Even as airdrops are becoming one of the most widely used methods to facilitate token distribution, a report by Binance highlights major imperfections related to this method. In the statement , the largest cryptocurrency exchange in terms of daily trading volume stated that lower rewards, insider profit, and bot use have led the community to lose trust in airdrops. Binance rates platforms’ airdrops, giving high marks to Pudgy Penguins Binance gave Pudgy Penguins a perfect 10/10 score in the wake of widespread positive sentiment in the community. The exchange stated the December airdrop had succeeded, with a large bulk of the token supply allocated to Pudgy Penguin NFT holders. Hyperliquid was second, scoring 9/10 for rewarding participants extremely well and a new high-water mark in DeFi. This could have been among the biggest airdrops out there, the Hyperliquid HYPE Nov 2024 airdrop. However, Binance analysis showed not all projects had a successful airdrop. For one, during the last Redstone airdrop, many token holders were still upset when the team reduced community allocation from 9.5% to 5% just before distribution. Members of the crypto community were quick to condemn the platform for unilaterally changing the allocation at the last minute, accusing Redstone of inadequate preparations for the airdrop. Binance even alleged that the stunt diminished consumer confidence in the project’s team, giving it a 2/10 score. Scroll’s October 2024 airdrop was also rated a 3/10 for not meeting the community’s expectations. The vague explanation from the project’s team regarding the eligibility for airdrop also causes the rewards distribution to be uneven for users. Based on user engagements on the platform’s mainnet, such as transaction volume, frequency, and dApp interactions, Scroll detailed in a snapshot taken on October 19, 2024, that they would issue tokens. But some users decried the platform for possessing ‘hidden rules’ in its snapshot mechanics when their rewards fell short of expectations. Nonetheless, the airdrop distributed roughly 70 million SCR tokens across users, or about 7% of the total supply. KAITO also faced heavy criticism for its February airdrop, which allocated 43.3% of tokens to its team and investors and just 10% to holders. The Web 3 platform also allegedly awarded hundreds of thousands of tokens to influencers who went on to sell their tokens almost immediately, causing a decline in token price and trust in the community. Binance also said that holders trying to claim tokens via Magic Eden’s mobile wallet application encountered a number of glitches, which reduced community confidence. Binance recommends exchanges keep the token holders informed Binance calls on platforms to be transparent before users, explaining that the absence of transparency only leads to less trust from the community. The exchange urged platforms to clearly communicate eligibility requirements to holders and the purpose of the airdrop. However, it noted that platforms need to learn to balance giving users the information they need with hiding some to prevent abuse. Binance pointed out that controlling the visibility of certain data could help platforms maintain security. It even encouraged engagement-based models to adopt fixed point-to-token ratios. In addition, Binance will want platforms to prioritize real community engagement to develop a loyal user base, even utilizing technical measures like on-chain watch lists to counteract Sybil farming. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
