How to Manage Airdrop Expectations: The Correct Approach for Project Teams to Unfold the "Big Picture"
To seek benefits, but also to ensure fairness and transparency.1. The Evolution and Current Status of Airdrops
- Origin and Essence:
The extension of the thinking of contributing to create value or buying traffic, where the stance determines the direction.
Since the massive success of the first large-scale airdrop by Uniswap in 2020, airdrops have become one of the most effective strategies for launching projects in the crypto industry. Accompanied by huge wealth feasts, in less than four years, "haircutting" has become a highly specialized sub-industry.
At the same time, the relationship between "haircutters" and project parties has evolved from mutual affection to mutual destruction, with project parties continuously raising expectations, repeatedly PUAing users to exchange for huge financing; users, on the other hand, with the determination to "endure humiliation," perform the act of running away immediately after the airdrop ends.
The deterioration of this game can be traced back to the source of airdrops.
- In the early ICO boom era of airdrops: the blockchain was still a wild land, and at that time, airdrops did not require interaction; having an address was enough to receive token airdrops.
- Later, during the prevalence of liquidity mining, it was replaced by liquidity mining rewards, with the growth of TVL accompanied by the maturity of mining and selling actions.
- The airdrop by Uniswap opened the era of airdrop exploration, providing an excellent example for the promotion of subsequent projects. Since then, airdrops have officially become an important means for many projects to attract new users, raise funds, and list on exchanges, giving rise to the specialized "haircutting" community.
Under the same rules, different participants have completely different perspectives on the same issue, marking the beginning of chaos. The same applies to blockchain airdrops.
From the perspective of project parties, in terms of business models, on one hand, it is a promotional buy traffic mentality, where a larger traffic naturally means more profit, whether through liquidity mining or project financing; on the other hand, it is about achieving decentralization through governance structures to complete the project’s construction.
From the user's perspective, it is about contributing to create value; since I have contributed, it is only reasonable that you should give me a return.
From a certain angle, the interests of both parties align, but the significant difference lies in the recognition of contributions and the power to determine value, which is not in the hands of users. Once abused, contradictions are naturally unavoidable; more critically, the responsibilities corresponding to power are not strongly constrained by project parties.
This further leads to users having to constantly cater to the project parties' value judgment standards through the project's subtle clues, while project parties, based on their needs at different stages, have the power to change their judgment standards at any time. As the market capitalization of blockchain rapidly grows, especially with the influx of massive capital, the complex interests involved require project parties to steer the direction and balance interests among various groups.
Things always move in the direction of least resistance.
For projects, capital is the main investor, and exchanges are the backing of the main investors.
Users start as gods, then become partners, and eventually become just numbers.
For project parties with unchecked power, sacrificing someone when necessary is a relatively easy choice, especially after the rise of haircutting studios.
Some project parties stand on the massive data foundation brought by haircutting studios to secure large financing.
Meanwhile, they intensify the establishment of witch detection methods, preparing to strike precisely at the moment the feast begins.
There are not a few projects that play both sides, and the fundamental reason behind this is the absolute control of project parties over airdrop power.
From the image above, we can see that in the ecosystem of users, projects, capital, and exchanges, from airdrop expectations to project financing expectations, capital valuation expectations, and exchange traffic expectations, all expectations rely on user data interactions.
In practice, to meet regulatory requirements, theoretically, more than 50% of tokens should be distributed to the community, with most of them being used for airdrops not exceeding 10%. Considering the proportions reserved for project parties and capital parties, the remaining amount is quite limited, making phenomena like inflating valuations through data, insider trading, and lock-up period selling understandable.
In the face of interests, unchecked power is a scythe swung towards users.
- Development and Evolution:
From tokens to points, the disputes over traffic value and interests, PUA and anti-PUA.
User compliance, project party acquiescence, and capital promotion have made the haircutting industry an important part of project construction.
The wealth effect brought by high valuations satisfies capital demands but also lays the groundwork for the rise of haircutting studios. A massive number of bots create accounts, and project parties have mixed feelings; if the wealth is large enough, only hatred remains.
How to maximize the avoidance of bot accounts while still growing the user base? The haircutting community is evolving, and project parties are evolving as well.
The most direct and effective way is to increase the cost of haircutting, but to retain haircutters, they must also amplify profit expectations, creating a gap in expectations and indirectly promoting the birth of high-valued VC tokens. After all, projects capable of implementing point systems all have luxurious investment backgrounds.
In terms of results, the point system undoubtedly effectively avoids low-quality bot behavior through increased time costs and various phased checkpoints, but it also leads to the loss of retail investors, turning it into a game for large holders and studios, further resulting in projects, once launched, having haircutters and project parties unable to take over from each other.
Before the project TGE launch and even before the airdrop, different project parties have employed various anti-witch measures, leading to different outcomes.
From the table above, it is clear that in an industry where water is too clear, there are no fish. Mixing up results and purposes often leads to poor outcomes. The point system and anti-witch measures are means to filter out false users, not the ultimate goal.
