I’ve written extensively about airdrops over the past few years but as it’s an ever evolving dynamic system it can be confusing for someone just getting started. This is another guide to demystify some of that.

Airdrops are a weird sort-of animal. General common sense & economics dictates that cash flows from the customer towards goods & service providers. The idea that it would reverse midstream seems preposterous. Yet it happens consistently in the world of Web3/DeFi/NFTs. There are a variety of reasons for this but chief among those is crypto culture itself. The ethos of a democratic, decentralized, open, & fair system for everyone are threads that carry through nearly every part of the system. Most dapps/protocols/platforms in this space understand that without the users they would’ve never succeeded. So when the time comes to decentralize ownership they show that appreciation by giving part of that ownership to those who used & believed in them early. Imagine, for a moment, if when Google did their IPO they gifted shares to everyone that had ever used the search up to that date. Airdrops are somewhat like that. This is the culture most of us want to keep in the space. What qualifies an airdrop as an “airdrop” is vague but the usual consensus is that, aside from being a user, an airdrop requires no action from you to claim, except maybe the claim transaction. If you have to retweet, invite, or otherwise promote or advertise to claim, it’s a ‘bounty’ or ‘contest’ but not an airdrop.

Unfortunately, with the exception of the initial Uniswap V2 airdrop, there is evermore a financial incentive to cheat this system. This is typically done through the “Sybil” method of using many wallets across a given platform to qualify for a speculative future airdrop. I’m not talking about you using a leger & possibly one or two other hot wallets. I’m talking about much much larger scales. People build bots to do this on increasingly larger scales. This can do many harmful things to the token. Things like tank the initial price or centralize a large portion of ownership. To combat this potential airdrops are getting extremely creative with what qualifies a given wallet. It’s a constant battle between sybiloors & airdropoors.

What can qualify you for a potential airdrop? It varies but being a real “user” of a protocol or dapp is a tried & true method of success. I didn’t start using Uniswap V1, Cowswap, Optimism, or Hop because of airdrop speculation, rather I found them to be extremely useful financial tools. As Sybil users are filtered through volume limits, recent activity, or time of last use, if you come with pure intentions you will inevitably find some success.

As qualifiers get more restrictive sybiloors get more creative. This certainly doesn’t seem like a sustainable system but ultimately only time will tell. It’s interesting to watch unfold & the current culture seems to dictate that we have to try. There may be some undiscovered formula that will give the desired results.

Inevitably, when an airdrop is announced & qualifiers are revealed, people complain. This is a personal pet peeve of mine. First of all, nobody promised anyone anything. I hate to hear people bitch when they don’t get something they were never assured anyhow. Usually these are people who were trying to sybil attack & are being sore losers when they get beat. Even assuming they are real users, NOBODY MADE ANY PROMISES TO ANYONE. Complaining just makes them sound entitled & rarely helps their cause. Please don’t. Very few hit every airdrop. Don’t sweat missing one or many. I personally missed dydx, indexcoop, & both 1inch drops. Getting airdrops is highly speculative, OFC there is bound to be some downside.

If/when you get your first airdrop what is it you are actually given? Usually (there are exceptions) you receive ‘Governance’ tokens over a Decentralized Autonomous Organization (DAO). This gives you voting power over DAO decisions. Typically at a 1 token = 1 vote rate. As long as you hold those tokens you will have voting power. Whether or not an initial liquidity pool is established by the DAO, usually there’s eventually one funded by someone & the token goes through a (sometimes volatile) price discovery process. Votes are valuable. If you want to sell your votes (tokens) that is your prerogative. If you have even an elementary understanding of the stock market a lot of this should translate fairly easily.

Usually when you sign-in with your wallet to a given protocol there will be some sort of notification. It helps to follow official social channels as well. You can also check your ETH or cosmos address on earni.fi. Unclaimed airdrops usually show up there.

It’s difficult to know who may airdrop in the future. When & how are even more speculative. There are a lot of pitfalls & you will likely be excluded from an airdrop or two. Learning what to look for & what to use is hard to navigate, sometimes even for OGs. We go through discord servers, Twitter profiles, & search protocol docs for key words like “decentralize” or “DAO”. It takes years & lots of practice to learn to hunt airdrops. The best method is to listen & learn from the right people. Follow different DEXs, Aggregators, & DeFi protocols on Twitter. When you see phrases like “If I were you I’d be using ____”, pay attention. A few tips to get started in the right direction. Get familiar with the ‘Airdrop’ community on gm.xyz.

Also, I were you I’d be following the following people on Twitter:

• @defi_airdrops

• @OlimpioCrypto

Absorb every bit of knowledge those & others put out. Listen to their potential strategies. Read their threads. Learn, observe, & try out some of what they talk about & see what results you get. A few more that you also should follow:

• @DawsonBotsford

• @earni_fi

• @BanklessHQ