A brief history of airdrops and anti-witch strategies: On the tradition and future of mao culture

Author: DefiOasis, Source: Geek web3

Origin of airdrop activity

"Get rewards at nearly zero cost.", "Money is not earned, it is brought by strong winds." This is the voice left by airdrop players on social media in recent years. This kind of free-for-profit profiteering has become commonplace in Web2’s early years of burning money to subsidize users and engaging in price wars. But in comparison, Web3's "subsidy" model of direct payment is more eye-catching. After the myths of airdrops such as ENS and DYDX emerged, the entire Web3 circle fell into the "gold rush" of airdrops.

The Web3 airdrop can be traced back to a programmer named Baldur Friggjar Odinsson, who issued AuroraCoin in 2014 and airdropped 31.8 Tokens to each of Iceland's 330,000 citizens.

But the originator of airdrops recognized by most people is Uniswap. In response to the vampire attack on Sushiswap, the Uniswap project airdropped at least 400 UNI to each address, with a minimum of more than $1,000. After witnessing the diversion effect of the Uniswap airdrop, major projects such as 1inch and Lon rushed to imitate it, which to some extent catalyzed the Defi Summer of 2020. After terms such as Web3 and DAO became more and more popular, airdrops have become a well-established tradition for major project parties in terms of decentralization, and it is not an exaggeration to call it a unique culture in the blockchain circle.

Interestingly, projects that issue airdrops can be divided into two categories: "VC projects" and "community projects". This article focuses on VC projects.

Several functions of airdrop

1. Publicity and marketing

In the past two years, airdrops have become a must for most project parties. A good airdrop event can instantly expand the influence of the project, and for the Lu Mao Party, airdrops are the source of goodwill for the project; Lu Mao Party members spontaneously "show off" their achievements on social media, invisibly creating a "chain" Response", which further aggravated the public's attention to the project party.

Many project parties hope to use airdrops to create a circle effect, attract a group of new users and build stronger stickiness with early users. In DeFi, NFT and other tracks, airdrop distribution is also one of the paths for many project parties to seize market share and launch "vampire attacks" on competitors.

(The number of daily transactions on the OP chain has remained high for a long time after the airdrop)

Although airdrops can drive sales and innovation, there is some evidence that they do not actually help user loyalty. According to the Uniswap data dashboard created by Dune user @jhackworth, only 6.2% of the airdrop addresses still hold UNI, and the addresses that originally received the UNI airdrop and remain active every week now account for less than 2% of Uniswap’s weekly active addresses. Transactions The volume ratio is only 1%.

Although the decline in the above ratio may be related to the growth of users without airdrops, the weekly activity of addresses with airdrops continues to decline (as shown in the figure above), which actually reflects that UNI airdrops are not as strong as expected in boosting user stickiness.

2. Decentralization of chips

After completing early development, many project parties tend to partially transfer governance rights and responsibilities and create DAO organizations to achieve decentralization. Most POS public chains often have a stronger demand for chip decentralization than Defi projects, so some tokens are usually transferred out through airdrops or public offerings.

In order to reduce the concentration of token shares among early VCs and project parties themselves, most projects will distribute part of the tokens to the community or early users, and community members can help redistribute the chips to further disperse them into the hands of more people.

The game between the Lumao Party and the project party

1. Witch Hunt – a game of cat and mouse

Sybil Attack was first proposed by John R. Douceur of Microsoft Research Institute in 2002. It originated from the 1973 science fiction novel "Sybil". The heroine of the novel, Sybil Dorsett, suffers from dissociative identity disorder with 16 personalities. . In the Internet world, Sybil attacks mainly refer to the purpose of gaining power and benefits by creating many false identities/accounts and pretending to be multiple different entities, but in fact the controller behind them is all one person.

The phenomenon of witch attacks has existed since the Web1 era. When subdividing into the field of Token airdrops, due to the "no permission" of the blockchain itself and the inherent lack of KYC means, the addresses on the chain have strong anonymity and extremely low cost. It is easier for witch attackers to create a large number of tokens with one "physical body". address to obtain multiple airdrop rewards.

Airdrop project parties often hope to deliver rewards to users and achieve consensus on interests. Although masturbation activities in a short period of time can provide project parties with eye-catching user data, the witch address will cash out after receiving rewards, and will no longer be active after "a wave of traffic", which obviously deviates from the vision of major project parties.

