Web3 teams vying for growth in a downtrend tend to pull out a playbook that was forged in an up-only market. Airdrops were once seen as a path to hacking progress in the traction game, but as an incentive model they arguably now create more harm than good.
Let it Rain
Airdrops originally added to the elusive charm of DeFi. Early adopters could do something novel with magic internet money and might have been handsomely rewarded for it.
The early days of DeFi szn, where future industry stalwarts like Uniswap showered users with free gold, have created a legacy that leaves degens chasing a fantasy.
There was also a lack of expectation. Uniswap launched a token, innovated DeFi and helped herald in a new bull run, and made some risk takers a healthy wedge of profit. Poetry in motion.
Then came the signals groups, threadoooors, and Twitter bots.
A developing Web3 project (or really any product) eventually relies on authentic user feedback to improve. Teams ship, study, and iterate. Then rinse and repeat this process until they're set to go live.
The positive behind airdrops is really only the numbers. The promise of launching one can pretty much guarantee a steady stream of eager degens keen to check off the product’s core actions and hit minimum usage requirements. Thus, the teams behind them then get an idea around the performance capabilities of what they’ve built.
The natural next rung of this discussion is token price. In a market that is so frequently pitched as being PvP, any early liquidity typically falls prey to dumpers creating outsized sell-side pressure as they aim to cash in on free dollars.
Think back to the Arbitrum airdrop and the furore that surrounded the launch as traders went to extremes in order to secure max profits. The project’s only saving grace was that it is clearly a Top 50 protocol with some semblance of a future.
With token price and market cap a driving measure of success in Web3, it gives fledgling teams the added headache of having to placate early investors and downtrodden community members while liquidity continues to get squeezed. It’s an unfortunate situation, but also a very real one.
So, are airdrops worth it on the path to the endgame of product-market fit?
The game Snakes and Ladders began life in India and was known as Moksha Patam. It was a morality-based game where ladders represented virtues, and snakes stood for vices. There were purposefully more snakes than ladders to illustrate how easy it is to fall prey to them.
The same can be said about the Web3 traction playbook. Some leaps take projects backwards.
The core issue with airdrops is that there is a disparity between this type of user’s intention and the kind of critical feedback needed to improve. Airdrop hunters are driven by financial gain and it’s in their best interests for a product to launch as quickly as possible. It’s easy to get stuck in a boiling pot of positive confirmation bias from users where one eye is always set on cashing out on a mainnet launch.
A focus on quality rules in a bear market, with the idea that volume will follow. Knuckling down and working to connect with a handful of informed users who will provide rich insight and critical feedback at the early stages of a build is likely worth a few thousand airdrop hunters.
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