Today, I saw that the largest DEX in the APTOS ecosystem, Liquidswap, will announce an airdrop on July 30. I am very interested in its airdrop distribution mechanism and potential in the future. It can be said that its distribution mechanism has contradicted many projects and is worth learning from for many projects that have not yet issued tokens.

The most important concept of this airdrop is: "Bots are also people." Even accounts that have interacted 5 times and generated a trading volume of $250 will receive an airdrop. Moreover, the project has cleaned up wash trading in advance, which shows sincerity.

Today, let's take a look at:

• Why is the Liquidswap airdrop distribution mechanism worth learning for most projects?
• How much airdrop value can low-tier and premium accounts receive?
• Why is LSD considered a golden shovel?
• Should we hold or sell after receiving the airdrop?

1. LSD Airdrop Distribution Mechanism - Everyone Gets a Share, Worth Learning for Most Projects

The total supply of Liquidswap tokens $LSD is 42 million, with 15% allocated for airdrops and staking incentives. This time, 5% of the total supply will be airdropped first, and the remaining 10% will be distributed to users in the form of staking rewards and airdrops, meaning the project will conduct at least 2 airdrops, which is a tradition in the APTOS ecosystem.

(1) How is $LSD specifically allocated?

According to the official announcement, the airdrop will be distributed based on the following categories:

• 27% allocated to community NFTs, meme tokens, product testers, and ambassadors, with a snapshot date of July 10, 2024;
• 49% allocated to early traders and liquidity providers, with a snapshot date of April 7, 2024;
• 24% allocated to latecomers, also based on trading and liquidity provision, with a snapshot date from April 7 to July 10, 2024;

From this, it is clear again that to grab airdrops, one must act early.

If the official issues early NFTs or memes, it is best to hold a little, as this can increase the coefficient. The allocation of $LSD to these three types of users increases different coefficients:

• NFT and meme holders - 10%
• Traders, liquidity providers, testers, ambassadors, and other task-completing users - 20%
• Lumio whitelist addresses - 10%

(2) Liquidswap is not a game for whales - basic participation is enough

Although Liquidswap has protective measures for low-tier users, it is definitely not a game for whales. Liquidswap categorizes users into three types:

(1) Bot addresses - Bots are also people (a satire on those who only PUA users) (good news for multiple accounts)

For ease of understanding, "bot addresses" are translated as "low-tier users." As long as they trade 5 times, with a volume of over $250, or create an LP of $100 for over a year, they qualify as low-tier. In other projects, such wallets are usually subject to Sybil attacks and are passed over.

As the first token project from Pontem, the developer studio behind APTOS, Liquidswap may not want to be associated with previous L2 projects, so it has introduced an airdrop mechanism stating "Bots are also people." As long as the account is not associated with the project team, anyone meeting the low-tier criteria will receive an airdrop.

Eliminating wash trading, recognizing that bots are also people, and not PUAing users - these points alone are enough for other projects to learn for a lifetime.

https://pontem.network/posts/liquidswap-lsd-token-first-airdrop

The airdrop allocated to low-tier users is not very much, generally under 50 LSD, but since the project does not pass low-tier users (addresses receiving less than 1 LSD will be removed), it is good news for multiple account users. If low-tier users only focus on trading volume, based on an average trading cost of 0.2%, the cost for generating a trading volume of $500 is about $1. I see that some friends in the group can get at least 10 LSD, which is worth analyzing later.

(2) Whale users (not favored by the project)

It is important to note that several projects issuing airdrops in 2024 are "killing whales." This may be a trend for future airdrops, as project teams do not favor "whales." If you have a lot of money, you can become a "whale," but this requires great courage.

However, in the Liquidswap airdrop, whales do not have it easy either. The announcement states that some users have generated a lot of trading volume in the project, and for fairness, the project will only issue a maximum of 8,400 LSD to those who excessively trade. This may be the strictest aspect of the Liquidswap airdrop.

The original text states, "Tokens exceeding the limit will be redistributed to all wallets below the whale limit."

The original text refers to "the most valuable users," whom they call "middle-class users." Let's see what this specifically means and what insights it provides us.

(3) Middle Class

In the Liquidswap airdrop announcement, the project mentions the term "middle class." It took me a while to understand what "middle class" means in the announcement, possibly due to translation software or cultural differences.

Middle class means: well-maintained accounts.

The announcement does not explicitly state the standards for well-maintained accounts, but it hints at "community users" versus "non-community users," where community users (colored) bear greater costs than non-community users (gray):

Liquidswap mainly assesses whether users have NFTs, memes, trading activity, or liquidity provision.

The main costs arise from trading and adding liquidity, so community users are likely the well-maintained accounts the official hints at.

