Crypto Airdrop Hunting: The Gamble and What it Means for Blockchain Devs
• Airdrop hunting refers to the unsolicited distribution of tokens for marketing purposes or as a reward for network participation.
• Airdrop hunters aim to make money by farming tokens from airdrops, hoping they will become valuable.
• Recent on-chain activity has revealed that airdrop hunters have consolidated millions of dollars worth of tokens from various airdrops.
What is Airdrop Hunting?
In the crypto space, the term “airdrop” refers to the unsolicited distribution of tokens, usually for marketing purposes or as a reward for network participation or contributions.The first recorded crypto airdrop took place back in 2014 when Auroracoin handed out its native cryptocurrency, AUR.Another well-known airdrop was that of decentralized exchange Uniswap, which gave its UNI governance token to its users in 2020. In total, over 250,000 accounts received 400 UNI each.
Risks and Exploitation
While airdrops may have encouraged some to be more active on blockchain networks, Chris Bradbury, CEO of decentralized finance (DeFi) platform Oasis.app, told Cointelegraph that users have realized how airdrops can be exploited, which has led to the phenomenon of “airdrop hunting.”Airdrop hunters aim to make money by farming tokens from airdrops, hoping they will become valuable.
Recent Examples
One recent example occurred during Arbitrum’s ARB airdrop, with on-chain activity revealing that airdrop hunters consolidated $3.3 million worth of ARB from 1,496 wallets into just two wallets; one wallet received 1.4 million ARB from 866 addresses and another wallet received 933,375 ARB from 630 addresses – both were worth around $1 million at the time each respectively.
On March 20th Lookonchain revealed that six specific people had gotten nearly every massive airdrop in crypto including: $ARB ($1M), $OP ($1M), $BLUR ($200K), $SOS ($150K), $LOOKS ($90K), $ENS ($50K).
Pro Hunters & Scripts
Bradbury stated that “pro-airdrop hunters will use scripts” to automate their activities and take advantage of newly listed coins at scale with minimal effort and cost – all while increasing their chances of successfully acquiring lucrative returns via token appreciation over time.
Final Thoughts
Overall it’s important to note that although there are potential opportunities associated with participating in an Airdrop hunt such as potentially receiving free cryptocurrency or getting part ownership in an exciting new project – investors should always do their own research before deciding if it is suitable for them personally given all associated risks involved such as price volatility and liquidity constraints etc..