The History of Airdrop Competition: A "Cat and Mouse Game" Between Project Parties and Profit Seekers

Author: Nianqing, ChainCatcher

A month ago, the Arbitrum Foundation officially announced the airdrop information.

Although many opportunists fell victim to Arbitrum's "intense" airdrop rules, it cannot be denied that this is yet another grand wealth creation movement in the crypto world. Legendary stories of "creating thousands of accounts," "gaining hundreds of thousands of tokens," and "achieving freedom overnight" are once again widely circulated.

Enthusiasm has spilled over to projects like Starknet, which have great potential for token issuance. According to 0xScope's Twitter, after Arbitrum announced the airdrop, other projects with potential airdrops have seen a surge in daily active users, with zkSync and StarkNet showing the most significant growth, with daily active users increasing by about ten times.

Netizens joked that zkSync Era interactions have become so intense that "retirees are entering the market with their pensions." Many professional airdrop studios have also launched specialized "guidance" and training classes for zkSync airdrops.

Since the airdrop feast initiated by Uniswap in September 2020, less than three years have passed, and the form, nature, and scale of airdrops have undergone tremendous changes. Airdrops are no longer merely a chain-based carnival; the stakeholders involved have gradually included market makers, centralized exchanges, wallets, etc. Consequently, scenes such as exchanges rushing in, large holders dumping, gas wars, and project websites crashing have begun to occur frequently.

However, both project parties and opportunists are continuously upgrading their offensive and defensive tactics in this cat-and-mouse game, gradually evolving into a strange relationship of mutual confrontation yet mutual dependence.

I. A Brief History of Airdrop Competition

The first airdrop in crypto history can be traced back to 2014, when a programmer named Baldur Friggjar Odinsson invented "Icelandic Bitcoin" AuroraCoin and airdropped 31.8 tokens to each of Iceland's 330,000 citizens. Although there have been multiple airdrops since then, their impact was limited. It wasn't until the wealth effect brought by Uniswap's UNI airdrop that people's enthusiasm for airdrops was reignited.

If we consider Uniswap as the starting point of the Web3 airdrop feast, the development of airdrops can roughly be divided into the following stages (types):

1. Interaction Before Snapshot: In the early days of airdrops, users only needed to interact at least once during a certain period before the snapshot to qualify for the airdrop, such as the airdrops from Uniswap, 1inch, etc. Among them, Uniswap airdropped 15% of its tokens to over 250,000 users, and anyone who had used Uniswap before September 1, 2020, could receive at least 400 UNI, which was worth about $800 at the time.

2. Filtering Addresses Based on Few Conditions: After experiencing the profit stimulus of the first stage, the "opportunist" group continued to grow, and project parties began to impose various restrictions on airdrop eligibility, such as having interaction history in different months or interaction amounts exceeding 100 USDT. At this time, due to the rising market conditions, the average airdrop value from project parties also increased significantly, with projects like Ampleforth and Tornado.Cash having average airdrop values around $5,000, and [Ribbon Finance](https://www.rootdata.com/zh/Projects/detail/Ribbon Finance?k=OTY5) even reaching an average airdrop value of 60,000 USD.

3. "Hardcore" Interaction Requirements like Node Setup: Recently, many projects have begun to raise the interaction threshold for testnet users, especially for public chain projects that are "certain to issue tokens," such as Aptos, Aleo, and Iron Fish, where users often need to purchase cloud servers. Taking Aptos, which has already conducted an airdrop, as an example, users need to participate in node testing, which requires purchasing overseas servers and configuring the environment, necessitating a certain level of Linux knowledge. For users, this type of interaction has a high threshold and cost.

4. Points-Based Airdrops: Points systems incentivize users based on the principle of "more work, more rewards." For example, the airdrop rules of the NFT market Blur not only award points based on the number of new users, transaction volume, and transaction amounts but also ensure user retention and loyalty through multiple airdrops and phased airdrops. With clear and transparent incentives, the resulting network effects are naturally substantial.

