Web3 Reward Economy Is Here— Are You Ready to Take Home Free Money?
The growth of the crypto industry over the last few years has convinced the vast majority that Web3 is the future. And it is going to completely transform the digital landscape. We can point to multiple reasons why that is the case. To begin with, we are going to break free of the centralized structures and hierarchy followed by Web2 counterparts. In addition, we will see communities be the leading force to determine what kind of changes need to be made on a governance level.
When we combine the decentralized aspect with growing digital communities, we see a future where every user is a part of a distribution economy. By that, I mean users will be rewarded for the value they add to a blockchain network in the form of tokens. In a Web2 dynamic, companies take home all the profits. Let us understand this with an example.
YouTube is a video-sharing platform that allows anyone to join their monetization program after reaching a certain number of subscribers. It enables creators to earn through their videos. But YouTube takes a huge cut (more than 45%) from the revenue generated from creators. So even though creators are the ones growing the platform revenues, they don’t get fairly compensated. The high concentration of ownership in a small group of individuals is leading to this kind of inequitable dynamic.
In the Web3 world, however, users will be rewarded for actively using the protocol/platform. We have already seen many projects use airdrops to distribute their tokens to early supporters and users. It has also become a go-to-market strategy for up-and-coming projects to acquire customers. As a result, such projects are not only community-led but also community-owned.
In this article, we go through different projects that have followed a unique incentive model to drive mainstream usage. In the end, we also will be highlighting a few possible companies that are expected to launch a token and reward their early users. Read till the end. You don’t want to regret missing out on free money down the line. Let’s get started.
Uniswap still remains to be one of the biggest decentralized protocols to ever airdrop tokens and distribute governance rights. When Uniswap decided to further decentralize itself, the firm decided to airdrop 150 million UNI tokens to everyone who ever interacted with Uniswap. It wasn’t a necessity to hold UNI tokens. They just had to use Uniswap once and they were eligible to claim.
At the time of launch in 2020, the free airdrop of 400 tokens was worth around $1000. Fast forward to 2022, those same tokens would be worth more than $4000. If one managed to sell at the top, they would have gotten nearly $16,000.Outside of the monetary aspect, the Uniswap airdrop also tripled the number of holders to over 300,000.
Ethereum Name Service (ENS)
One of the most exciting non-financial applications from the Ethereum ecosystem is the ENS domain. Many people in the Web3 space now own an ENS domain attached to their username. Why? Because it simplifies the transfer of assets and lets users set subdomains that correspond with a decentralized application.
Ethereum Name Service launched in 2017, and at that time, users needed to have at least seven or more characters in their domain. Nowadays, users can even register 2 or 3 character domains.
So ENS played and is playing a crucial role in decentralizing the web. And after four years of hard work and dedication put forth for building a community, they launched a token and rewarded all the owners of a “.eth” domain.
Token Distribution of ENS
The total supply of ENS is 100 million, and the team allocated 25% for the airdrop. So 25 million tokens were distributed to all the ENS holders, which at the time of the snapshot were more than 137,000. It was an easy five-figure payday for holders who believed in the project at an early stage.
Unlike Uniswap, ENS didn’t distribute the same number of tokens to all users. There was a multi-tier system that determined who held the domain for the longest and shortest time. So if the multiplier was on the higher tier, holders got more tokens, up to 1,000 ENS. The lower tier holders, who registered a domain for a few months, got around 200 tokens. If they managed to sell at $85, that still nets them $17,000. As we can see below, the total ENS claimed is now worth more than $19 million. And we have yet to see the remaining 25% of holders claim their tokens.
DYDX Exchange (DYDX)
The non-custodial decentralized derivative exchange, DYDX, attracted many traders for its layer two versions of the Ethereum network and gasless deposits and withdrawals. But DYDX caught the attention of the crypto community when it launched its token airdrop. It was one of the biggest airdrops in 2021, with traders receiving up to six-figure worth of token bags.