This can be seen from the "community" section on the official website, where ecological bounties, ambassadors, and tasks indicate that wallets that interact frequently are well-maintained accounts.

2. How much airdrop value can low-tier and premium accounts receive?

How much U can be received has always been the primary concern of those chasing airdrops, and the amount depends on the token's price.

The total supply of $LSD is 42 million. According to the $LSD release schedule over three years, only 10 million tokens will be released in the first 10 months, with an estimated 8 million tokens released in the first month. For convenience, we will calculate based on 10 million $LSD released in the first month.

$LSD will be listed on centralized exchanges such as KUCION, Bitget, and MEXC at 8 PM Beijing time on July 30.

Previously, $LSD was launched on KUCION through IEO. Based on past data, the initial FDV on KUCION was around $20-30 million, which allows us to infer that the listing price of $LSD will be between $0.47 and $0.71, with a market cap of $4.7-7.1 million, which is relatively low.

As mentioned earlier, low-tier, well-maintained, and whale accounts may receive the following airdrops:

• Low-tier accounts: 10-100 LSD/account, 20 accounts, estimated to receive around 100-1000 U (calculated at $0.47/LSD);
• Well-maintained accounts: 100-500 LSD/account, 20 accounts, estimated to receive around 1000-5000 U;
• Whales can calculate for themselves.

The above distribution is summarized based on screenshots shared by the community, considering that the first LSD airdrop accounts for 5% of the total supply, with 69% released before the listing and the remaining portion released linearly over 4 months.

The issuance of LSD is limited, and the initial circulation is not very large. The project team Pontem, behind Liquidswap, has another chain abstraction project, Lumio, that will issue tokens. The market cap of Pontem's first token project, $LSD, is unlikely to be unattractive. Based on the current dynamics of the project, $LSD is expected to become a golden shovel.

3. Why is LSD considered a golden shovel?

Liquidswap ($LSD) is the largest DEX in the APTOS ecosystem and also the first token project in the APTOS ecosystem's airdrop season of 2024. Similar to $JUP in the SOL ecosystem, it will connect most projects that are about to issue airdrops within the ecosystem.

Let's see how $LSD serves as a golden shovel.

(1) There is still 10% of the airdrop for $LSD to be distributed

The Liquidswap announcement states that the remaining 10% of the airdrop will be provided in the form of staking rewards and future airdrops.

(1) $LSD Internal Cycle

After the issuance of Liquidswap tokens, a veToken governance model will be implemented. Simply put, users can stake $LSD to mint veLSD. The lock-up period can range from 1 week to several years. The longer the lock-up period, the more veLSD and voting rights one receives.

From the perspective of the internal cycle, staking $LSD to mint veLSD will determine how future airdrops are distributed based on the amount of veLSD held.

This is the narrow definition of a golden shovel, and many people can only see this aspect.

(2) $LSD External Cycle

For example, many people see staking $LSD and think this is just a promotional activity by the project team to attract people to lock up their tokens. This thought is quite normal, as small investors do not need such high faith.

However, if we want to upgrade from "novice" to "intermediate" in Web3, from "debt" to "profit," we need to understand the essence of the matter. When a project becomes popular, many clones will emerge, and whether you will be harvested by clones depends on your understanding of the circle. If your understanding is shallow, the probability of being harvested is much higher.

The eToken governance model gradually transfers the governance of the project to veLSD holders, allowing them to actively participate in protocol governance, including proposing and voting on proposals.

Here, earning lock-up rewards is just an additional benefit; governance voting is the main focus and is often the most overlooked aspect.

In governance voting, one can increase the yield of designated staking pools or liquidity pools, allowing users to leverage their abilities to contribute to the ecosystem. If you hold tokens in a certain pool, you are part of the stakeholders.

If you join after the $LSD platform has grown, you may not feel it at first. As the TVL increases, the platform becomes a traffic pool, and various projects will come to negotiate cooperation. The community will vote on which platforms to collaborate with, how to cooperate, and how to distribute rewards, making your vote sometimes crucial.

As the platform's pool grows larger, the rewards will become richer, encouraging more users to stake $LSD to convert to $veLSD, which is the core advantage of veToken.

Once this advantage becomes prominent, the $veLSD in your hands will also hold value, allowing you to generate more income through cooperative platforms.

Understanding the logic above, we can introduce the second benefit that $LSD as a golden shovel can bring to users.

(3) $LSD's parent company Pontem will launch its own chain abstraction public chain - Lumio (a game changer)

In a previous tutorial “Crypto Dog Compilation Airdrop Article 284: The Second Round of the Largest Airdrop in the APTOS Ecosystem - Pontem Network (Complete Tutorial)”, I provided an in-depth analysis of Pontem and Lumio. This is a game-changing project, and everyone can refer to the link.

