Interview/Anndy Lian – The Future of Crypto Airdrops: Hype or Hope?

Interview/Anndy Lian – The Future of Crypto Airdrops: Hype or Hope?

From Bitcoin’s humble beginnings – where free coins were given away to early adopters – to today’s multi-million dollar airdrop extravaganzas, the landscape of crypto giveaways has transformed dramatically.  As the industry matures, we’re left with critical questions about the long-term viability and ethical implications of these events.

To get a handle on these complex issues, we turned to Anndy Lian, a leading voice in the blockchain world. As an intergovernmental expert, best-selling author, investor, board member, and sought-after speaker, Lian brings a wealth of knowledge and a unique perspective to the table. His insights into the evolving world of crypto airdrops are both compelling and thought-provoking.

The Shib: What is the most significant impact airdrops have had on the crypto industry thus far?

Lian: In my opinion, it’s Notcoin. They are very decentralized. No VC. Well distributed.

The Shib: Do you believe airdrops are a sustainable and ethical method for wealth distribution or primarily a marketing tactic?

Lian: I think it is a sustainable and ethical marketing strategy that can help gather users in the beginning.

The Shib: What are the potential risks and downsides associated with airdrops for both projects and participants?

Lian: Distributing free tokens can lead to an oversupply in the market, potentially diluting the value of the tokens.

The Shib: How can projects ensure that their airdrops genuinely benefit the community and align with their long-term goals?

Lian: Be transparent about the eligibility criteria for the airdrop. This helps set clear expectations and fosters trust within the community.

The Shib: What regulatory challenges or concerns might arise from the increasing popularity of airdrops?

Lian: There is significant uncertainty regarding the tax treatment of airdropped tokens. Tax authorities in various countries have different guidelines on how to treat these tokens, which can complicate compliance for recipients.

The Shib: How do airdrops influence investment decisions, and what factors should investors consider when evaluating airdropped tokens?

Lian: Evaluate the long-term viability of the project behind the airdrop. A strong project with clear goals is more likely to succeed.

The Shib: What are the red flags or warning signs that investors should look for in airdrops that might indicate potential scams or unsustainable projects?

Lian: Scammers often provide limited or vague project details. A legitimate project should have a well-documented whitepaper, clear information about the team, and token distribution. The one thing I hate is that some scammy projects can “give birth” to new tokens from unknown wallets.

The Shib: How do you think the rise of airdrops has impacted the broader crypto market and investor sentiment?

Lian: Airdrops are never negative. Receiving free tokens can bolster investor confidence. It creates a positive sentiment as investors feel rewarded and may become more active in the crypto space.

The Shib: What long-term trends do you see emerging in the airdrop space, and how might they shape the future of crypto investing?

Lian: One recommendation is that projects should stop using bad middlemen to do their airdrops. They should find good platforms that are really sending the free tokens to the right target audiences. A shift from broad, public airdrops to more targeted distributions aimed at rewarding early adopters and significant contributors to the project.

The Shib: What advice would you give to other projects considering an airdrop as a way to engage their community and distribute tokens?

Lian: Do your math properly.

Crypto airdrops remain a powerful tool for both project growth and individual enrichment. But as the space becomes more sophisticated, so too do the strategies of both legitimate projects and opportunistic scammers. Lian’s insights underscore the importance of informed decision-making, careful risk assessment, and a focus on long-term value over short-term hype.  Airdrops can be a part of a balanced crypto portfolio, but they should not be the sole focus of any serious investor.

 

 

Source: https://news.shib.io/2024/06/26/interview-anndy-lian-the-future-of-crypto-airdrops-hype-or-hope/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Do Crypto Airdrops Benefit the Community in the Long Term?

Do Crypto Airdrops Benefit the Community in the Long Term?

