Who Are Airdrop Hunters and How Much Do They Earn

Airdrops are still widely used by DeFi and NFT platforms to increase the community and create demand for new utility tokens.

Some projects reward users generously, without having to perform any complicated actions. But sometimes the criteria for selecting participants are quite strict, require a lot of time and significant costs for transaction fees.

In this article, we will look at the main types of airdrops, their pros and cons, platforms for tracking potential hands, and possible pitfalls. We will also find out who drophunters are and how much they earn on average.

What Are Cryptocurrency Airdrops and Why Do We Need Them?

Airdrops are free giveaways of tokens among certain users of cryptocurrency platforms. This is a common tactic in the blockchain industry aimed at drawing attention to projects.

To participate in the coin giveaway, users usually need to fulfill various conditions and actions. For example, to be early participants in the ecosystem, to hold certain crypto assets in a Web3 wallet, to be subscribers of the project on social networks.

One of the first and largest airdrops in the industry was held by Uniswap. On September 17, 2020, the leading non-custodial exchange credited UNI governance tokens among over 250,000 addresses.

Everyone who used the platform before September 1, 2020 received at least 400 UNI (~$2200 as of July 2, 2023). 250,000 UNI were credited to about 250 addresses, including active users of the exchange, large liquidity providers, and Unisocks (SOCKS) traders.

Soon after the famous airdrop from Uniswap, many projects began to use similar tactics, including 1inch, Opium Protocol, Lido, Mask Network, dYdX, Axie Infinity, and Ethereum Name Service.

Gradually, the requirements for participants in the giveaways began to tighten in order to avoid abuse. For example, the ParaSwap project "crossed out" those who resorted to the Sibyl attack or, in simple words, used multiple accounts to maximize the amount of "easy money." Priority was given to users who used the platform regularly and conducted swaps with partner projects. Such a "dropout" caused a wave of indignation in the crypto community.

However, the trend has developed further. This is evident in the growing number of so-called "drophunters" — those who track potential token airdrops of new projects and are active in their respective ecosystems. Some of these market participants operate hundreds of Web3 wallets in hopes of maximizing revenue.

Pros and Cons of Airdrops

Let's list the positive aspects of participating in airdrops:

• the opportunity to get free tokens (large projects supported by eminent venture investors can accrue tokens worth $10,000 or more to active ecosystem participants);
• Distributed coins are usually liquid from day one, as they quickly appear on DEXs and in the listings of centralized exchanges;
• To receive tokens, simple actions and conditions are usually required: be an early user, make several interactions with the platform (recently, the volume of transactions is often taken into account);
• Active participants in the ecosystem can receive impressive sums that significantly exceed the costs.

There are also negative aspects:

• there is no guarantee that the user will "get into the giveaway", even if the user started working with the platform on the day of its launch;
• some ambitious projects like Sui may deny rumors of a token giveaway shortly before the mainnet launch, causing a lot of anger among drophunters;
• a lot of scams, the spread of phishing;
• Most projects charge tiny amounts that do not even cover the fees spent by users;
• strong pressure on the price of the token, as many "easy money" recipients seek to sell coins almost immediately after listing;
• Time frame for receiving tokens (stamps can be available for, for example, three months).

Types of Airdrops

There are several main types of token airdrop types:

Retroactive Airdrops

They happen when an existing blockchain project announces the launch of a native token. In such cases, early adopters of the protocol who have shown some activity are usually rewarded. The level of the latter largely depends on the scale of speculation around the possible launch of the token, as in the case of zkSync.

Historically, airdrops of this type have been the most generous. On the other hand, there is no guarantee that even relatively active users will not drop out — not every new project plans to distribute the token among a wide range of market participants.

Examples of retroactive airdrops include the aforementioned Uniswap and Ethereum Name Service, as well as Optimism.

Airdrops for Holders

In this case, the distribution takes place among holders of various tokens. The latter are on public blockchains and, therefore, developers can customize airdrops according to certain criteria. Such giveaways, like most others, serve marketing purposes and are designed to increase the awareness of projects in the crypto community.

Examples of such airdrops:

• In August 2021, Yuga Labs distributed 10,000 tokens ($270,000 at the time) to NFT holders of the Bored Ape Yacht Club (BAYC) collection;
• Stellar — where XLM is supposed to be credited to bitcoin holders.