(Aptos, which did not conduct anti-witch censorship, the number of transactions on the chain briefly reached its peak when the airdrop was issued, and then remained sluggish for a long time)

As a result, it is imperative to conduct a "witch hunt" specifically targeting attackers, and there are various ways to deal with witch attacks:

On-chain behavior review: This method is mainly based on on-chain data analysis, through the capital association between addresses (fund distribution or collection, transfer correlation), on-chain behavior similarity (interactive smart contracts, transaction intervals, Transaction time, active time period, etc.) to screen addresses on the chain, which is also the most common review method.

According to the tolerance of the project party, the upper limit of the addresses that are generally allowed to be associated is 10-20. Some project parties will also delegate review rights to the community, reward confiscated witch airdrop shares to anti-witch contributors, and encourage community members to actively report witch addresses. The most typical examples in this regard are Hop Protocol and Connext. But "the height of the road is one foot, and the height of the devil is one foot", the airdrop hunters are also constantly improving their professionalism, and such advanced players often take great precautions.

(One of the reports given by the Connext community based on the report results of the witch addresses on the chain by contributors)

Reputation score: Reputation score generally examines the user's activity records on different chains (such as on-chain activity, transaction volume, consumed Gas, etc.), identity authentication built on well-known applications (ENS, Lens, etc.), and participation On-chain governance (Snapshot, Tally, etc.), NFT collection footprints, etc., analyze the credibility of an address on the chain through multi-dimensional indicators, and whether it is controlled by robots.

This method mainly uses reputation scores to identify sybil addresses, which greatly increases the cost of doing evil for sybil attackers (the reason is a bit like Proof of Work). Gitcoin Passport, Phi, Nomis, etc. are representatives of reputation scoring projects. However, some reputations are based on the behavior of private goods on the classification platform, which will give users who use their own products higher score weights, and even set higher capital requirements in order to win over big players, or require users to upload Twitter, Google, Web2 account information such as Facebook to prove the entity identity of the "person" behind it.

·Biological information verification: Personal biometrics are unique and unchangeable. Each person's irises, fingerprints, and facial features are unique and difficult to forge. For project parties that issue airdrops, biometric information verification can ensure that most of the distributed rewards belong to real users, but this verification is inefficient, and judging from the controversies caused by Worldcoin’s iris authentication and Sei’s facial scan, project parties The collection of users' biological information will also lead to privacy leakage issues, and there are legal risks in different countries and regions.

In addition, KYC certification for uploading the citizen identity information (driver's license, passport, ID card) of the country or region to which you belong, Soul Binding Token SBT, POAP issued through offline or online face-to-face verification, and Proof of human are also mainstream anti-witches. means.

In fact, taking reasonable witch hunting actions to clean up witch users can ensure the fairness of the reward distribution mechanism. However, too strict witch review may accidentally hurt real users, and delegating witch review authority to the community may also destroy the emotions among community members and aggravate conflicts among people.

But no matter what kind of anti-sybil means, it is unrealistic to completely filter illegal users. When the potential benefits are higher than the cost of doing evil, sybil attacks are inevitable (POW and POS cannot stop sybil nodes, they can only be extremely To curb such behavior to the greatest extent), this cat-and-mouse game is also difficult to stop.

2 When one loses, both suffer, and when one gains, both prosper

There is a game relationship between the project side and the users on the surface. In addition to the opposition between the two being reflected in witches and anti-witches, sometimes the project side also hints at airdrops, launches Odyssey missions and other activities to "manage airdrop expectations", so that PUA users can participate in the interaction. , The Lu Mao Party did not know whether there were airdrops and the specific rules for airdrop distribution, so they participated in the interaction at the risk of paying the cost and losing all their money, forcing the project direction to provide users with airdrops, whitelist distribution and other rights.

Although there are various game relationships between the project party and the Wool Party, on the surface, the two are mutually parasitic and mutually beneficial. On the one hand, grooming behavior is an important part of the active data on the project chain, and it can identify various project bugs in the early stages and promote the optimization of product experience, which is equivalent to doing a stress test (OP and ARB are released in the airdrop Performance problems occurred every time), and it also brought business income to the project side. In the Web3 circle, which has always relied on the wealth creation effect, many projects can only rely on the "wool-raising party" to survive the long bear market. The vast majority of project parties also need data contributed by wool parties to increase valuations or list CEX.

On the other hand, the Wool Party can also receive Token airdrops in the future, and the two will jointly build a "false prosperity".