For users to receive more tokens, they had to make more trades and reach new milestones. For example, if your traders are valued anywhere between $1,000 and $10,000, you would have received 1,163 DYDX tokens, which at the time of launch were worth more than $16,000.
Here is a complete breakdown of DYDX airdrop token distribution:
Few users also took advantage of the airdrop by using multiple wallets and trading back and forth at a high volume.
If you have been active in the NFT space, it is impossible for you to miss LooksRare airdrop. In just a few months, the marketplace won over the NFT community and provided a unique, cost-efficient way to trade NFTs. For those who don’t know about LooksRare, here is a simple explanation:
LooksRare is an NFT marketplace that follows a community-first approach, meaning it rewards its users for actively buying and selling NFTs. For every NFT trade, the platform rewards both seller and buyer in WETH and LOOKS tokens. It is also the first marketplace to offer staking features. When it launched in January, the annual yield percentage was 600%. Now, after the halving event, it came down to 170%, which is still a good way to put those rewards to work.
When compared to OpenSea, LooksRare is already leading in terms of the trading volume. A majority of it is due to wash trading, but still, it is impressive for a project only a couple of months old to pull off such parabolic growth. You know why it went parabolic? Because they gamified NFT activity by attaching an incentive model and rewarding all NFT users who used OpenSea. They ensured people list NFTs on their platform to claim their airdrop. This allowed them to have a substantial number of collections and traders.
Now coming back to the airdrop. The total supply of LOOKS is a billion. Out of that, 120 million tokens were distributed to more than 124,000 addresses.
LooksRare followed a different approach for their airdrop because they were using data from another marketplace. As we can see in the table below, there are ten different tier levels based on volume traded. If someone traded over 1000 ETH in a six month time frame, they received 10,000 tokens.
Source- LooksRare Docs
If the lowest tier holders (nine and above) managed to sell at $7 (ATH), they would have received around $875. The topmost holders (tier 1) would have received $70,000.
ApeCoin By Yuga Labs (APE)
Saved the best for the last.
Yuga Labs recently launched their own utility cum governance token called ApeCoin. Every NFT holder belonging to the Yuga Labs ecosystem received massive rewards. The rewards were calculated by adjusting the floor value of each collection: BAYC, MAYC, and BAKC.
BAYC holders got the most rewards with 10,094 tokens, which are currently worth over $140,000. Yes, a single NFT that cost less than $200 for minting rewarded people with six figures. For owners of mutant apes, the token allocation is 2,042 APE. There is no reward for only owing BAKC NFTs. One has to own either a BAYC or MAYC to get those additional 856 tokens from BAKC. Here is a simple breakdown:
In terms of tokenomics, the total supply of $APE is billion. And 150 million were committed for NFT holders. So far, 87% of the tokens are claimed and only 4% of the eligible addresses are yet to claim.
This airdrop is truly one-of-a-kind. No project ever managed to deliver so much in just 11 months. And with the team getting new funding of $450 million from some of the best VCs, it gives us confidence that $APE tokens will have greater utility in Yuga Lab’s metaverse, The Otherside.
Who Will Airdrop Next?
From the above examples of the most recent airdrops, we hope you understand the potential rewards you can get for getting into projects early and being an active supporter. Now it is okay if you missed all the major airdrops. What matters now is — to identify projects that can soon drop their own token and reward users.
As we have seen LooksRare take off and suck liquidity from its competitors, we can possibly see OpenSea launch their own token and reward NFT traders. The distribution and allocation may differ. But it is likely to happen in the near future.
Another possibility is MetaMask. We can see an airdrop similar to Uniswap. Every user who ever interacted with the Web3 wallet may get a reward. Now, all these are just assumptions. We cannot definitively say how it’s going to play out. You can explore different market sectors in crypto, and find similarities to projects that airdropped tokens. Remember: if you manage to get in early and hold, you can reap massive rewards in the crypto space.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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