After ZRO and BLAST Airdrops, Projects and Airdrop Hunters Are “Not Taking Over”

Last night, Blast officially opened its airdrop claims. Amid the recent “airdrop is dead” sentiment triggered by ZKsync and LayerZero, Blast and its founder Pacman faced no surprise criticism from the community. The main points of contention were:

1. The token claiming process was frustrating.
2. The token price was lower than expected post-launch, resulting in low yields for staking participants.
3. The top 1% of addresses had to endure a six-month linear unlock period.

Specifically, before claiming the airdrop, users were forced to watch a video lasting several minutes, where Pacman detailed Blast’s tokenomics and development plans. After the video, users had to download a mobile app and obtain four hint words before finally claiming their tokens.

Additionally, analysts had previously valued Blast tokens at no less than $0.03, even under pessimistic estimates. After the token launch, Blast’s FDV was around $2 billion, compared to nearly $10 billion for L2 projects like Arbitrum and Optimism at their launches. This indicates that retail investors are no longer buying into high FDV tokens from VCs.

In terms of token price, some users who staked large amounts found their airdrop returns extremely low. For instance, NextGen Venture co-founder Christian stated that he deposited over $50 million in Blast but only received an airdrop worth $100,000. He went on to call Blast a scam and accused Pacman of being a “serial scammer.” The top scorer @beijingduck2023 staked about $10 million and, despite having 281.2 billion total points and 1.22 million gold points, only received 64,000 BLAST tokens, worth just over $1,000. Furthermore, large addresses (top 0.1%, about 1,000 addresses) have to wait six months for a linear unlock period.

Objectively speaking, Blast received fewer negative reviews compared to recent ZRO and ZK projects. X user @CryptoWoodBro mentioned that in Blast’s first airdrop phase, 7% was allocated to staking points, and 7% to gold points. Staking points could be earned passively, suitable for large investors; gold points required users to study project rules and participate deeply, making them suitable for retail investors willing to put in effort. Additionally, some rules allowed points to double or inflate, thus accommodating small investors by offering opportunities for high returns through diligence.

The “Short and Fast” Era Is Over

Although Blast slightly quelled the “airdrop is dead” discussion by not neglecting small investors and avoiding witch hunts in this airdrop, the point-based airdrop model it represents is not the future of Web3 projects.

Before the airdrop, Blast already faced criticism for its point-based model. In March, the launch of Blast’s mainnet with new point rules was accused of being manipulative. The new rules required users to migrate ETH points to the mainnet, promising tenfold expansion, but users had to pay over $50 in gas fees, which was too costly for small investors. After migration, users found the expansion rate was a random number between 0-10x. Although Blast later fixed the bug, it left a reputation for having opaque point calculation rules. Previously, the official team also secretly issued a large number of gold points to some Dapps.

When point-based systems were heavily debated in the community, some suggested that the end of this manipulative cycle depended largely on Blast’s launch performance. If Blast’s price was too low, the point-based airdrop manipulations would naturally “go extinct.” Many OGs and KOLs vowed not to participate in point-based interactions in the future.

But even if Blast fails, does that mean the end of point-based airdrops?

Despite long-standing complaints about point-based systems, point farming remains a common marketing and incentive tool for current Web3 projects.

Some well-known projects yet to issue tokens include:

• Scroll announced the Scroll Marks user point calculation rules on May 15, mainly tracking users’ bridging data and gas burn data since the Scroll mainnet launch on October 10, 2023. Future airdrops will be based on Scroll Marks.
• Linea launched the first phase of the Linea Surge point plan (Volt 1) on May 17. Linea Surge will run for six months (6 phases of Volts), with points earned through ecosystem points, referral points, and early adoption and historical contribution points.
• Backpack started an account transaction volume point system in February, where point rankings will be an important criterion for future airdrop eligibility or Launchpool projects.

Additionally, KIP Protocol, KiloEx, Swell, and Puffer Finance, among others, have all launched point activities. Are non-point-based incentive projects any better? Not really. Retail investors face increasingly difficult situations, as without point-based systems, they still have to run nodes, complete tasks on third-party platforms, participate in Odyssey, provide LP staking, buy valueless NFTs, etc.

