A new model of Airdropping: Optimistic Ethereum

By bengy | Idle Musings | 27 Apr 2022


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For anyone who has been in crypto for a while, airdrops are a bit of a necessary evil. Initially, they were seen as a way to incentivise and bootstrap a community... and as people soon found out, human nature is what it is, and the "community" came out in vast numbers to get their free money and would then cash out and leave... if the founders were lucky, then they would have given themselves a nice fat allocation to dump on the "community" as well! Sorry... fund development

Anyway, it became quite clear that the ICO-era airdrops were pretty shitty at best.. and hte tokens weren't worth much, and it all ended up being flash in the pan marketing stunts for a project's two seconds of fame and crushing sybil attacks.

However, it did give rise to a new breed of crypto entrepreneur: the airdrop chaser. Of course, we all did a bit of it... but at some point, it became apparent that you were just giving out too much information for very little in the way of crypto rewards (dodgy tokens that were essentially worthless if you looked at the whitepaper.)

Fast forward to the Uniswap airdrop... and we had the retroactive airdrops. Well, these were a vast improvement on the previous era of airdrops... retroactively rewarding past users of the Uniswap protocol, and at the time, it was a huge thing to do! Many people rejoiced in suddenly receiving a huge windfall from just using and experimenting with DeFi in the early days. However, the better distribution rules meant that we now had a new breed of airdrop chaser... the airdrop farmer. Essentially people who would "test" every protocol and chain under the Sun with as many accounts as possible in order to maximise the proportion of a airdrop that they could capture. Crypto started to realise that the problem wasn't only the system... it was also the fact that humans interacted with systems, and that there exist shitty humans.

More to the point, people wouldn't do more than the bare minimum that they thought was required to capture an airdrop, and then they would move on to the next protocol. After all, there was no more reward on offer after the initial interaction! A brief reading of some psychological papers would have told crypto founders that that would be the case... but the tech and crypto world can be a world of echo-chambers of very sure opinions across a wide variety of topics of expertise!

 

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Fast forward to today, when Optimistic Ethereum (a L2 of Ethereum) announced their plan for their OP token airdrop. And we have a new and evolving model of iterating the rules and having multiple rounds of the airdrop.

From the beginning, Optimistic Ethereum has been one of the less flashy L2s, despite the fact that it was one of the earliest ones. It has built slowly and steadily... unlike many of its competitor sidechains and L2s of Ethereum.

One of the things that I have liked about the Optimistic Ethereum team is its thoughtful approach to how to build out a working ecosystem on its chain. From the beginning, they realised that a completely capitalistic market-decides-all model wouldn't work... the problem of the commons.... and they have tried to introduce incentives to try and help public funding of common infrastructure and goods on the chain.

For instance, retroactive funding rounds are quite common on the chain and on their dApps. The idea is that the funding for a particular protocol/project/job is given AFTER the job has launched and is working. The idea is that people and projects that contribute to common good are rewarded... and not those who are just chasing the rewards.

There is an interesting way of structuring the governance, with the token holders forming half of the governing body... with a rotating NFT-holder group that will be the second part. This helps implement some sorely needed checks and balances... something that a purely market-based token holder model doesn't achieve, as it tends towards plutocracy.

 

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The first airdrop round will reward the earliest users of the L2. The snapshot date being way back in June 2021. These are the very first experimenters of the L2 technology... when L2s weren't a thing, and the best thing that we had for scaling was sidechains like Polygon. These are going to be the people who believed in Optimistic Ethereum from the start... and many users of Synthetix will be part of this cohort, as we were all encouraged to move over to escape the crippling ETH main-net fees.

Repeat users and active governance users are also those who are prized users... and less likely to be just airdrop farmers. As are active donors... those are definitely a class of users who align with the public goods idea.

 

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Of course, with every drop... there will be the annoying fact that there will be some humans that will game the system.

Now, the critical thing with this particular airdrop is the fact that they are only distributing 5% of the total supply from the 14% that was set aside for airdrops in the 1st round. That means that there is still an incentive for those who missed out on the first round. This is part of the evolution of the retroactive airdrop... previously, if you missed out, then there would be little reason to use the protocol. However, with this... previous users and current and future users will all be incentivised to try things out.

Of course, the rules for future airdrops are not out... but that shouldn't be the thing that guides you. Bridge over, try stuff out... remember, we are early, and we are experimenters. Be in it for the tech, and be happy if you get lucky as well!

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bengy
bengy

I am a Musician (Violinist/Violist) specialising in Early Music living in The Netherlands. I have a background in Mathematics and Physics due to an earlier tertiary level study... and so, I'm still quite interested in Science and Technology related stuff!


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