The cryptocurrency landscape has evolved from such easily profitable areas as NFT flipping and ICOs to more complex ways of making a profit. Despite increased efforts to achieve profits, the temptation to make quick money remains strong in the crypto community, which is especially noticeable in the ongoing trend of airdrops. Airdrops, which appeared long before the distribution from Aptos, Arbitrum, and even Uniswap, continue to attract users, especially those who remember the more profitable early days of cryptocurrency.
To benefit even more from airdrops, users resort to the well-known method of creating multiple accounts. These users are known as Sybils. Thus, they strive to get as much money as possible but thereby create real challenges for projects. Sybils exploit the airdrops, concentrating token ownership through major sell-offs, causing rapid token devaluation. This exploitation has severe consequences, including financial stress for projects, eroded contributor trust, and declining TVL that impacts the entire blockchain ecosystem. In response, many projects have instituted stringent measures like KYC verification, necessitating the submission of IDs and Passports, to ensure equitable fund distribution.
Airdrops have emerged as a crucial marketing strategy in the web3 landscape. They offer a direct method of distributing tokens to potential users and supporters, making them a hallmark of web3 project marketing. This approach serves a dual purpose: promoting the project and rewarding early adopters.
Therefore, it is vital to elevate the promotion of this profitable interaction for both projects and users to a new level.
The success of airdrops largely hinges on several factors, with the ability to prevent a Sybil attack being particularly important. Key case studies demonstrate that projects effectively countering Sybil attacks enjoy greater success and user engagement. Conversely, those unable to address this issue experience reduced profits and a damaged reputation.
Despite the fact that the success of airdrop depends on the ways to identify real users, some projects do not show vigilance and do not resort to Sybil recognition and preventing Sybil attacks. Aptos is a prime example of the lack of anti-sibylline policies during its aerial landings. A significant number of tokens for $APT were in demand by airdrop hunters, which led to an overestimation of token prices during the listing, only to plummet with a huge drop. Research shows that a shocking 40% of the tokens uploaded to exchanges were received from Sybil addresses. This highlights the importance of remaining vigilant against Sybil attacks to ensure a sustainable blockchain ecosystem.
However, there are cases of token distribution within the crypto space that have been executed well, utilizing various methods to ensure proper allocation. And these methods are far from KYC and Passports:
But there are isolated cases when projects used their own methods of fair distribution of tokens, and such methods depend on the goals and structure of the project itself. Not all the projects have the opportunity and time to implement their own way to determine Sybils.