Even if project teams push airdrop competition to the extreme, it doesn’t mean the end of the airdrop era. Airdrop hunters haven’t stopped due to a few setbacks, and many addresses are still interacting with these unreleased projects. However, the “short and fast” era has ended, marking the end of zero-cost and low-cost airdrops. This signifies the maturation of “airdrop industrialization,” where users become “Web3 product testers” with some capital and professional knowledge, competing in participation depth.

Why Are Projects and Airdrop Hunters No Longer Satisfied with Each Other?

Projects can never satisfy everyone, but why do this year’s airdrops seem to generate more negative sentiment?

The most important reason for this situation is the overall market downturn. Despite the BTC price and some altcoins rising due to the BTC ETF, there isn’t much new capital flowing into the crypto market. There’s only rotation among new concept sectors. Retail investors, repeatedly battered by high-valued, low-liquidity “value coins,” finally become disillusioned and choose not to FOMO. The competition among VCs, project teams, exchanges, and retail investors for limited funds leads to sharp declines in most projects’ token prices post-airdrop. Moreover, without the wealth effect of “value coins,” it’s hard to attract new users.

Secondly, airdrops are no longer good business for both project teams and users. The industrialization of airdrops has created an irreparable cognitive gap between them.

The best airdrop in history is Uniswap, a statement that no one disputes. However, no one can replicate the unique airdrop feast of a pioneer. The so-called “good” airdrop consisted of three now-unachievable factors: users had no high expectations for airdrops, interaction thresholds were extremely low, and airdrop values were high.

The wealth effect of airdrops nurtured their industrialization, gradually widening the cognitive gap between project teams and users.

For project teams, airdrops signify product-market fit. They believe their products meet current market demands (though how many Web3 projects have real use cases and core value?), and airdrops are rewards for actual users. This mindset leads to arrogance, as seen in LayerZero founder Bryan’s response to the “forced donation,” saying, “If you don’t want to donate, don’t claim the tokens. This is not something you own; it’s something others provide.” For project teams, token airdrops become “charity” to users.

For users, the industrialization of airdrops means they expect every project to conduct airdrops. They participate as “workers” and “farmers,” contributing technology, time, and costs to help build the ecosystem, enhance project data, and valuations, and secure more financing, deserving corresponding rewards.

From the results perspective, for project teams, low airdrop thresholds attract “low-value” users, risking token dumping post-launch. Short-term, low-value users quickly extract funds and move liquidity to the next “farm.” For users (especially retail investors), even with small capital, they incur real costs during interactions and often face risks due to opaque airdrop rules from project teams.

Uniswap founder Hayden Adams advocated for fostering early adopter reward culture, fair and widespread value distribution, simple self-adoption, encouraging people to try new things, achieving early liquidity, and early price discovery through a “perfect airdrop”—a feat achievable only once, as Web3 is no utopia.

Airdrops Need Redefinition

Jupiter co-founder Meow, in the recent LayerZero airdrop discussion, proposed that “an airdrop is a gift, not a reward, not a loyalty program, nor a growth tool. It’s that simple. If you ask what you get from it, it’s no longer a gift, losing its essence and initial sincerity.” He further explained to help protocol developers think about airdrops.

He suggested that we need a clear definition of airdrops. An airdrop is an airdrop, incentives are incentives, rewards are rewards, and growth is growth. The confusion of these terms leads to the current issues in airdrops.

I agree with his latter point. Clear definitions help resolve the aforementioned issues and bridge the cognitive gap between project teams and users. Perhaps, project teams should separate the budget for user growth from the budget for gift-like airdrops.

Crypto KOL Cobie, discussing the “airdrop is dead” topic, believes current airdrops struggle to meet user expectations and can easily be criticized for minor mistakes. Project teams might try better listing methods without airdrops.

Binance co-founder He Yi recently commented that the internal conflicts among airdrop studios and L2 projects have turned into a farce, and the airdrop era might be ending. As ordinary investors, strategies from the 2017 ICO, 2021 IEO, nested structures, and even 2023 airdrop strategies may no longer suit today’s market.

In the “airdrop industrialization” era, we might indeed need to redefine airdrops and redesign the rules based on this definition.

Although there’s no perfect airdrop or incentive method, project teams must note that what users need most is fairness, fairness, and fairness!