Kill Airdrops: Why Claims are the Way Forward for Incentivizing Crypto Actions

Airdrops in the cryptocurrency space are problematic due to airdrop-farming and their costliness, and proposes that claims are a better solution for incentivizing user actions and token distribution.

February 16, 2023

Airdrops have become a popular way for blockchain protocols to distribute tokens to their users. However, they come with two major problems that need to be addressed. The first is airdrop-farming, where people run bots to perform rote actions that clog blockchains and mine and dump rewards. The second is the massive cost of airdrops in terms of gas fees and blockspace.

The solution to these problems is claims. Instead of airdropping tokens to users who may never use them or dump them, protocols can have users claim them when they perform valuable work. This approach incentivizes users upfront to perform actions that allow them to claim tokens, while ensuring that these actions cannot be botted.

Claims are not a new idea. Protocols have tried to solve airdrop-farming with retroactive airdrops based on mysterious metrics, but this is a terrible solution. It means that protocols cannot incentivize meaningful action from valuable users, and they end up rewarding the best bots.

To solve airdrop-farming, we need to reward users for original, qualifiable contributions valued by a community. We need to let users know in advance how to win rewards, and we need to let them claim rewards when they win attestations from a community as to the value of their work. This is the way forward.

For example, at JokeDAO, we are running an on-chain hackathon where users can claim rewards by getting attestations from a jury as to the value of their work. This approach puts the cost of gas and blockspace on the user rather than the protocol. On mainnet Ethereum, this was prohibitively expensive for most users, but on Layer 2s, it is only one or two cents. This means that only active participants go home with the rewards.

Ultimately, we need to kill airdrops and replace them with claims. Airdrops are a relic of a monolithic era when protocols used a prohibitively expensive chain to avoid incurring costs to users. Those days are over, and those paradigms are dead. In the era of Layer 2s and app-chains, claims are the way forward.

In conclusion, if we want to solve the airdrop problem, we need to focus on claims. Claims allow us to incentivize users to perform valuable work, and they ensure that these actions cannot be botted. They also put the cost of gas and blockspace on the user rather than the protocol. By killing airdrops and replacing them with claims, we can create a fairer and more sustainable token distribution model for the blockchain ecosystem.

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inspired by: david phelps tweetstorm