Airdrop policy changes

1. The history of involution of airdrop initiators

The story of the project party’s airdrop history can start from Uniswap. In the DeFi track where liquidity is king, DeFi projects led by Sushi used liquidity mining incentives to "suck blood" from Uniswap in the 2020 DeFi Summer to seize a lot of user shares and lock-up funds (up to 12 One hundred million U.S. dollars). Under this premise, Uniswap was under pressure and issued an unprecedented large number of UNI airdrops to users, launched a liquidity mining plan, attracted users to return and regained the leading position in DEX, and has maintained its position as the leader to this day.

(In 2020, Sushi launched a vampire attack and seized market share from Uniswap)

Today, airdrops have become one of the conventional weapons used to seize users from competitors in the same track and launch "vampire attacks." In order to retain users, project developers have also come up with unique strategies. In the fiercely competitive Layer 2 track, OP has conducted multiple rounds of airdrops to users to put pressure on competitors. However, in the past two years, airdrop-related “vampire attacks” have become more obvious in the NFT field. Before the emergence of Blur, which maximized NFT liquidity, several NFT trading platforms such as LooksRare and X2Y2 tried to capture users through airdrops. However, these products themselves lacked differentiation advantages. After the return expectations gradually dried up, users naturally stopped buying them. The trading volume and activity of the platform have dropped significantly, and OpenSea’s status as the big brother is still difficult to shake.

(Blur is gradually eroding the market share advantage established by OpenSea)

This also serves as a good warning for future project parties, that is, the practicality and rigid needs of the project are still the key to user retention. Excellent products are the moat, and airdrops are just the icing on the cake to complement the project.

Today, Uniswap, which has been updated to V4, is still the benchmark for DEX, and Blur alleviates the liquidity problem of NFT in the bear market. Optimism, as one of the leading Layer 2, provides Ethereum users with a good underlying infrastructure. Although the airdrop belt There was a short-lived enthusiasm, but those projects lacking practicality and rigid demand were eventually buried in the torrent of history.

2. The involution of the Wool Party

From the light experience of just leaving your email address and joining the project community, to deeply participating in the follow-up project to have the opportunity to receive rewards, the airdrop track has changed a lot in just a few years. In the context of few good projects and many users (infinitely many addresses), the relationship between the project side and the users is no longer a dynamic balance, and the initiative is transferred from the users to the project side. By manipulating users' expectations for airdrops, the project team initiated activities such as "Odyssey" for PUA users spontaneously or jointly with task platforms such as Galxe, Layer3, Rabbithole, etc., and the transformation from "seeking users" to "users seeking airdrops" also resulted in the emergence of wool parties “street smarts” of their own community.

3. Direction is more important than hard work

Many wooly parties follow closely the projects invested by famous investment institutions such as A16Z, Paradigm, Coinbase, etc. On the one hand, they believe that these institutions have unique vision and the market value of the tokens issued in the future will be higher. On the other hand, they are projects invested by well-known large institutions. There is a good airdrop probability.

According to the data summary of the airdrop blogger @ardizor, among the well-known investment institutions, the projects invested by Binance, Paradigm and Multicoin have the highest airdrop probability, which are 15.4%, 11.6% and 7.2% respectively.

(The source of the airdrop rate of some famous VC investment projects: @ardizor)

Among the projects invested by well-known VCs, the Wool Party also prefers projects with high financing amounts. Large financing projects mean that they have better cash flow and better prospects, and their airdrops will be more generous. When the project side has the support of well-known VCs and high financing, the odds of airdrops will also increase. Fans will naturally vote with their feet, betting large amounts on unissued tokens such as zkSync, Starknet, Aleo, Aztec and LayerZero. Financing star projects, among which zkSync (approximately 4 million active addresses), Starknet (approximately 2 million active addresses) and LayerZero (approximately 3 million active addresses) are currently densely populated areas for wool parties.

(After the release of the Arbitrum airdrop, the number of addresses and DAUs of Layerzero and Starknet, three projects that raised more than 100 million US dollars, have increased significantly. ZkSyncEra has been growing at a rate of at least 5,000 new active addresses per day since the mainnet was launched in March.)

4. The harder you work, the luckier you will be

Excluding airdrops with non-fixed shares like Worldcoin, Arbitrum, which airdropped in February this year, has the largest address size at the time of the current snapshot, reaching an astonishing nearly 2.3 million. Under the premise that more and more wool parties join and the airdrop share is fixed, the project party needs to subtract the rewarded user group. However, instead of increasing the censorship of witches and gaining a bad reputation in the community, it is better to raise the acquisition threshold, screen out high-quality users, and distribute rewards to user groups more accurately. This is also a common practice of airdrops among project parties today.