Airdrops became mainstream in the ICO boom years starting around 2016 as a means to incentivize users to promote a new token on social media for example. More recently, in 2020, decentralized exchange Uniswap changed the outlook on incentives and rewards when the ecosystem gave away tokens for free to anyone who had utilized the Uniswap platform before a specific date. The 400 UNI tokens distributed provided many investors with their first big break. Putting aside the popularity of airdrops, it’s a good time to consider how effective they are for users and for startups, and to look at both the upsides and downsides for this sometimes controversial mechanism for driving crypto growth, especially in a bear market.

A good way to start this analysis on the ‘state of airdrops’ is to begin with a little academic rigor! Late last year a quartet of academics took a close look at the rise of DEXs, including the role of airdrops and governance tokens, using data from CoinGecko. They found that DEXs typically use airdrops to reward their early supporters, serve as marketing tools to reach potential users on other DEXs. But they also found that, “airdrops can backfire, because they put governance tokens in the hand of individuals who do not believe in the long-term viability of the exchange and want to maximize their short-run returns. Moreover, airdrops may unintentionally signal that the tokens are lower quality, influencing expectations about the exchange’s longevity.”

Despite those risks, overwhelmingly from the same of 51 exchanges they analyzed, they did find a positive relationship between airdrops and growth in DEXs market cap and volume, but with the important caveat that such benefits were concentrated on exchanges offering a governance token. Specifically, that DEXs which airdrop manifest an average 16.1% rise in their growth rate. “We also find some evidence, although the estimates are not statistically significant at conventional levels, that DEXs who airdrop governance tokens experience higher volume growth than those who do not,” the paper’s authors added.

The successful Optimism airdrop at the start of June was a rare example of good news in the crypto sphere following the collapse of Terra. Back in April Optimism, the layer-2 scaling solution for Ethereum, said it planned to launch a decentralized autonomous organization (DAO) along with the OP token which enables users to vote with. In turn the DAO will use money raised from Optimism fees to fund grants for the community. While this tends to point to the value of airdrops to build crypto communities, how safe is this assumption? Indeed, there was criticism from within the Optimism community that users who sold their tokens straight after receiving them should be ineligible for further airdrops.

Following the Optimism airdrop, and a sharp drop of 40% in price, “a member of the governance community named OxJohn submitted a proposal to the Optimism Governance forum to exclude addresses that dumped 100% of their tokens. The post, titled ‘Users who sold the initial OP airdrop should become ineligible for all future airdrops’ attracted considerable attention from the community with 11,200 views, 305 replies and 595 likes,” it was reported. His contention was that wallet accounts that simply collected the OP airdrop and swapped straight to Uniswap were “not playing a constructive role in Optimism governance. Instead of contributing to governance, they are maximising for profit..Hence, this proposal is to discuss excluding such accounts in all the future distribution of Optimism’s airdrop. Also, we can make a public list of accounts that engage in this behaviour, so that other projects and DAOs can also choose to borrow from our work – I believe many projects will be interested in rewarding those who actually contribute to governance, rather than those who just see ownership given into a protocol as a short term liquidity bonus.” While it provoked quite a negative reaction Bankless host, Ryan Sean Adams said it came down to deciding who you were trying to incentivize, whether for the settlers of the community, those that will stick around, rather than the people who are just dumping. “But I’m probably more in favor of let’s try to incent the network towards governors and towards settlers and away from the traders and that sort of thing. So, I can definitely understand this governance post,” Adams added.

Airdrops and community-building

Without a doubt, many established crypto communities owe their longevity to the proper distribution of airdrops. It appears to be one of the finest strategies to attract new users to a new crypto project. What makes it even more unique is that these airdropped tokens also function as governance tokens for some of these projects, thereby increasing their value and utility. Clearly, the issue for projects that distribute airdrops has always been: how do you avoid giving your airdrop to people who would simply dump and devalue your tokens without contributing anything? There is a fine line between an airdrop negatively impacting ecosystem growth and being a useful tool for developing a sustainable community. As Michael J. Casey, chairman of CoinDesk’s advisory board wrote on the subject, “I think the debate could be better served by, first, viewing airdrops as a marketing expense in the service of promoting community adoption and, second, recognizing that, one way or another, adoption requires some level of marketing. A currency is nothing if it is not widely used. And that can’t be achieved unless people make some cost-incurring effort to encourage widespread usage.”