Bounty Airdrops

Such giveaways involve the completion of various simple tasks, usually related to the promotion of the project. For example: subscribing to a social media account and/or newsletter, joining a Discord group, etc.

Points are awarded for performing such simple actions. Before branding tokens, you often need to fill out a form and provide a wallet address.

Various tasks in the testnet are offered by the Venom project. At the end of each of the completed stages, the user issues an NFT.

Exclusive Airdrops

To conduct such giveaways, blockchain projects enter into partnerships with other platforms. The well-known analytical service CoinMarketCap has already conducted more than 400 campaigns according to this scheme.

Exclusive airdrops usually contain elements of bounty programs, providing simple tasks and providing a wallet address. Sometimes such giveaways involve a lottery, as a result of which a limited number of participants receive tokens.

How Much Do Airdrop Hunters Make?

Airdrop hunting is, in a sense, a pretty straightforward activity. Its essence is to identify projects that can issue tokens for early adopters of the platforms and interact with the latter for a while. The use of significant amounts of funds in ecosystems increases the chances of obtaining the coveted coins, as projects often pay attention to turnover and the number of transactions.

However, many people associate airdrop hunters with those who abuse coin giveaways, create a lot of accounts and wallets, and conduct a lot of operations that make no economic sense.

For example, after the "fat" Arbitrum airdrop, two market participants consolidated $3.3 million worth of ARB tokens received from 1496 wallets on two addresses.

On March 20, an analyst at Lookonchain discovered six "smart drophunters" participating in almost every major token giveaway.

Chris Bradbury, CEO of the Oasis.app platform, in a conversation with Cointelegraph, expressed confidence that professional hunters of "easy money" will use scripts to consolidate many different addresses.

X-explore researchers and journalist Colin Wu are generally positive about the new trend. According to their observations, most of the drophunters are early adopters of Ethereum. They are much more active on NFT platforms and DEXs, engaged in trading, and remain involved in projects after receiving tokens.

For example, over 95% of addresses from Premium Group It is in the top 10% in terms of trading volume on decentralized platforms. For NFT marketplaces, this figure is 68%. Premium players conduct an average of 50 Ethereum transactions per month, while regular members conduct 21.

After the airdrop, the level of hype around the ecosystem drops. However, the most advanced airdrop hunters continue to show relatively high activity for some time. This, in particular, was noticeable after the distribution of OP tokens from the Optimism project. The distribution strategy of the latter is well thought out and focused on the long term.

 

"The results show that many previously inactive premium hunters have become interested in OP after receiving the airdrop, as well as actively interacting with various ecosystem projects," the experts noted.

According to them, well-thought-out giveaway rules can have a positive effect on drophunters. A developed, trustworthy ecosystem is also important.

According to the study, the average income of a standard airdrop hunter was $9,384 per address (median is $6,497). For the premium segment, the corresponding figures were $18,935 and $14,288.

But experts X-explore and Colin Wu do not deny the existence of abuse. According to their estimates, up to 20% of the volume of the Arbitrum airdrop in March was claimed by so-called "free riders" using the Sibyl attack. In most cases, drophunters periodically conduct transactions that make no economic sense for small amounts.

Where to track airdrops?

Quite a lot of services have already been created to make the work of drophunters easier and save time. One of these is Alpha Drops. The site publishes information about projects from which you can expect to distribute tokens with some probability.

For example, the Airdrops section provides a list of "early" projects that have not yet issued a native token.

In the Faucets section, there are "faucets" for obtaining tokens, which can be used to be active on various testnets.

The blog presents Pallas' cats with a description of projects, algorithms for interacting with ecosystems, and other steps that increase the chances of getting "easy money".

The founder of Alpha Drops is Aram Barzani from the Iraqi city of Erbil. According to him, the strategies presented on the site are largely based on successful airdrops, which took into account the volume of transactions and the number of interactions with smart contracts of applications.

According to Barzani's estimates, 10-15% of new projects are airdropped. The founder of Alpha Drops himself takes a cautious approach, using only a few wallets.

