# Airdrops: Giving Money Away Is Harder Than It Seems

Source: https://arxiv.org/abs/2312.02752
Kiwi News: https://news.kiwistand.com/stories/Airdrops-Giving-Money-Away-Is-Harder-Than-It-Seems?index=0x657ac49649c365ad826d46eaac52ce2b6266eeb07ab1c85ff2bfb255a5932b5394ae0d04
Submitted by rvolz.eth on 2023-12-14 UTC, 1 upvote, 0 comments

## Summary

Researchers Johnnatan Messias, Aviv Yaish and Benjamin Livshits present what they describe as the first comprehensive empirical study of nine major airdrops across Ethereum and Layer-2 ecosystems, concluding that airdrops often fail to produce lasting engagement. They report that up to 66% of tokens in some cases were rapidly sold, often in recipients' first post-claim transaction, and attribute this largely to "airdrop farmers" who optimize eligibility criteria to extract value. A case study of the Arbitrum airdrop shows short-term activity spikes that did not translate into sustained user involvement. The paper also discusses design pitfalls such as Sybil vulnerability, poor incentive alignment and governance token misuse, and proposes guidelines for more effective airdrop strategies.

## Article

Airdrops: Giving Money Away Is Harder Than It Seems

Authors: Johnnatan Messias, Aviv Yaish, Benjamin Livshits

Airdrops are a popular mechanism used by blockchain protocols to bootstrap communities, reward early adopters, and decentralize token distribution. Despite their widespread adoption, the effectiveness of airdrops in achieving long-term user engagement and ecosystem growth remains poorly understood. In this paper, we present the first comprehensive empirical study of nine major airdrops across Ethereum and Layer-2 ecosystems. Our analysis reveals that a substantial share of tokens--up to 66% in some cases--are rapidly sold, often in recipients' first post-claim transaction. We show that this behavior is largely driven by "airdrop farmers," who strategically optimize eligibility criteria to extract value without contributing meaningfully to the ecosystem. We complement our quantitative findings with a case study of the Arbitrum airdrop, illustrating how short-term activity spikes fail to translate into sustained user involvement. Based on these results, we discuss common design pitfalls--such as Sybil vulnerability, poor incentive alignment, and governance token misuse--and propose actionable guidelines for designing more effective airdrop strategies.