In fact, Arbitrum is also a "top student" in points-based airdrops. This time, Arbitrum's airdrop comprehensively considered various factors, including time span, interaction amount, interaction frequency, and interaction count, to implement a tiered airdrop for users, which not only includes bonus items but also deducts points based on anti-witch rules. While incentivizing large traders, it also takes into account some low-cost users.

Arbitrum airdrop-related data, with a small number of addresses still unclaimed, source: Dune

5. Community Reporting Witch Hunts: In addition to filtering and detecting witches through specific rules, some project parties also collaborate to identify more witch addresses by initiating airdrop hunter and witch reporting activities within the community. Previously, Hop, Optimism, and Safe have all launched witch reporting campaigns. For example, in last year's Optimism airdrop, through official investigations and community reports, 17,000 witch addresses were identified, with a witch rate of about 7%.

However, similar community challenges have also sparked significant controversy. For instance, during last year's Safe airdrop, it was stipulated that users who successfully reported airdrop hunters could receive 25% of the reported user's SAFE, while the remaining 75% would be distributed to all other eligible participants. Airdrop hunters who voluntarily confessed before being reported by others could retain 25%. Under strong incentives, nearly a quarter of the 43,058 addresses initially eligible for the airdrop were identified as witch attackers and disqualified from this airdrop plan. Due to the broad sweep, the project party was criticized for not adhering to the "Web3 spirit" and "lacking vision." As a result, few project parties have since adopted similar anti-witch measures.

6. KYC, Soulbound Tokens (SBT), and Other Identity Verification: One of the important use cases for SBTs is indeed anti-witch measures, but they have not yet been widely used by project parties for airdrop detection for two reasons: first, the SBT infrastructure is still not fully developed, and second, during the early stages of Web3's development, it is still necessary to leverage the network effects brought by "opportunists."

Moreover, like KYC, using SBTs for airdrop detection of witches still faces considerable controversy. Last September, Binance launched the soulbound token BAB, which grants holders access to 14 potential airdrops. However, many criticized this as "exchanging benefits for souls," using some "opportunism and airdrops" to obtain a user's personal information, a method that is even cheaper than in Web2.

The privacy-focused public chain [Iron Fish](https://www.rootdata.com/zh/Projects/detail/Iron Fish?k=MTgwNw==), which is about to release an airdrop, has also faced criticism for requiring KYC to receive test rewards. Iron Fish launched a website and sent emails to users to obtain incentives, which included verified emails and testnet points. After receiving notifications, users would go to the redemption portal and complete the KYC process. Each user is limited to redeeming the testnet reward tokens once.

In addition to the KYC process, Iron Fish will also conduct deduplication and approval processes internally. On March 9, the official team announced on Discord that 97,281 (57%) accounts had been banned, with 171,891 users receiving points, and it is expected that more accounts will fail KYC and be further filtered.

Iron Fish token economic model

Overall, the evolution of airdrops is closely tied to the history of anti-witch measures.

In the ongoing escalation of confrontations, more and more project parties and data analysis platforms have developed their own standards and methods for identifying witch addresses.

According to data platform X-Explore's analysis, since witch addresses are controlled by a single entity through multiple addresses, there is usually a consistent funding source transferring funds to these witch addresses for opportunistic behavior. Therefore, the consistency of funding sources is the most direct criterion for identifying witch addresses. Professional witches or "opportunists" may use scripts to control multiple addresses to interact with several potential airdrop projects, so the "similarity of transaction records" between addresses is another important indicator for judging witches.

Taking Arbitrum as an example, compared to other project parties, it has put considerable effort into airdrop design and has employed various methods. The anti-witch data analysis platform Trust Labs believes that Arbitrum has several commendable points in its anti-witch measures: 1) It utilized Nansen's address labels to specifically exclude CEX and Bridge addresses, reducing the chances of false positives; 2) Its core team, Offchain Labs, personally analyzed witch behavior using the Louvain Community Detection Algorithm based on funding networks; 3) It considered HOP's blacklist.

