Where is the Future of Airdrops?
If there are still newcomers entering the industry, then airdrops are likely their first stop. From pure profit-seeking to the complex interplay between project parties and users, airdrops have gradually become a source of both love and hate.
For users, the love comes from the substantial rewards that successful airdrops bring, while the hate stems from complicated rules, tedious tasks, and even opaque distribution mechanisms. For projects, the love lies in the short-term traffic and attention that airdrops can still attract, but the rampant abuse and declining community trust have become significant headaches.
People change. After experiencing multiple cycles of bull and bear markets, cryptocurrency users still have expectations for “free lunches,” but their behaviors have become more rational. Project teams are gradually realizing that simple airdrops can no longer meet the needs of community building, prompting them to explore more complex and transparent distribution mechanisms.
For example, Hyperliquid’s airdrop has been highly praised for rewarding early users, while Redstone’s airdrop sparked strong community backlash due to abrupt changes in distribution ratios. Now that we are in 2025, can airdrops still play their role?
Recently, Binance Research released a report titled “Where Are Our Airdrops Going?”, providing us with an in-depth perspective. By analyzing the current state, problems, and improvement directions of airdrops, it may offer better solutions for project teams and users. Deep Tide TechFlow has organized and summarized the core content of this report, with the main points outlined below.
Key Points
Despite the many shortcomings of airdrop models, their significance in the industry cannot be ignored.
Two popular categories of airdrops:
- Retroactive Airdrops: Primarily reward existing users by distributing tokens based on their historical behavior, aiming to enhance community loyalty.
- Engagement Airdrops: Attract new users and increase project exposure by notifying users in advance and setting task incentives. This is more suitable for early projects to capture market share and build an initial user base.
Areas for improvement:
- Clear distribution rules and standards can help reduce user dissatisfaction and misunderstandings.
- Project teams need to listen more to the voices of the community.
- Avoid excessive resource allocation to internal teams or large holders to protect the interests of ordinary users.
- The introduction of on-chain monitoring tools and “Proof-of-Humanity” technology is expected to reduce airdrop abuse, making airdrops fairer and more efficient.
Through these core points, the report provides us with a clear framework to understand the current state of airdrops and possible future developments.
From Simple Distribution to Complex Games
Since the first airdrop event in 2014, airdrops have had a 10-year history in the industry. The first notable airdrop was Auroracoin in 2014, aimed at promoting the national cryptocurrency to Icelandic residents. At that time, users only needed to enter their permanent resident ID on the Auroracoin website to receive tokens.
In contrast, Hyperliquid’s HYPE airdrop (November 2024) may be one of the largest and most highly rated airdrops to date, further solidifying airdrops as a powerful user engagement tool. With a peak valuation exceeding $10 billion, the HYPE token airdrop surpassed Uniswap, becoming the largest airdrop by peak price.
However, to combat the increase in witch attacks, project teams have raised the complexity of obtaining airdrop eligibility. Unlike early airdrops, current airdrops typically require users to complete multiple tasks, such as using testnets, participating in social media activities, engaging in governance, downloading mobile applications, and transferring funds across chains. These necessary operations often directly benefit the project, for example, by increasing on-chain revenue/activity or enhancing social media exposure.
The current airdrops can be divided into two categories:
Type 1: Retroactive Airdrops
Some earlier airdrops, such as those from Auroracoin, Uniswap, and StarkNet, did not disclose any relevant information before distributing the airdrop; their aim was to reward existing community users and enhance their loyalty.
- More user-centric
- Typically executed by protocols that already possess a large user base and market share.
- No need to rely on airdrops to initiate an initial user base.
- Applicable scenarios: Mature protocols, used to reward existing users and consolidate community relationships.
Type 2: Engagement Airdrops
These incentivize users to participate in specific activities by notifying them of upcoming token generation events.
- More project-centric.
- Mainly used to attract new users and help projects gain initial market share.
- Often incentivizes user behavior through point programs.
- Typical cases: Redstone, Kaito, and Hyperliquid.
- Applicable scenarios: Emerging projects that need to maintain competitiveness against rival protocols (which may also use token incentive mechanisms).
Recent Sentiment Analysis of Token Airdrops
To better understand recent developments in airdrops, this report also utilized Grok AI to conduct a brief sentiment analysis of several significant airdrops over the past year, scoring them accordingly.
Sources for sentiment analysis: Posts on X, including but not limited to community feedback, the ratio of positive to negative comments, interaction levels, and specific criticisms or praises.
Grok also reviewed official announcements, tokenomics, and airdrop eligibility standards in online articles. Sentiment was categorized as positive, negative, or mixed based on the dominant reactions.