It is not advisable to eradicate witches through extreme human tests;
Completely letting go is even less advisable;
However, insider trading is a grave sin.
Even with the point system, while it avoids some low-quality bot accounts, issues like distribution of points, transparency of rules, and behaviors encouraging quantity before punishing users continue to emerge, making it unsurprising that user trust is depleted and project data plummets.
Project parties' PUA tactics are sophisticated, but as long as there are profits to be made, the anti-PUA tactics of haircutters will be even more intense, from low-quality accounts to premium accounts, from automated scripts to studio teamwork, and even large-scale human sea tactics, including script attacks on GitHub.
Although some have claimed that airdrops are dead as early as 2023, there are still many professional haircutters today, fundamentally due to the rapid growth of the crypto world, making haircutting still a highly profitable business.
From the perspective of project parties, they cannot do without haircutters. When the bear market arrives, haircutters are the only liquidity they can rely on; after all, as the old saying goes, there is no winter that haircutters cannot survive.
- Awkwardness and Dilemmas:
From traffic to retention, everyone wants to change their fate, but no one can keep their original intention.
For project parties, in the rapidly changing blockchain world, user attention is extremely limited, and competing for user attention has become a compulsory course for every project party.
The most effective means is undoubtedly the wealth effect brought by airdrops, followed by the "retention" issue, which has become a major pain point for project parties. The ghost town of blockchain is both the cause and result of traffic.
Most projects experience a significant drop in token prices after airdrop issuance, with participants not taking over from each other, leading to a sharp decline in token prices. The anti-VC token has become a consensus in the market, with the key reason being the overall market downturn and cyclical rotation.
High valuations in bull markets lead to no one taking over in bear markets.
Even if the bull market warms up, external liquidity tends to focus more on mainstream coins like Bitcoin and Ethereum, while newly launched VC tokens can only compete for existing funds.
The loss of the wealth effect is the original sin of the crypto world. Everyone who comes to surf in the crypto world undoubtedly harbors the desire to change their fate.
With the involvement of mainstream capital, the increasingly vigorous capital operations and the insufficient growth of loyal crypto users form the core contradiction:
Project parties, backed by huge capital, view haircutters as electronic beggars but have to rely on their support;
Haircutters tirelessly study project rules, creating false prosperity for projects in a professional and industrialized manner, but resent the harsh witch rules imposed by project parties.
The core of the contradiction seems to be the PUA nature of the point system or witch system, or the bot accounts; but fundamentally, it lies in the increasing uncertainty of users' expectations of airdrop value and point expectations, while project parties are dissatisfied with the sharp decline in traffic after the airdrop is released. This is a muddled account, but it is not entirely impossible to clarify.
Power is only accountable to the source of power.
As mentioned earlier, project parties have absolute power over airdrop distribution and rules, but in an unrestrained game state, the cost of wrongdoing is too low. Some project parties fail to realize that their current power formation is accumulated by countless users, and users hold the least power in this ecological position, yet they are precisely the source of power.
Therefore, it is necessary to clarify how users view airdrop expectations and why some projects can still have a large following after the airdrop.
2. How the Community Views Airdrop Expectations
- Wanting benefits, but also wanting fairness and transparency.
For community users, the primary goal of participating in airdrops is to obtain expected or above-expected benefits. Studios execute point plans through scripts to batch create accounts or human sea tactics, while project parties counter technology with technology, trying to improve rule loopholes to avoid large-scale witch data. This is understandable and not inappropriate, as seen with projects like Arbitrum.
Although rules and anti-witch technologies cannot achieve perfection, under relatively fair rules, the majority being satisfied will provide a strong foundation for the project's reputation and subsequent activity.
If the rules themselves are unfair, whether in a point system or token airdrop, they will face user condemnation and opposition, such as:
The previous controversy over insider trading with Zksync.
Or the rules of Starknet being biased towards developers.
Even including Taiko's refusal to disclose rules.
And the IO projects' failure to disclose points, PUA user behaviors, etc.
The root cause of users' outrage and community condemnation is still the unfairness and lack of transparency in the system, leading to large-scale user attrition.
- Short-term traffic co-construction is needed, but long-term value connection is more important.
If a project itself is excellent enough, combined with a thriving ecosystem and a good experience, haircutters and project parties can become a mutually beneficial story.
For example, even if Base does not issue tokens, it can still attract a large number of users through the profit effect brought by quality ecosystem projects like friend.tech; Arbitrum and Op have formed a broader positive flywheel through continuous token incentives for ecosystem projects.
As long as the project has long-term value, possesses sustainable self-generating capabilities, and strong operational capabilities, rather than relying solely on short-term airdrop expectations to exploit users, even if there are occasional "witches" that slip through the cracks, it will still stand strong in the market long-term, and both haircutters and real users will ultimately be strong supporters of the ecosystem.