Using the Louvain Community Detection Algorithm for analysis based on funding networks and leveraging past project blacklists are currently common anti-witch strategies. Additionally, TrustScan also considers batch operations and similar behavior sequences as anti-witch measures.

Of course, even though Arbitrum has been very strict about witches compared to other projects, there are still many loopholes. According to X-Explore's estimates, the Arbitrum airdrop still contains about 150,000 witch addresses and at least 4,000 witch communities, and the project party has no way to identify the following witches: 1. Witch addresses that deposit and withdraw from exchanges; 2. Witch addresses that disperse funds through contracts; 3. Witch addresses that transfer funds using cross-chain bridges; 4. Witch addresses that only exhibit gathering behavior after the snapshot; 5. Detection of witch behavior only for addresses on ETH and Arbitrum, without considering witch detection results from other Layer 2 chains.

Despite the increasingly stringent airdrop conditions imposed by project parties and the gradual professionalization and refinement of anti-witch technologies, "opportunists" are also not backing down, continuously arming themselves in their confrontations with project parties.

II. Professionalization of "Opportunists": Studios and Distribution Models Maturing

The saying goes, "As the Dao rises a foot, the devil rises a foot higher," and the difficulty of opportunism has been upgraded with each large-scale airdrop. Retail investors are gradually facing risks of no profits or even being countered, and "opportunists" are also beginning to professionalize, with the emergence of numerous airdrop studios, training classes, and distribution models marking the gradual maturation of this niche industry.

Gas cost table for zkSync interactions circulating online

In response to project parties' anti-witch strategies, airdrop studios have also evolved different counter-strategies.

Qianxin is a "professional" who started during the Uniswap airdrop period. Sensing the trend of large-scale airdrops, he developed the habit of regularly monitoring projects and interactions. One principle he has always adhered to is to interact as an "early contributor" and perform manual operations; his airdrop strategy can almost be summarized as "no tricks, just hard work."

In the recent Arbitrum airdrop, about half of the 69 accounts he manually operated received the airdrop. In contrast, his recently established studio attempted group control and batch interactions within the Arbitrum ecosystem for the first time, but due to the high repetition of transfer amounts and interaction content, only 2 out of 1,300 addresses received the airdrop, while the others were "disqualified." Qianxin has also consistently advised the "opportunists" in his community to use fewer tools.

"When I interact with projects, I genuinely recognize this ecosystem and am even willing to play the role of an early contributor," Qianxin stated. The essence of airdrops is gas subsidies, but if the ecosystem develops well, there may not even be a need to rely on airdrops to cover costs. He has interacted with Arbitrum for two years, during which many addresses earned some money through interactions with well-developed projects like Magic and GMX, thus covering gas fees and other interaction costs.

Qianxin believes that airdrop studios and primary market investments are very similar. The process of choosing which project to interact with or "opportunize" requires industry knowledge, maintaining a high level of attention to project parties, and timely information capture, which is no different from what investment research institutions do.

In contrast to Qianxin's strategy, Haotian's airdrop studio "Puppet Master" has specifically assembled its own technical team to develop a more sophisticated airdrop tool.

According to Haotian, the team initially focused on investment research and primary and secondary market investments, but after the Luna crash last year, the market continued to decline, significantly impacting secondary market investments, forcing the team to consider how to survive better. A popular saying in the industry is, "Opportunize in a bear market, trade in a bull market." For small investment institutions and ordinary users, "opportunizing airdrops" may be a viable option. Thus, after thorough research, the team decided to establish a dedicated "opportunizing airdrop" department, which conducted in-depth comparative studies of past star projects and developed its own strategy based on that.

Group control software operation interface

In November last year, the team began to experiment with batch operations. Although they sought many tools to improve interaction efficiency, such as fingerprint browsers, group control software, and cloud servers, they found that there were no good products on the market that could fully meet the needs of "non-scientist opportunists." Therefore, based on existing tools, the team began developing an interaction system that could be operated without coding skills.