Tiga of W3.Hitchhiker, a quantification and venture capital organization, found the approximate distribution pattern of project airdrops:

Start rewards: rank 0%-80% users will allocate about 50% of the total Token.

Intermediate reward: users with rank 80%-90% are allocated approximately 10% of the total amount of Tokens.

Maximum reward: TOP 10% of users will be allocated approximately 40% of the total amount of Tokens.

(Rule 82 also exists in airdrops. Source: Tiga, W3.Hitchhiker)

This kind of ladder-style airdrop will better stratify users, spread most of the Token shares to users who have reached the threshold, satisfy the desire of the wool party, and also take care of the large groups that have made great contributions to the project, and then give depth Maximizing rewards for participants and "everyone getting what they need" can win a better reputation in their respective group communities.

The current typical method of stepped airdrops is the "airdrop points system". The points system is generally divided into explicit and invisible points.

·Explicit points system: represented by mintfun, Blur, Arkham, etc., the project is airdropped but the value of the airdrop is uncertain (some can be calculated and speculated through valuation), and the essence is trading mining or interactive mining with airdrops as a gimmick. It is also a "witch attack" tacitly approved by the project team, using airdrop expectations to keep users loyal.

·Implicit points system: Represented by Connext, Arbitrum, etc., users do not know whether there is an airdrop before interactive projects. The implicit points system will add points for relatively unpopular interactive links or give multipliers to interactive behaviors that meet specific conditions. , and points will be deducted for some suspected robot behaviors of users.

As tiered airdrops become more and more popular, the gap between the airdrop with the smallest share and the airdrop with the largest share is sometimes more than 10 times. If users want to get the largest share of airdrops, they need to work harder in addition to choosing the right direction. Therefore, in the airdrop community, there is a saying of striving for the largest share of airdrops, "premium accounts". This kind of address is generally used in the same track and the same type of project airdrop conditions, as well as various random interaction footprints on multiple chains to imitate real users. The project's research predicts the airdrop conditions, and spends the interaction time and money that just meets the "full match" airdrop to pretend to be deeply involved users.

But whether it is to increase the threshold for obtaining rewards or to use stricter sybil review, it will ultimately damage the original potential benefits of real users.

(The harder you work, the luckier you get: Arbitrum widens the reward gap between light participants and those who make major ecological contributions)

**The airdrop track has become a red sea? **

Airdrops have attracted the attention of Web3 users in third-world countries with relatively average economies. Driven by the purchasing power of the dollar, low-cost, high-odds returns, and the benefits of multiple addresses and multiple benefits, most airdrop studios were born in these non-developed countries. After experiencing the baptism of many major airdrops, Lumao Studio not only has better cash flow to expand the scale of interaction, but also is gradually becoming more professional, with random interaction scripts, decentralized and independent IP addresses, stricter avoidance of wallet associations, etc. Counter-anti-witch censorship tactics abound.

(According to Googletrends, airdrop keyword searches are concentrated in low- and middle-income developing countries)

Although some studios have gone bankrupt due to cash flow and airdrop cycle problems, most mature studios have transferred risks through proxy games, selling tools, etc., maintaining thousands of interactive addresses. The huge number of addresses has put a lot of pressure on project parties. In order to deal with too many wooly parties, some project parties have directly set entry barriers, such as Lens Protocol. Most projects have chosen to raise the airdrop threshold as a countermeasure, which has promoted the airdrop track." Active witches, zombie users".

In addition, after the release of the Arbitrum airdrop, single-user multiple addresses have become a daily routine. At the same time, the airdrop circle is deriving a set of industrial chains. There are KOLs who write airdrop tutorials, providing identity verifiers, IP isolation and automation for sybil attackers. Script tool suppliers, anti-witch agencies, and even hackers who target mao users all reflect the status quo of the airdrop track becoming mature.

(The marginal benefit of the airdrop is reduced. Source @0xNingNing)

In general, the airdrop track is a "gamble" with good odds in the early stages for users who are risk-averse and expect high returns. As the involution of airdrops intensifies, it is certain that the expected returns will decrease. If users regard airdrops that sacrifice capital liquidity and have an uncertain return cycle as investments, then under the risk of backlash, witches, and sharp declines in returns, the final return may not be as good as regular spot investment during a bear market. From obtaining high returns at a small cost in the past to "arbitrage" that requires a certain cost, the history of airdrops is also an abbreviation for the history of changes in the cryptocurrency primary market.

In the history of cryptocurrencies, the creation of 100x coins such as Coinlist and the gold mining model of Gamefi life cycle.