From $UNI to $ARB, $TIA, and more… Whether you hold or promptly sell your tokens, airdrops can be a way to get early exposure to projects and narratives in crypto.
Today is a significant date for airdrops, with Blur’s season 2 airdrop campaign coming to a conclusion. In addition, $PYTH is being distributed to users spanning a variety of chains and projects.
Plus, keep reading to learn how you can qualify for an upcoming perps DEX airdrop.
Stay alert, stay informed ⬇
Our CEO, Nick Drakon, recently had on ChainLinkGod to discuss the path to Chainlink potentially becoming a Trillion-dollar asset. The two discuss the bull case for $LINK, and dive into new products and services being rolled out.
What do Airdrops Cost a Protocol?
On paper, the cost of airdrops seems justifiable considering the scale of the projects, despite most not having generated equivalent returns or retained users.
Protocols might not have much choice but to distribute tokens if they opt for a DAO structure which suggests that financial logic might not be the driving force behind these decisions.
Regulatory reasons could influence teams to distribute tokens in a more decentralized way, rather than allocating them to private investors.
One must also consider the cost of preventing sybil attacks, or people from gaming an airdrop allocation system.
Even with KYC requirements, there was serious demand for Backpack exchange’s $PYTH airdrop
Token & Incentive Strategy
The aim of airdrops is often simply to distribute a set amount of tokens to the community.
There is a distinction between ongoing incentives for usage of a project, and airdrops.
While airdrops' efficacy can be questioned, their strategic value shouldn't be dismissed outright.
Airdrops are becoming more strategic, requiring recipients to take action or contribute to the ecosystem before claiming their tokens, aiming for a more engaged and deserving community of token holders.
This is clearly the case with Blur, the leading NFT exchange, and it’s $BLUR airdrop campaign.
Airdrop farmers had to provide NFT liquidity, list or bid on NFTs.
The campaign’s reward distribution has long been delayed, as it is only occurring now although it was initially planned to happen back in April.
This highlights the increasing requirements to receive airdrop incentives; premium members can access our Analyst Insight on $BLUR here.
Celestia’s Developer Focus
Mike Ippolito of The Block talks about the token allocation for Celestia's launch.
He expresses concern over the labeling of a significant percentage of tokens as "insiders," considering it a negative framing. He describes the allocation breakdown and responds to some criticism of the launch.
Mike also defends the role of venture capitalists (VCs) in crypto, arguing that the space relies on their investments, especially during downturns.
However, he also acknowledges the negative sentiment due to past instances of VCs dumping tokens on retail investors.
This is another reason airdrops may be favored by the masses, as they appeal to a large retail base while rasing from investors gives an opportunity to a much smaller group of people with concentrated capital.
Mike challenges the pushback from the community, suggesting some people feel entitled to allocations they would likely dump themselves.
He has asked about the rationale behind distributing large allocations to the community without clear justification, advocating for a balance between community incentives and rewarding the project team and contributors.
“Is this actually effective at either of the goals? I don’t know. Maybe this will be a new meta; a new way to do distribution going forward.”
-Tom Schmidt, Partner at Dragonfly Capital
Myles O’neil, contributor at Reverie says that there must be a strategic reason why blockchain projects would opt to freely distribute tokens, suggesting that this approach is aimed at maximizing their potential growth rather than merely benefiting short-term speculators.
He considers that for Celestia specifically, the airdrop is not the crucial aspect, given that there's no immediate utility for retail users needing $TIA for transactions.
He says that the focus for Celestia is probably ensuring roll-ups use $TIA as a primary asset, balancing this with attracting roll-ups that might prefer their own gas tokens.
Celestia's unique position as an L1 originates from the Cosmos ecosystem, targeting developers rather than retail users.
He compares Celestia's marketing challenge to pharmaceutical companies advertising to consumers despite doctors being the prescribers, suggesting Celestia must appeal to end-users indirectly through developers.
Mike expresses his appreciation for Celestia's light node solution, which aligns with a broader definition of decentralization that highlights accessibility and integrity verification on common hardware.
He hypothesizes about a future where professional node operators perform core blockchain functions while end-users verify system rules, perhaps on mobile devices.
Myles adds that Celestia's lack of token governance, unlike other chains, aligns with their minimalistic approach, differing from chains that use governance to allocate incentives to projects or protocols.
Myles explains Celestia's strategy, as it aims to attract developers from both Cosmos and Ethereum ecosystems by offering cost benefits and profitability for roll-ups.
He views the $TIA token as a means of building brand awareness with end-users separately from those using the network.
Many would say this strategy has worked, as there are more eyes on Celestia than there has been in a while, in part due to the token’s outperformance relative to other assets in the space.
Myles speculates on integrating light nodes into wallet services to enhance data accessibility for end-users. He says that were he advising Celestia, he would encourage partnerships with wallet providers.
Contango
From $TIA to $BLUR and $PYTH, analyzing airdrop campaigns retroactively can help one to make informed decisions going forward.
One airdrop opportunity we’ve briefed our members on is Contango.
Contango is a decentralized market specializing in cPerps (Contango perps).
It leverages a unique architecture that automates looping strategies through recursive borrowing and lending on spot and money markets, including Aave, Radiant, and others.
Contango Founder Kamel Kamel confirms the likelihood of a token in the future.
He shares that before finalizing the exact mechanism for the token, the plan is to expand Contango to more chains and protocols to target a larger user base.
He emphasizes that they have always been clear within the team that any volume generated from the start, from any version of Contango, will be rewarded.
Given Contango’s successful fundraising rounds, raising over $4 million with the latest round at a $45m valuation, the platform demonstrates substantial market confidence.
This financial backing and planned Token Generation Event (TGE) for a 1 billion total supply hint at a potential airdrop to foster community growth and reward early adopters.
You can access our full Contango Airdrop Guide for a step-by-step guide detailing how to use the project best to qualify for airdrop incentives.
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