What is AO's fair airdrop compared to other projects?

Original Title: “Airdrops vs AO's Fair Launch”

Author: Community Labs

Translation: Shenchao TechFlow

Cryptocurrency airdrops have become a popular way to distribute tokens and incentivize participation in new blockchain ecosystems.

By comparing recent major airdrops, we can identify potential issues and best practices. This article will analyze these airdrops and compare them with the unique fair launch of the AO token in the Arweave ecosystem.

Starknet

Starknet encountered some issues during the initial distribution of the STRK token, with many users claiming they were ineligible despite having made numerous transactions due to changes in airdrop eligibility. As of the snapshot on November 15, 2023, the eligibility requirement for the airdrop was to hold at least 0.005 ETH.

After the first airdrop on February 20, 2024, a large number of STRK token holders sold tokens worth millions, causing the price to drop by 60% from its peak. Since then, the token price has struggled to recover.

Jito

Jito adopted a tiered distribution method favoring smaller participants, airdropping 100 million JTO tokens to early users, subscribers, validators, and seekers. The airdrop distribution favoring smaller users is considered a fair decentralized governance approach that can promote community participation. However, some larger investors feel that their risk-reward is insufficient. There are concerns about potential Sybil attacks, but this has not been a major issue.

The choice of airdrop distribution can have significant impacts on decentralization, governance, and participation. Notably, requiring economic activity as a qualification standard can reduce spoofing attacks. A tiered distribution favoring smaller users can promote equality but may frustrate larger investors.

Arbitrum

On March 23, 2023, Arbitrum airdropped 116.2 million ARB tokens to over 625,000 eligible addresses and protocol DAOs as part of the transition to DAO governance. However, severe technical issues affected this airdrop, with high gas fees preventing many users from claiming their tokens.

This failed airdrop launch undermined community trust in Arbitrum. Users criticized the project for being unprepared, with some even accusing it of deliberately maintaining high gas fees. The Arbitrum airdrop serves as a reminder of the importance of adequate preparation, load testing, and clear communication during high-demand events.

Celestia

Celestia airdropped its native token TIA to over 600,000 eligible users. However, only about 190,000 users (less than one-third) claimed their tokens, resulting in nearly $1 million worth of unclaimed TIA tokens. Within four days of the mainnet launch, Celestia's transaction volume was below 350,000, failing to gain significant attention.

The low claim rate and moderate transaction volume indicate a lack of interest or awareness among potential users. Offering attractive staking rewards and ensuring token stability through locking can help incentivize participation and growth. Focusing on building community, attracting developers, and showcasing its unique value proposition is key to driving adoption and network activity.

EigenLayer

EigenLayer allocated 15% of its EIGEN token supply to an airdrop, rewarding users who staked ETH or liquid staking tokens (LST) on the platform. The airdrop sparked controversy within the crypto community, with many questioning the fairness of token distribution, the exclusion of certain user groups, and the initial non-transferability of the tokens.

Most tokens (55%) were allocated to investors and the EigenLayer team, while a relatively small portion was reserved for stakers. This uneven distribution led to accusations of unfairness and centralization. Ensuring fair token distribution, striving for inclusive participation, considering flexible token transferability, and prioritizing transparency are crucial.

zkSync

On March 24, 2024, zkSync distributed 3.675 billion ZK tokens to 695,232 eligible wallets. The eligibility for the airdrop was based on activity thresholds and ecosystem contributions. 89% of the tokens were allocated to eligible users, while the remaining 11% were distributed to contributors. The airdrop tokens had no vesting or lock-up period and could be claimed before January 3, 2025.

Concerns were raised that the airdropped tokens might ultimately end up in the hands of a few exploitative wallets rather than being fairly distributed. The zkSync airdrop highlights the need for robust anti-sybil measures to ensure fair token distribution. Potential improvements include social verification, on-chain behavior analysis, per-wallet caps, and prioritizing organic activity.

AO's Fair Launch in the Arweave Ecosystem

The fair launch of AO is a unique distribution event designed to reward Arweave (AR) token holders and incentivize liquidity bridging to the AO network. The fair launch allocates 100% of the 21 million AO token supply to the community, with 36% allocated to AR token holders and 64% to users bridging assets from other networks to AO.

Distribution Method

Unlike most airdrops that allocate a portion of tokens to private sales, team members, or early investors, the fair launch allocates all tokens to the community. AR token holders will receive AO tokens based on their AR holdings, while users bridging assets like staked ETH (stETH) from Ethereum or Solana to AO will receive the remaining AO tokens. This approach ensures a fair and transparent distribution process.

Token Economics

The AO token follows a halving cycle similar to Bitcoin, with the distribution rate gradually decreasing every five minutes. This results in a smoother issuance curve compared to Bitcoin's sudden halving events every four years. The scarcity of AO tokens (with a maximum supply of 21 million) and the unique distribution mechanism lay a solid foundation for its long-term value proposition.

Community Participation

The fair launch of AO actively encourages community participation by rewarding AR token holders and incentivizing liquidity bridging. By allocating a significant number of tokens to users bridging assets, the fair launch promotes the growth and adoption of the AO ecosystem. Additionally, developers can build applications that require asset deposits, providing users with opportunities to support projects they like and earn AO rewards.

Long-term Impact on the Arweave Ecosystem

The fair launch has the potential to drive significant value and growth within the Arweave ecosystem. By rewarding AR token holders, the fair launch strengthens the synergy between Arweave and AO, encouraging mutual growth and adoption. The influx of assets bridged from other networks can drive the development of innovative dApps on AO, leveraging Arweave's permanent storage capabilities.

Furthermore, the role of AO tokens in providing economic security through its flexible Proof of Stake (PoS) mechanism further enhances the overall robustness of the Arweave ecosystem. As AO grows and attracts more developers and users, the demand for Arweave's storage services may increase, driving the value of AR and AO tokens.

Conclusion

Clear eligibility standards, technical preparedness, and fair token distribution are crucial in cryptocurrency airdrops. The AO token marketplace in the Arweave ecosystem stands out for its unique approach, allocating 100% of tokens to the community, rewarding AR token holders, and incentivizing liquidity bridging. The AO trading event emphasizes community participation, transparent distribution, and ecosystem synergy, serving as a model for future token distribution activities. In the ever-evolving cryptocurrency space, prioritizing fairness, decentralization, and long-term sustainability will lead to greater success. The success of future airdrops will depend on aligning incentive mechanisms, fostering community participation, and driving sustainable growth in the ecosystem.