MAR 14, 2023 • 17 Min Read
Airdrops are one of the most sought-after events for users of on-chain projects. They’re the distribution of a protocol’s token, often to historical users. The aim is to reward loyal users and increase the user stickiness of the product. But they don’t always go as intended.
The first thing to understand is why protocols give away millions of dollars worth of native tokens. Primarily, there are four reasons for doing so:
Creating an organic holder base: Projects will reward historical users of their platform. Generally, higher user activity leads to a higher percentage of airdropped tokens. The rationale is that if this group was using the protocol well before there was any economic incentive to do so, then they are more likely to use the token in
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