According to the "Puppet Master" team, in the recent Arbitrum airdrop, the studio had about a thousand addresses receive the airdrop, but because the system developed since November last year only began formal use recently, the timing was somewhat rushed; "otherwise, we could have had up to five thousand addresses receiving the airdrop." In terms of specific interaction behavior, the team conducted interactions with investment research objectives, requiring certain costs, time, and interaction frequency. Additionally, after receiving the Arbitrum airdrop, they did not rush to sell. The "Puppet Master team" stated that they had a very good experience with Arbitrum as a Layer 2 chain and hope to continue participating deeply in the ecosystem to find more opportunities.

When discussing the crypto market's evaluation of "opportunists," the "Puppet Master" team believes that airdrop studios are actually changing the investment landscape of the primary market. "Long ago, ordinary users had the chance to obtain high-quality tokens like Flow on Coinlist, but since large institutions entered the market, only top VCs like a16z and Sequoia can access early token shares of quality projects, while opportunizing airdrops allows ordinary users to obtain high-quality project tokens."

The "Puppet Master" team noted that the bear market that began last year seems somewhat different from previous situations, as not many users have left the space; instead, they have chosen to "opportunize" and interact with projects while waiting. In fact, opportunists can help quality project parties survive the bear market to a certain extent—Arbitrum previously announced a figure in February showing its on-chain protocol revenue was $780,000, indicating that those opportunizing are indeed real users, bringing actual revenue to project parties and supporting quality projects to continue their operations. Furthermore, the professionalization of opportunism will compel project parties to become more serious about product development, thereby promoting industry growth.

III. Redefining "Opportunists"

The crypto market seems to have changed its perception of "opportunists."

In the early days of airdrops, opportunists using numerous addresses for batch interactions were seen as speculators and disruptors. For project parties that are serious about their work, "hormonal liquidity" holds little appeal, as, in the long run, short-term attractive data does not bring value to project parties. Additionally, witches or witch communities manipulating volume can lead to token hoarding, affecting the fairness of token distribution.

Taking Aptos as an example, its final testnet phase data was astonishing—over 800 million transactions were completed in less than two weeks, achieving over 4,000 TPS. After the airdrop, the number of active addresses, transaction counts, and TPS for Aptos plummeted. According to Aptos explorer, the current average TPS on the Aptos chain is only 10.

Moreover, Aptos faced significant losses due to its failure to prevent witch attacks, resulting in a massive sell-off of Aptos tokens once they were listed.

Aptos daily active user changes, source: GenliData

Aptos overall transaction volume changes, source: GenliData

However, objectively speaking, the Aptos airdrop triggered an unprecedented wealth effect and out-of-the-box network effect, leading a large number of treasure seekers to flock to Web3, eagerly seeking the next opportunity for wealth.

But the demise of ICOs, the decline of IDOs, and VCs' monopoly on early project tokens seem to have endowed "opportunists" with a certain sense of justice and correctness akin to "heroes of Liangshan." Airdrops for early users have also seemingly become a "moral requirement" and "political correctness" in the market for many projects.

Crypto KOL @Huangdao once wrote on his social media: "The essence of opportunism is not about taking wool, but about acquiring the original shares of blockchain star startups." Element founder Wang Feng also stated on Twitter: "After nearly a year of observation, opportunism is increasingly becoming a quasi-primary market investment…"

Many insiders agree with such views, as only top VCs have the opportunity to obtain early token shares in star projects like Arbitrum and Aptos. If "opportunism" is regarded as an investment behavior, it is arguably much safer than ICOs.