3. How Project Parties Can Manage Airdrop Expectations
- Formation of Expectation Deviations: Asymmetric Expectations and Unforeseen Information
Any formation of expectation deviations arises from asymmetric expectations and asymmetric information. This is evident in numerous failed airdrop project cases.
The psychological changes of failed project parties generally occur in four stages:
Stage One: Hinting at airdrop expectations, attracting customers to spend GAS and deposit funds.
Stage Two: The data is good enough, financing is secured, valuation is stable, and preparations are made for listing. At this point, multiple accounts from haircutters become somewhat of an eyesore, and they look for ways to "kill the donkey after the grind."
Stage Three: Realizing that community expectations are already high, any significant action at this point can easily trigger community backlash, so they decide to "roll together" and build insider trading.
Stage Four: "I know you want to dump, so I will dump too; lock-up periods are nonexistent."
In fact, the above psychological changes are common in cases of anti-haircutting users' airdrops. The fundamental issue lies in:
When you need me, I am a user, a god;
When you don't need me, I am an electronic beggar, a tumor.
The inflated expectations and the root of "killing the donkey after the grind" stem from the fact that project parties have no constraints. When you continuously raise users' expectations with ambiguous information, you cannot say this is users' greed; as mentioned earlier, you claim to be a rich and handsome person, but you always want to deceive people into going to Myanmar.
The lack of transparency in information and the differences in expectations together constitute the cognitive dissonance between project parties and haircutters, which is also the most direct reason for expectation deviations.
- The Core Secret of Expectation Management: Don't Overpromise, Don't Be Inconsistent, and Be Deliverable
In actual project operations, many project parties deliberately describe the value of airdrops/points ambiguously, leaving interpretation space for users to continuously incentivize them, which is actually a good method.
However, it is important to note that ambiguity does not mean a lack of bottom line, nor does it mean inconsistency.
On this planet, the best and most proven expectation management is undoubtedly done by the Federal Reserve. Expectation management essentially revolves around three important cores: don't overpromise, don't be inconsistent, and be deliverable.
Don't overpromise: Corresponding to projects, this means allowing users some interpretative space in subsequent guidance, but the basic rule bottom line must be clear and unwavering; guidance to users should have correction and continuity, rather than allowing the community to ferment until it becomes uncontrollable, as seen with Starknet.
Don't be inconsistent: Many project parties are inconsistent when formulating rules, diluting users' airdrop value, which is essentially a bottomless behavior that causes huge harm to users, as seen recently with Scroll. Others make unnecessary bizarre moves, such as Blast, which, without informing users, started advertising at the critical moment of the final airdrop claim, requiring users to watch the founder's video, creating an awkwardness that rivals the opening animation of Gree's mobile phone, with the current market value plummeting.
Be deliverable: This reflects the project's important manifestation of its scale. Many small-scale project parties are numerous, often resulting in no airdrop or airdropping low-value tokens or NFTs.
In fact, we can deduce from the results that the larger the scale of the project party, the more its market value continues to rise. Especially when users say that this is a small-scale project party, it almost announces: don't take over in the secondary market.
- Some Suggestions: Balance Interests, Community First, Project-Oriented
As mentioned at the beginning of the article, there are different expectations among project parties, users, capital, and exchanges, and the essence of expectations is interest demands. Managing expectations well also means balancing interests.
The current situation is that the probability of high-valued token projects experiencing a price drop immediately after launch is almost 99%. Only a few that have listed on Binance have left some breathing space. To break the current vicious cycle of VC tokens and the airdrop dilemma, aside from the market's bull-bear transitions, project parties must clearly realize that beyond the competition among haircutters, the cryptocurrency market has entered a survival of the fittest elimination competition. In a situation of insufficient liquidity, a rough management approach will not only fail to gain community recognition but may also backfire.
For a project, in the current environment, airdrops are undoubtedly still an effective way to attract new users and promote, but designing airdrop plans based on fairness and transparency is a prerequisite; otherwise, it is better not to issue tokens. Secondly, in understanding airdrops, it is essential to recognize that the costs of airdrops are marketing and promotional expenses, as well as costs for buying traffic, and are one-time incentive actions, not to be taken for granted as investments in users. As long as it is marketing and promotion, there will naturally be conversion rate issues. How to convert subsequently requires project parties to continuously build and further convert into sustainable revenue.
Project parties should pay attention to community building. They should recognize the value of good community operations, as demonstrated by the success of the MEME track. Projects must build a broader user base through communities, KOLs, etc., to achieve truly effective growth.
Use technology to combat bot accounts, rather than getting sullied in the process;
Communicate with the community with a more sincere attitude, rather than PUA;
Win users' respect through fairness and transparency, rather than through deception and small-mindedness.
4. Conclusion
The time left for haircutters is running out, which is an inevitable trend towards the mainstream development of the industry; similarly, the time left for project parties to PUA is also limited, which is likewise an inevitable transformation of industry narratives.
