Airdrop is an integral part of the interaction of web 3 projects with their community. Therefore, I think that for any airdrops in the DAO, you need to apply the principles and solutions from the article “The Soft Drop” in order to secure the community and make it more fair.
It is also desirable that the projects that the DAO will support and finance adhere to the same point of view, it is even possible to fix it legally.
I publish the principles and solutions from the article below.
I suggest that the community support this.
The primary metrics that determine capital allocation are based on calculated annual gains. And while the rewards shift on shorter cycles — typically 3 months — this capital comes in based on the expectation of generated value.
In order to realize those gains — which are denominated in the protocol’s token — they must settle them into dollars.
The resulting behavior is that capital-allocating users sell the token resulting in downward pressure on token price discovery. Should this be surprising? No, but many projects are surprised or taken aback when this occurs.
Whales can also carry an outsized impact on price discovery:
In an airdrop, recipients have incentive to dump their tokens upon receipt to realize marketed or perceived gain.
If the recipient waits, the market can move against them. What happens in this case? The selloff places widespread downward pricing pressure on the token.
This is especially true with whales who can have a greater price impact.
Most airdrop recipients may also carry no long term interest in using the product. The Handshake airdrop was made available to active developers on Github and to active PGP users. While the Handshake airdrop was well-scoped, the recipients were not educated on the protocol nor interested in engaging. If the recipients do not go through the process of organic discovery and engagement its likely that they will approach the What’s more likely to occur, is that these users will not go through an organic funnel of discovery and engagement It’s more likely that if these users don’t go through the process of organic discovery and engagement, they will simply be apathetic to the potential to claim the airdrop.
The Soft Drop
The best solution is a simple one. In this case, we incorporate previously successful mechanisms and apply them to the primary underpinnings of the Soft Lock:
- Contribution Caps — The ability to set a cap on how much can be LP’d
- Price Locks — The ability to lock a token until it hits a certain market price
- Time Locks — The ability to lock a token for a specific period or time
The primary reason to layer on any of these is to repel partipants that may have an unfair advantage due to the amount of capital they bring.
Whales, sometimes referred to as mercenary capital, can gain an unfair advantage in soaking up additional tokens at the expense of general users. In order to ensure an outsized number of tokens doesn’t go to a single early investor or to whales that view ownership of the token transactionally. Sybil resistant contribution caps can help prevent this from occurring.
Yield tourists can come with smaller amounts of capital but in great numbers. Apathetic frens can create a noisy community due to their lack of understanding of the product they are using, and their tendency to dump the coin will be much higher.
Regardless of the token emission channel, it’s important that token holders are engaged for the longer term in an effort to bring the greatest benefit to the community.
These simple mechanics are designed to filter out any community members that may carry a shorter term, transactional perspective.