Original title: "Airdrops vs AO's Fair Launch"
Cryptocurrency airdrops have become a way to distribute tokens and incentives Popular ways to participate in the new blockchain ecosystem.
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 encountered some issues during the initial distribution of STRK tokens, with many users claiming they were not eligible due to changes in short selling eligibility despite their large number of transactions. Based on a snapshot of November 15, 2023, short holding eligibility requires holding at least 0.005 ETH.
After the initial airdrop on February 20, 2024, a large number of STRK token holders sold millions worth of tokens, causing the price to drop 60% from its peak. Since then, the coin price has struggled to recover.
Jito adopted a graded distribution method that benefits small participants and airdropped 100 million JTO tokens to early users, subscribers, validators, and searchers. Airdrop distribution that favors small users is considered a fair decentralized governance method that promotes community participation. However, some larger investors feel their risk reward is insufficient. There are concerns about Sybil attacks, but this is not a big concern.
The choice of airdrop distribution can have a significant impact on decentralization, governance, and participation. Notably, eligibility criteria requiring economic activity can reduce impersonation attacks. Tiered allocations that benefit small users can promote equality but can frustrate large investors.
Arbitrum airdropped 116.2 million ARB tokens to more than 625,000 eligible addresses and protocol DAOs 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 their tokens.
This failed airdrop launch has eroded the community’s trust in Arbitrum. Users have criticized the project for being poorly prepared, with some even accusing 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 airdropped its native token, TIA, to over 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. In the four days following its mainnet launch, Celestia failed to gain significant traction with less than 350,000 transactions.
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 staking can help incentivize participation and growth. Focusing on building community, engaging developers, and demonstrating its unique value proposition is key to driving adoption and network activity.
EigenLayer is allocating 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%) are allocated to investors and the EigenLayer team, while a relatively smaller portion is reserved for stakers. This uneven distribution has led to accusations of unfairness and centralization. It is important to ensure fair token distribution, work toward inclusive participation, consider flexible token transferability, and prioritize transparency.
On March 24, 2024, zkSync distributed 3.675 billion ZK tokens to 695,232 eligible wallets. Eligibility for the airdrop is based on activity thresholds and ecosystem contributions. 89% of the tokens were allocated to eligible users, with the remaining 11% allocated to contributors. Airdrop tokens have no vesting or lock-up period and can be claimed until January 3, 2025.
There are concerns that airdropped tokens may end up in the hands of a few exploitative wallets, rather than being distributed equitably. zkSync’s airdrop highlights the need for strong Sybil-proof measures to ensure fair token distribution. Potential improvements include social verification, on-chain behavioral analysis, per-wallet caps, prioritizing organic activity, and more.
AO’s Fair Launch is a unique distribution event designed to reward Arweave (AR) token holders and incentivize contributions to the AO network liquidity bridge. The Fair Launch distributes 100% of the 21 million AO token supply to the community, with 36% allocated to AR token holders and 64% to users bridging assets to AO from other networks.
Unlike most airdrops that allocate a portion of tokens to private placements, team members, or early investors, Fair Launch distributes all tokens to the community. AR token holders will receive AO tokens based on their AR holdings, while users bridging assets such as ETH (stETH) to AO from Ethereum or Solana will receive remaining AO tokens. This approach ensures a fair and transparent distribution process.
AO tokens follow a Bitcoin-like halving cycle, with the distribution rate gradually decreasing every five minutes. This results in a smoother issuance curve for Bitcoin’s sudden halving event every four years. The AO token’s scarcity (maximum supply is 21 million) and unique distribution mechanism provide a solid foundation for its long-term value proposition.
AO’s fair launch actively encourages community participation by rewarding AR token holders and incentivizing liquidity bridging. Fair Launch promotes growth and adoption of the AO ecosystem by allocating a large number of tokens to users of the bridged asset. Additionally, developers can build applications that require asset deposits, providing users with the opportunity to support their favorite projects and earn AO rewards.
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.
Additionally, the AO token’s role 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’s storage services will likely increase, driving the value of AR and AO tokens.
Clear eligibility criteria, technical preparation, and fair token distribution are crucial in cryptocurrency airdrops. The AO Token Bazaar in the Arweave ecosystem stands out for its unique approach of allocating 100% of tokens to the community, rewarding AR token holders, and incentivizing liquidity bridging. The AO Exchange emphasizes community participation, transparent distribution, and ecosystem synergy and can serve as a model for future token distribution events. In the ever-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 participation, and driving sustainable growth of the ecosystem.
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