[TL;DR]:

Recently, many large projects such as LayerZero, zkSync, Blast, etc. have sparked community controversy with their airdrops, and the token price has plummeted all the way after listing, not being accepted by the market.

Unable to meet the interests of most participants but making the airdrop rules unfair, which instead fuels large-scale sell-offs, putting both primary and secondary participants and even the project party in a lose-lose situation.

Since this year, there has been more emphasis on the fair distribution of MEME, which is a market response to the correction of airdrop errors.

Introduction

12,000 addresses have not interacted but have received zkSync airdrops, LayerZero airdrops hunting witches and mandatory donations, Blast airdrops betraying large investors, and recent airdrops of many top projects have caused community controversy, and the coin price has plummeted after listing, not recognized by the market.

In the context of limited liquidity, are these leading projects still worth the market's attention? Is the era of airdrops coming to an end? What pitfalls should participants pay attention to in the later stage? Let's explore together.

LayerZero: The most stingy airdrop in history

Recently, a series of head projects, jokingly referred to as old-school PUA by the community, have released airdrops and launched tokens, but their performance has been unsatisfactory for the community.

First, the cross-chain project LayerZero announced the airdrop plan on May 3rd, and launched a one-month witch-hunt operation. The review mechanism is divided into three stages: self-exposure, official review, and bounty reporting. In particular, the bounty reporting mechanism has triggered widespread controversy in the market. This mechanism encourages users to report potential witch behavior, and the reporters can receive 10% of the airdrop share of the reported person, leading to a wave of reporting in the market, including small studios being mistakenly affected, security companies actively participating, and frequent occurrences of rumor reporting.

LayerZero successfully identified and processed a large number of potential witch addresses through this action, ultimately determining that more than 800,000 addresses are potential witches, with 338,000 addresses self-exposed.

Figure 1 Source: @PrimordialAA

However, this move has also sparked controversy in the community over the rationality and necessity of the reporting mechanism. Some users believe that the project party has ignored the contributors who have made positive contributions.

zkSync: Airdrop questioned for its lack of transparency and fairness

If LayerZero can be called the most stingy Airdrop, then zkSync has multiple known witch addresses on its Airdrop list, which has also been widely criticized.

On June 11th, ZK Nation, the project team of zkSync, one of the four major L2 public chains, announced the economic model and airdrop rules of the ZK token. It was announced that 17.5% of the total supply will be used for airdrops, divided into two categories: users (89%) and contributors (11%). Users need to meet a series of transaction or interaction conditions, while contributors qualify based on their active contributions to the zkSync ecosystem.

However, zkSync was subsequently embroiled in a series of controversies. Firstly, there were allegations that 12,000 zero-activity addresses also received the airdrop, raising questions about the fairness of qualification audits.

Well-known KOL Crypp has published a long article raising three major doubts, including abnormal fluctuations in TVL, eligibility for airdrops for wallets with no transactions, and the centralization of airdropped tokens, implying that there may be improper operations during the airdrop process.

Figure 2 Source: @cryppinfluence

In addition, 'Witch Hunter' Artemis pointed out that there are suspected rat trading addresses in the airdrop list, which are created and deposited through specific patterns, and are suspected of using script operations to obtain a large number of tokens. These addresses highly overlap with the witch list reported by the cross-chain platform LayerZero, which further exacerbates the community's concerns about fairness.

What's even more surprising is that many eligible users did not receive the airdrop, while some addresses received a far larger amount of tokens than usual, which further intensified the controversy.

Blast: Points-based PUA, Large Investors Encounter Cold

Blast, a Layer 2 public chain that focuses on native revenue, has recently launched an Airdrop. Compared to LayerZero and zkSync, it pays more attention to rules, but its Airdrop effect is still unsatisfactory.

The main controversies of the participants are mainly focused on three aspects. First, the scoring rules of Blast's gameplay are opaque and frequently modified, leading to serious PUA for users. Secondly, the token acquisition process is cumbersome, and users need to watch long videos and download the app to complete multiple tasks. Finally, the addresses of the top 1% of participants face a linear unlocking period of up to 6 months for the tokens.

Figure 3 Source: blast.io

Despite controversy, compared to other recent projects, Blast has relatively fewer negative reviews within the community, indicating that its airdrop mechanism has made some efforts in balancing the interests of large funds and retail investors. However, the price performance is also unsatisfactory.

Airdrop controversy, coin price slump, how will the market pay the bill

In fact, the recent airdrop effects of large projects such as zkSync (ZK), LayerZero (ZRO), Blast (BLAST) have been unsatisfactory, which is not only due to the market's tight liquidity, but rather because they cannot meet the interests of the majority of participants while making the airdrop rules unfair and unjust, which has fueled large-scale selling. As a result, both secondary market participants and project parties have ended up in a lose-lose situation.

In fact, when we review airdrops, it is filled with complex and subtle interdependence and confrontation between project parties and airdrop hunters. From the initial attempt of Auroracoin, to the DeFi frenzy triggered by Uniswap, the airdrop strategy has gradually evolved from simply joining the community to a high-threshold model of deep interaction, witch screening, and even fund blending verification.

In fact, the survival dilemma of Web3 projects currently lies in the scarcity of effective demand and the lack of early users, and airdrops have therefore become a key tool for quickly attracting new users and activating the market. However, this strategy has also spawned a specialized and scaled fur industry chain, and what these participants who aim to obtain high airdrops bring is more rich interaction data and token sales pressure. LayerZero's aggressive witch hunting bounty mechanism is an extreme manifestation of this trend. Despite the continuous controversy, in the long run, its model may still be borrowed by large-scale projects.

Similar to the subsidy war in the Web2 era, the essence of airdrop is a project subsidy after user participation, but whether the project can survive ultimately depends on its self-generating ability. It can be foreseen that with the increase of the airdrop threshold and the rise of the points system, the traditional interactive opportunities of Damao become increasingly scarce, and the cognitive gap between users and project parties is widening.

Of course, the current market downturn and insufficient liquidity, the arrogance of the project party and the misalignment of user expectations, further exacerbate the negative effects of airdrops. Since this year, the emphasis on the fair MEME without a master has risen, which is a market's reactive manifestation of correcting airdrop errors.

Figure 4 Source: MarketVector

In summary, as an important means of quickly attracting new users and activating popularity, airdrops have evolved with the market environment. The recent controversies surrounding airdrops of several large-scale projects have revealed the technical difficulties of airdrop distribution and the human challenges faced by project parties. It also indicates that only core projects that seek genuine demand are the key to sustainable development in the industry.

Author: Carl Y.

This article represents only the author's point of view and does not constitute any trading advice.

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