Below is the original table from the report, translated using AI; some wording may be ambiguous. However, the scoring values in the original table reflect the community’s different views on various airdrops, with higher scores indicating more positive sentiment.
Lessons Learned from Past Airdrops
Last-Minute Reduction in Distribution Ratios
Some crypto projects initially promised to allocate a certain percentage of tokens to the community but later reduced this ratio, reallocating tokens to insiders or project treasuries. Recently, the Redstone airdrop faced strong community backlash after the team reduced the community allocation ratio from 9.5% to 5% just before the token distribution date. Many community members felt this action was unfair.
Lessons Learned:
- Clearly communicate token allocation ratios in advance: Clearly convey the token distribution plan before the token generation event (TGE).
- Avoid last-minute changes: Try not to make last-minute adjustments to allocations.
- Negotiate with stakeholders if necessary: If changes to allocation ratios are indeed needed, avoid unilateral decisions. Discussions should occur with key stakeholders (such as investors, the community, and exchanges) to ensure thorough communication.
Opaque Eligibility Standards and Mismatched Expectations
Some projects conveyed unclear standards regarding airdrop eligibility, resulting in uneven reward distribution that failed to accurately reflect users’ actual activities. The Scroll airdrop in October 2024 (distributing 7% of its total SCR token supply, or 70 million tokens) faced criticism due to its arbitrary snapshot mechanism and hidden rules.
Lessons Learned:
- Clearly communicate distribution rules: Ensure rules are transparent to avoid requiring users to guess too much, as this often leads to mismatched expectations.
- Prevent witch attacks: Consider using on-chain monitoring tools or “Proof-of-Humanity” tools to reduce abuse.
Overweight Distribution to Insiders and KOLs
Many projects allocate a larger proportion of tokens to teams, investors, and venture capitalists (VCs), leaving a smaller portion for the community. For example, KAITO allocated 43.3% of tokens to teams and investors in its February 2025 airdrop, while only 10% was allocated to the community, sparking public debate on the X platform.
Some projects allocate large amounts of tokens to influencers, who may choose to sell immediately, diluting token value and harming the interests of genuine users. Reports indicate that KAITO faced controversy for allocating substantial tokens to influencers, who sold them shortly after the token generation event (TGE), impacting token prices and undermining community trust.
Lessons Learned:
- Be cautious with allocation ratios: Learn from the token allocation outcomes of similar-sized or natured projects, focusing on market reactions to allocation schemes.
- Implement vesting periods and lock-up mechanisms: Applying vesting periods and token lock-ups for insiders and influencers can reduce early sell-off pressure post-TGE and better align their interests with the project’s long-term goals.
Technical Barriers in the Claim Process
Complex or flawed claim processes can hinder users from retrieving tokens, effectively reducing the payout amounts and significantly undermining the intended purpose of the airdrop claim process. For instance, the Magic Eden airdrop in December 2024 aimed to promote its mobile wallet app but reportedly experienced user frustration rather than anticipation due to feedback about bugs and unclear instructions on the X platform.
Lessons Learned:
- Airdrop claims are a crucial first touchpoint for many potential users. Ensure the process is smooth and convenient to improve user retention chances.
How Can Airdrops Improve?
Increase Transparency
- Set clear objectives: Project teams need to establish clear goals for airdrops or token incentive programs and ensure these goals align with the project’s long-term vision.
- Clearly communicate goals: Through clear communication, align community actions with project goals and vision, reducing dissatisfaction arising from inconsistent behavior weight distribution.
Enhance Community Engagement
- The community is the core competitiveness of the project: Technology and products can iterate quickly, but community building requires time and patience. The long-term success of a project relies on a solid and loyal community.
- Balance transparency and engagement: Transparency is fundamental, but it is not enough. Project teams need to engage the community more deeply in project development through interactive feedback mechanisms, thereby enhancing a sense of belonging and loyalty.
- Challenges brought by user mobility: The open nature of the cryptocurrency industry lowers the switching costs for users, so projects must retain users through stronger community stickiness and sense of belonging.
Increase Monitoring Mechanisms
- Some projects (like LayerZero) have collaborated with on-chain analytics companies (like Nansen) to identify and disqualify airdrop eligibility for “witch attack” perpetrators through on-chain data analysis.
- With technological advancements, on-chain monitoring tools will become more sophisticated and widely used, making it easier for project teams to detect and eliminate bad behavior.
- “Proof-of-Humanity” tools are expected to help prevent airdrop abuse in the future while protecting users’ anonymity and privacy. Such tools may become key means to address the “gamification” issues of airdrops.
This article has been collaboratively reproduced from: Deep Tide