airdrop

Do Airdrops Hurt More Than They Help?

At their best, airdrops decentralize the protocol, reward early users, and solidify a community. At their worst, airdrops alienate users, curb momentum, and leak massive value to sybils.

An excerpt from our latest deep dive 👇

Airdrops have become increasingly scrutinized and are rarely celebrated now.

In his latest report, Neel unpacks recent airdrops, analyzes protocol health pre & post airdrops, evaluates key metrics to monitor, and discusses potential solutions for token launches.⤵️

Industry-leading Crypto Analysis & Insights.


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Airdrops originally started by retroactively rewarding users for their behavior (trading volume on dYdX, ENS domain..). 

But now, most airdrop programs follow a points program, wherein the protocol team determines how to value user behavior and allocates tokens accordingly.

Another popular trend is airdropping tokens to strong crypto communities that aren't direct users of your protocol but boost its visibility. 

👉Milady, Pudgy Penguins, and MadLads have received several popular airdrops in the past year, including $TIA, $ENA, $L0, $W, and $ZK

The Kamino Case

Kamino is a unique case study to analyze for its airdrop strategy since its points program helped them efficiently execute their user acquisition plan and dethrone marginfi as the leading money market on Solana.

However, one of the simplest sybil strategies involves trying out all the product’s features to secure a minimal airdrop allocation. 

Estimating users expecting a minimal airdrop can be done by examining wallet interactions with protocol smart contracts. ⬇️

On @parcl over 158k wallets interacted with smart contracts fewer than three times, likely farming airdrops without intending continued usage post-snapshot.

Solana Growth Since Jito

@jito was one of the first projects to implement a simple points program before most users became fatigued by this meta. 

The campaign went under the radar compared to most points programs today as it was launched in the depths of the bear market.

In the two weeks following the Jito airdrop announcement, over 10k users deposited SOL each week. Recently, we’ve seen more users utilizing the Deposit Stake function, i.e., they are migrating their stake accounts from other LSTs and validators to Jito.

JTO's airdrop is an outlier, but it is an example of how one airdrop can kickstart exponential growth for an entire ecosystem.

SOL’s DEX volumes, DAUs, and tx counts now exceed ETH Mainnet on many days. TVL has been on a constant climb since the end of Nov, aligning with the Jito Airdrop.

Looking at L2, @zksync has been showing signs of a slowdown in transaction activity since April, even before the snapshot had been announced – possibly due to certain sybil activity wrapping up on the L2 and moving to newer protocols.

In March 2023, @arbitrum was the top Layer-2, doubling its daily transactions post-airdrop. Starknet and Manta, however, experienced significant declines, both handling fewer than 100k tx on most days in the past 2 months, with a scaling factors below 0.1.

With Liquid Restaking assets, the rotation is characterized by a relentless pursuit of airdrops. New deposits flow in continuously, each one motivated by the promise of the next big reward.

Addressing what fraction of a protocol’s usage is organic by analyzing data before, during, and after the airdrop snapshot to understand activity and trends is crucial.

Check out the full report to arm yourself with the full metrics toolkit! 👇

Addressing what fraction of a protocol’s usage is organic by analyzing data before, during, and after the airdrop snapshot to understand activity and trends is crucial.

Check out the full report to arm yourself with the full metrics toolkit! 👇
https://delphi.link/AirdropsReport

Airdrops have become increasingly scrutinized and are rarely celebrated now.

In his latest report, Neel unpacks recent airdrops, analyzes protocol health pre & post airdrops, evaluates key metrics to monitor, and discusses potential solutions for token launches.⤵️

https://delphi.link/AirdropsReport