Blockchain ID platforms could shift airdrops from risky to valuable

The role of airdrops in the blockchain ecosystem has come under the spotlight after Vitalik Buterin voiced his support for the cause, but what role do they actually play?

Titus Capilnean, Vice President of Go-To-Market at Civic, told crypto.news that airdrops are a powerful tool for building and maintaining a loyal community within blockchain projects. In response to Vitalik Buterin’s recent post supporting airdrops, Capilnean highlighted the significant risks posed by malicious actors exploiting these distributions.

“Airdrops are a great community building tool to recognize and reward valuable contributions to a project.”

Titus Capilnean, Vice President of Go-To-Market at Civic, told crypto.news:

In his original post supporting airdrops, Buterin suggested that airdrops could serve as an ideal testing ground for blockchain-based identity frameworks, addressing common challenges and improving these systems in real-world scenarios.

The Ethereum (ETH) co-founder also said that airdrops could go beyond simple token distribution and become a tool to increase community engagement and project security as the first use case for identity systems.

Airdrops are a fascinating first use case for ZK/blockchain based identity/credential/attestation frameworks. The goals of an airdrop are to:

(i) to distribute to members of the community [and not randos who will all immediately sell]
(ii) reward contributions to the project
(iii) be…

— vitalik.eth (@VitalikButerin) August 28, 2024

In most cases, airdrops are designed to reward genuine community members, recognize valuable contributions, and ensure a fair, but not unequal, distribution of tokens.

One of the most popular token distributions this year was the Dogs (DOGS) airdrop, which disrupted Telegram Wallet and some leading exchanges due to its large amount of traffic.

Another long-awaited airdrop was the Hamster Combat token. After months of delays, the team behind the Telegram mini-game announced that the tokens will be distributed on September 26.

Regarding airdrops, Buterin says part of the appeal is the idea of ​​offering discounted token sales as an alternative to traditional airdrops. In this model, community members can purchase tokens at discounted rates based on their contribution level or verified membership, a key tool used by many airdrops.

Capilnean, in turn, emphasized that Sybil attacks can seriously undermine a project’s goals and target airdrops. In March 2023, a Sybil attack was used to target the Arbitrum airdrop. Such attacks lead to misallocation of resources and can damage a project’s reputation and the value of its tokens.

Capilnean supported Buterin’s view that blockchain-based identity frameworks could be effective in mitigating these risks.

“By improving these systems, blockchain-based identity solutions can be used to effectively prevent malicious actors from gaining advantage.”

Titus Capilnean, Civic’s VP of Marketing Transition, talks about blockchain-based identity platforms.

If projects implement this practice, they can ensure that their token distributions are targeted and secure, reducing the likelihood of exploitation. In turn, these airdrops can serve as testing grounds for these frameworks.

Despite the benefits, Capilnean cautions that integrating identity solutions into airdrop processes can create some complexities. Projects, especially in their early stages, may struggle with the technical challenges of effectively deploying these systems.

“By leveraging these frameworks, we can transform airdrops from a risky venture to its original purpose as a strategic tool for community building and project growth.”

Titus Capilnean, Civic Vice President of Marketing, added:

However, industry experts remain hopeful that blockchain-based identity systems can transform airdrops from a risky venture into a valuable tool that fosters community growth.