Pontem is a strategic partner of Aptos, creating Dapps and infrastructure for Aptos, including development tools, EVM, AMM, etc., to promote the widespread use of the Aptos blockchain. It can be said that Pontem has the technology and funding to launch a Lumio public chain without any issues.

Lumio has not yet launched and does not even have a testnet. It is estimated that after the team has arranged for Liquidswap's token launch, market cap management, and joint marketing, they will promote Lumio. The promotion of Lumio will also adopt an airdrop method, and the most important way to empower projects through public chains is the DeFi model, which is the most effective way to increase TVL.

The ready-made DeFi is Liquidswap, Pontem's first token project. It can be predicted that one of the indicators to receive Lumio airdrops in the future will be staking LSD to obtain $veLSD. The more $veLSD one holds, the greater their weight in Lumio (of course, Lumio will also introduce its own coefficient bonuses, not just this one).

(4) $LSD will receive airdrops from the popular project Movement

Lumio has announced that it will build a Dapp on Movement, which is one of the major airdrops. The incentive conditions for Movement will likely include $veLSD holders.

https://x.com/movementlabsxyz/status/1811463140070293695

(5) APTOS Second Round Airdrop

Aptos technology surpasses Solana, but neither the tokens nor the community have developed as vigorously as Solana. Not only Solana, but Aptos's valuation is almost the same as Celestia's (3 billion USD), which has about 400,000 active stakers, nearly 4 times that of Aptos.

If Aptos wants to break through in this bull market, it must capture user demand and retain users.

• In the first round, Aptos only airdropped 3% of the tokens, and even with this 3% distribution, individual wallets could receive 1000-3000 U. It is important to note that these wallets only completed a few tasks on Galxe, voted a few times on Gitcoin, and minted a few NFTs.

Users are eagerly anticipating a new round of airdrops from Aptos, and it seems that Aptos has recognized this, as many projects in the ecosystem that have not yet issued tokens are starting to take action in the second half of 2024.

Especially the largest lending platform on Aptos, Aries, has released an incentive plan to distribute APT rewards.

Without Aptos's authorization, Aries would not issue such an announcement; at most, they would distribute their own token rewards to users.

As the largest DEX platform on Aptos, Liquidswap ($LSD) will naturally be part of Aptos's second round of community incentives. According to the veLSD mechanism, the second round of airdrops on Liquidswap will be distributed to veLSD holders (staking $LSD to mint veLSD).

In summary: After the $LSD token is launched, the official will first introduce a veToken governance model, allowing users to stake $LSD tokens to obtain $veLSD. Users holding $veLSD will directly unlock airdrops from four major blue-chip project tokens.

4. If holding $LSD tokens from the airdrop, should we sell or hold?

$LSD may become the golden shovel of the MOVE ecosystem, but those are all "external cycle" empowerments. Apart from its fellow Lumio, which will work hard to promote $LSD, the empowerment from other projects may not reach full potential, so the project itself still needs "internal drive."

We can indirectly verify that Liquidswap ($LSD) is cultivating its "internal drive." For example:

Recently, Aave announced that it will launch a "fee switch," new security modules, and an AAVENomics update…

After the news of Aave enabling the fee switch mechanism broke, the price of AAVE surged from $85 to over $100. This has sparked significant discussion among developers, with many industry insiders interpreting it as "DeFi summer again." They hope to apply this mechanism to their own projects. According to Chinese customs, this translates to: "Another spring for DeFi."

There is a lot of content, and I recommend checking it out yourself. Here is the link:

https://governance.aave.com/t/temp-check-aavenomics-update/18379

Aave has launched a "buy and distribute" plan, mainly taking surplus from the protocol to purchase AAVE assets on the secondary market to reward ecosystem users.

Liquidswap ($LSD) currently has a TVL of 43M and an average daily trading volume of 10M, accounting for over 70% of the trading volume in the Aptos ecosystem. This will generate significant trading revenue, all of which will enter the protocol. Liquidswap has stated that it will launch a "buy and distribute" plan to use protocol revenue to purchase $LSD tokens on the secondary market to reward users within the ecosystem.

This is a clear example of "internal drive." The internal cycle of Liquidswap will keep the demand for $LSD at a very active level.

The supply of $LSD in the first year is very limited, only about 10 million, less than 25% of the total token supply. To prepare for future airdrops, most users are likely to choose to stake, further reducing the market circulation of $LSD. If the "buy and distribute" plan is launched, $LSD will have significant potential.

If you hold $LSD from the airdrop, it is recommended to decide based on the situation. If the staking amount is not very large and the token is declining, you can sell first and buy back later; if the trading volume after listing is not large, indicating that everyone is reluctant to sell, you can wait for a while. If positive news continues, you can hold out for a better price.