From an ecological perspective, "opportunists" have become an important part of the development of the Web3 ecosystem. Novice users enter the Web3 field through airdrop expectations and obtain considerable returns, while project parties achieve their goal of educating users through testnet interaction tasks. Additionally, in the early stages of Web3 development, project parties indeed need a large number of "opportunists" to conduct pressure tests to better improve network performance. Furthermore, there are speculations that project parties can ensure the decentralization of token distribution through airdrops, rather than having it highly concentrated among teams and VCs, thus positioning themselves favorably in response to regulatory scrutiny.

Moreover, the current "opportunism" ecosystem has become a "collusion" among project parties, users, and VC institutions, with each party taking what it needs and ultimately extracting benefits from the secondary token market.

IV. The Ultimate Evolution of Airdrops

As the industry becomes more "competitive," the segmentation of tracks will become increasingly refined. With the emergence of professional airdrop studios, there will also be the emergence of professional anti-witch institutions.

Project parties indeed have the need to protect the interests of real users, fairly distribute tokens, and filter out opportunists to optimize products. Anti-witch measures can be considered a "delicate task," and project parties may not have sufficient technical means and time to eliminate witch accounts. Professional third parties not only have more comprehensive identification algorithms but can also assist project parties in designing more operational strategies.

Trust Labs is a studio specializing in anti-witch measures and has already collaborated with several public chains, DAOs, and DID projects. Its anti-witch applicable scenarios are not limited to airdrops but also apply to donation voting, marketing activities, and even user behavior analysis needs. Trust Labs believes that a healthy and sustainable Web3 community will gradually form a consensus on anti-witch measures, and in the future, anti-witch measures will become as essential for project parties as code audits.

X-Explorer believes that with the increasing number of "opportunists" and professional airdrop studios, as well as the entry of black and gray market teams from Web2, the automation capabilities of opportunism are becoming more refined. As the level of competition in the opportunism track intensifies, its profitability does not appear optimistic. Opportunism involves interacting with projects and testing various performance metrics, so it is more inclined to collaborate between professional airdrop studios and project parties to conduct large-scale stress tests on various performance issues of projects. Ultimately, this will create a "win-win" situation.

With the emergence of ChatGPT, Twitter has also been flooded with various tutorials on using AI tools to generate opportunism scripts, making the threshold for "opportunists" gradually lower. It is not hard to imagine that in the future, the behavior patterns of "opportunists" may become increasingly "elusive" and difficult to trace, with rising costs of counteraction. Under this premise, project parties will need the assistance of professional data analysis platforms even more.

In fact, the history of opportunism on the internet has a long-standing precedent. During the internet traffic wars, various incentives such as coupons, red envelope grabs, point exchanges, and VIP memberships led to the emergence of many gray industries, including挂机 (botting) software and studios.

In the gaming sector, high profits from game equipment have also led to the emergence of gold farming studios, which achieve large-scale simultaneous online characters through multiple devices, multi-opening tools, and cloud platforms, using key scripts or group control software to repeatedly farm in-game currency resources for profit. However, soon, various security and data companies introduced stricter detection tools and anti-botting software.

But will Web3 ultimately form a refined anti-witch industry like Web2?

In the early stages of industry development, the wealth effects triggered by airdrops and the ultimate ideal of decentralization have had a positive significance for many people entering Web3 projects, as there are still opportunities for treasure hunting and "wealth dreams," which is the greatest charm of Web3. Therefore, most project parties currently adhere to the philosophy of "clear waters have no fish," leaving a gap for this "dream."

In the internet industry, with the end of the traffic dividend cycle, the army of opportunists has largely retreated; will the Web3 industry follow a similar trajectory? It can be confirmed that airdrops, as a concrete manifestation of the "community co-construction/leadership" concept of Web3 projects, will exist in the industry for a long time, providing ample space for individual users aiming for Web3.

Although studio-style "opportunism" has reaped huge profits in the early stages, as the level of airdrop competition deepens and project parties upgrade their anti-witch measures, when the profits of studios can no longer cover the costs of thousands of accounts, studio-style "opportunism" may enter an unsustainable phase and gradually fade away.

Will StarkNet and zkSync be the last hurrah for opportunists?

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