Airdrops should be utilized carefully as a reward for dedicated and loyal members of a crypto community and should work for the benefit of the community. Unfortunately, one of the issues that always affects the value and usability of an airdrop is that the mechanics occasionally favor users who are not long-term believers in a certain project and regard it as easy money.

The Terra (CRYPTO: LUNA) ecosystem also faced the downside of airdrops when Luna V2 tokens were distributed to investors to compensate them for their losses. However, the airdrop did not go as planned, as some investors complained on social media about the uneven distribution of new Luna tokens. Many investors received a relative handful of Luna tokens compared to what the Terra ecosystem promised. The Terra ecosystem admitted that token distribution was uneven and vowed to rectify the issue. The uneven distribution of airdrop was undoubtedly one of the factors that caused Luna to drop from an all-time high of $19.2 to an all-time low of $4.08.

Chairman of BigONE Exchange Anndy Lian said: “Airdrop mechanisms should be improved and strategically implemented to ensure that committed community members who understand the long-term goals of a crypto project benefit more than short-term holders who are only interested in profits. Accepting tokens from a project without a plan and a clear value proposition is, at most, a short-term play, not a long-term wealth development approach. I do believe that airdrops can help build the necessary momentum and buzz for a crypto project but that if they are poorly executed, they may negatively impact the community’s growth. Therefore, it is critical airdrops get the balance right for the long-term, and target long-term holders who are true community builders rather than simply short-term holders.”

 

Original source: https://uk.investing.com/news/cryptocurrency-news/do-crypto-airdrops-benefit-the-community-in-the-long-term-2674845

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Do Crypto Airdrops Benefit the Community in the Long Term?

Do Crypto Airdrops Benefit the Community in the Long Term?

Airdrops became mainstream in the ICO boom years starting around 2016 as a means to incentivize users to promote a new token on social media for example. More recently, in 2020, decentralized exchange Uniswap changed the outlook on incentives and rewards when the ecosystem gave away tokens for free to anyone who had utilized the Uniswap platform before a specific date. The 400 UNI tokens distributed provided many investors with their first big break. Putting aside the popularity of airdrops, it’s a good time to consider how effective they are for users and for startups, and to look at both the upsides and downsides for this sometimes controversial mechanism for driving crypto growth, especially in a bear market.

A good way to start this analysis on the ‘state of airdrops’ is to begin with a little academic rigor! Late last year a quartet of academics took a close look at the rise of DEXs, including the role of airdrops and governance tokens, using data from CoinGecko. They found that DEXs typically use airdrops to reward their early supporters, serve as marketing tools to reach potential users on other DEXs. But they also found that, “airdrops can backfire, because they put governance tokens in the hand of individuals who do not believe in the long-term viability of the exchange and want to maximize their short-run returns. Moreover, airdrops may unintentionally signal that the tokens are lower quality, influencing expectations about the exchange’s longevity.”

Despite those risks, overwhelmingly from the same of 51 exchanges they analyzed, they did find a positive relationship between airdrops and growth in DEXs market cap and volume, but with the important caveat that such benefits were concentrated on exchanges offering a governance token. Specifically, that DEXs which airdrop manifest an average 16.1% rise in their growth rate. “We also find some evidence, although the estimates are not statistically significant at conventional levels, that DEXs who airdrop governance tokens experience higher volume growth than those who do not,” the paper’s authors added.

The successful Optimism airdrop at the start of June was a rare example of good news in the crypto sphere following the collapse of Terra. Back in April Optimism, the layer-2 scaling solution for Ethereum, said it planned to launch a decentralized autonomous organization (DAO) along with the OP token which enables users to vote with. In turn the DAO will use money raised from Optimism fees to fund grants for the community. While this tends to point to the value of airdrops to build crypto communities, how safe is this assumption? Indeed, there was criticism from within the Optimism community that users who sold their tokens straight after receiving them should be ineligible for further airdrops.

