued rewards: Many projects initially offer rewards and promise future token conversions. However, frequent TGE delays can frustrate users, leading to a buildup of rewards that exceeds initial forecasts, thereby diluting their value. If the future value of these rewards is not clarified, they become nothing more than uncertain value IOUs, weakening community engagement.
2. Exchange listing challenges: Rewards are often expected to increase with the anticipation of tokens being listed on major exchanges. However, as listings become increasingly difficult to protect, trust in these systems gradually diminishes, weakening user interest and participation.
3. Airdrop farming dilutes rewards: Airdrops were once a way to reward early loyal users but are now exploited by farmers using multiple wallets to gain rewards. While these activities may temporarily boost on-chain metrics, they ultimately dilute rewards for genuine users and stray from the original intent of building a loyal community.
4. Controversial analytical tools: Some projects use on-chain analytics to combat farming, but these measures may misidentify genuine users. Combined with unchecked farming, this can damage project reputations and create an environment where loyal users feel undervalued while opportunists benefit.
5. Conflicts of interest: Instances of internal farming (team members or insiders leveraging their knowledge to gain rewards) can create distrust within the community and harm the project's credibility.

How to make a change?

What is the real purpose behind reward systems and airdrops? I believe their core objective should be to unite the community around a common vision, rather than fostering a competitive culture (PvP).

1. Launch a culture, not just a product
A project should have a clear cultural characteristic that resonates with its community. Establishing this unique cultural connection is key, especially in a competitive space where users have multiple choices. Culture can become a differentiating factor to attract genuine engagement.
2. Set a unified goal for the community
Coordinate the community around a clear overarching goal. Make it a shared mission, not just a product feature, so that members see their efforts contributing to a common objective.
3. Combine project milestones with rewards and airdrops
Link rewards to key project milestones so that as the project develops, the community's rewards will also grow. This structure allows users to engage in the project's success and fosters a sense of shared progress.
4. Establish a tiered reward system
Design a reward structure that offers short-term incentives (i.e., lotteries), mid-term rewards (i.e., profit sharing), and long-term loyalty benefits (i.e., voting rights and reputation). This approach gives users reasons for continued participation and makes them feel appreciated for early and ongoing engagement.
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By shifting the focus from tokenization to genuine community alliances, projects can not only cultivate users but also advocates. After all, the most successful communities are built on a foundation of shared culture, goals, and trust. Users receive sustainable rewards, and projects have loyal communities, which is a win-win for everyone.