Following the Optimism airdrop, and a sharp drop of 40% in price, “a member of the governance community named OxJohn submitted a proposal to the Optimism Governance forum to exclude addresses that dumped 100% of their tokens. The post, titled ‘Users who sold the initial OP airdrop should become ineligible for all future airdrops’ attracted considerable attention from the community with 11,200 views, 305 replies and 595 likes,” it was reported. His contention was that wallet accounts that simply collected the OP airdrop and swapped straight to Uniswap were “not playing a constructive role in Optimism governance. Instead of contributing to governance, they are maximising for profit..Hence, this proposal is to discuss excluding such accounts in all the future distribution of Optimism’s airdrop. Also, we can make a public list of accounts that engage in this behaviour, so that other projects and DAOs can also choose to borrow from our work – I believe many projects will be interested in rewarding those who actually contribute to governance, rather than those who just see ownership given into a protocol as a short term liquidity bonus.” While it provoked quite a negative reaction Bankless host, Ryan Sean Adams said it came down to deciding who you were trying to incentivize, whether for the settlers of the community, those that will stick around, rather than the people who are just dumping. “But I’m probably more in favor of let’s try to incent the network towards governors and towards settlers and away from the traders and that sort of thing. So, I can definitely understand this governance post,” Adams added.

Airdrops and community-building

Without a doubt, many established crypto communities owe their longevity to the proper distribution of airdrops. It appears to be one of the finest strategies to attract new users to a new crypto project. What makes it even more unique is that these airdropped tokens also function as governance tokens for some of these projects, thereby increasing their value and utility. Clearly, the issue for projects that distribute airdrops has always been: how do you avoid giving your airdrop to people who would simply dump and devalue your tokens without contributing anything? There is a fine line between an airdrop negatively impacting ecosystem growth and being a useful tool for developing a sustainable community. As Michael J. Casey, chairman of CoinDesk’s advisory board wrote on the subject, “I think the debate could be better served by, first, viewing airdrops as a marketing expense in the service of promoting community adoption and, second, recognizing that, one way or another, adoption requires some level of marketing. A currency is nothing if it is not widely used. And that can’t be achieved unless people make some cost-incurring effort to encourage widespread usage.”

Airdrops should be utilized carefully as a reward for dedicated and loyal members of a crypto community and should work for the benefit of the community. Unfortunately, one of the issues that always affects the value and usability of an airdrop is that the mechanics occasionally favor users who are not long-term believers in a certain project and regard it as easy money.

The Terra (CRYPTO: LUNA) ecosystem also faced the downside of airdrops when Luna V2 tokens were distributed to investors to compensate them for their losses. However, the airdrop did not go as planned, as some investors complained on social media about the uneven distribution of new Luna tokens. Many investors received a relative handful of Luna tokens compared to what the Terra ecosystem promised. The Terra ecosystem admitted that token distribution was uneven and vowed to rectify the issue. The uneven distribution of airdrop was undoubtedly one of the factors that caused Luna to drop from an all-time high of $19.2 to an all-time low of $4.08.

Chairman of BigONE Exchange Anndy Lian said: “Airdrop mechanisms should be improved and strategically implemented to ensure that committed community members who understand the long-term goals of a crypto project benefit more than short-term holders who are only interested in profits. Accepting tokens from a project without a plan and a clear value proposition is, at most, a short-term play, not a long-term wealth development approach. I do believe that airdrops can help build the necessary momentum and buzz for a crypto project but that if they are poorly executed, they may negatively impact the community’s growth. Therefore, it is critical airdrops get the balance right for the long-term, and target long-term holders who are true community builders rather than simply short-term holders.”

 

Original source: https://www.benzinga.com/22/06/27833827/do-crypto-airdrops-benefit-the-community-in-the-long-term

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j