As the expert explained, many projects track clusters of interconnected addresses. This is done in order to exclude unscrupulous drophunters from the list who are trying to "cheat the system" and maximize revenue.

There's also a Earn.fi service, which is a kind of search engine for identifying potential giveaways.

After entering the Web3 wallet address, the platform provides information on unclaimed airdrops that the user may have forgotten about. Current DAO voting across various ecosystems is also displayed, increasing the likelihood of receiving "easy money" in the future.

The Learn section provides strategies for obtaining potential airdrops, analytics on various projects, training materials, and links to useful resources.

DappRadar, an aggregator of decentralized applications, also has a dedicated section. Users can participate in token giveaways in a few clicks — just by entering their email and connecting a Web3 wallet.

The service works by analogy with CoinMarketCap — airdrops are usually like a lottery, which means that they do not guarantee a win for everyone.

The Airdrops.io provides step-by-step instructions for current and potential token airdrops. At the end of the campaign, the platform publishes basic details about the campaign, including the cost of the distributed funds.

The AirdropsAlert aggregator classifies coin giveaways into various categories: DeFi, NFT, new, past, upcoming, etc. The number of subscribers to the service's newsletter exceeds 400,000.

AltcoinTrading also provides information on the most promising and long-awaited airdrops, bounty programs, and exchange promotions.

In addition to initial coin offerings, the ICOMarks website also publishes information about current airdrops.

The service provides information about the timing of giveaways and, importantly, roughly estimates the amount of funds to be distributed. Step-by-step instructions for users wishing to become participants in potential airdrops are also included.

AirdropBob is a relatively small airdrop aggregator that publishes information about relatively significant events for the industry.

An interesting section is Calendar. It presents campaigns, including stock exchange campaigns, which are nearing the end of their expiration date.

X-explore researchers and journalist Colin Wu provided a list of the main goals of drophunters based on on-chain activity:

• DeFi: Uniswap, SushiSwap, 0x, Metamask Swap, Balancer, 1inch, Paraswap, Aave, Rarible, InstaDApp, dYdX, Compound;
• NFT: OpenSea, Blur, LooksRare, X2Y2, Foundation;
• L2 solutions and cross-chain protocols: Arbitrum, Polygon, zkSync Lite and zkSync Era, Optimism, HOP, Starknet;
• dapps: DeBank.

Pitfalls of airdrops

Chris Bradbury is convinced that drophunters should pay attention to all sorts of risks, especially when interacting with new, untested projects.

 

"The nature of retroactive airdrops is that you often use new protocols that haven't stood the test of time. And in most cases, you have to deposit your assets into these protocols, exposing yourself to the risk of losing funds due to bugs or hacker attacks," the expert explained.

Also, according to him, the cost of interacting with various ecosystems can exceed the cost of distribution. Especially if we are not talking about "high-end protocols".

 

"Airdrop hunting is not an exact science," said an expert in the "easy money segment" under the nickname FastLife.

He added that such activities require a lot of time and patience.

Bradbury noted that sometimes it is not easy to perform all the necessary activities - protocols are inventing "increasingly innovative" criteria for selecting coin recipients.

 

"If you do a lot of things that don't meet the requirements, it can eventually lead to losses. And most protocols are now trying to come up with innovative ways to identify the recipients of a giveaway. So there is an increased likelihood of wasting time and money on something that will not be counted," he explained.

To sum up, let's list the main precautions when interacting with ecosystems in the hope of "easy money":

• Projects should be carefully and comprehensively scrutinized to avoid fraud;
• the wallet should only be connected on trustworthy platforms, checking the URL to avoid phishing;
• Never share your seed phrase with anyone – no project can require you to do so;
• For drophunting, it is advisable to use a separate wallet with an insignificant amount of funds (this is especially true when interacting with many little-known platforms);
• Never send money to anyone. There are no costs associated with receiving rewards during the airdrop, except for transaction fees when interacting with the smart contract.

Findings

Airdrops are an interesting phenomenon that is unique to the crypto industry. It's no wonder that generous giveaways have given rise to a lot of "easy money" hunters.

The latter enthusiastically explore new ecosystems, testing often very "raw" DEXs and cross-chain bridges at their own risk. Thanks to such activity, decentralized platforms receive such important liquidity. The issued governance token is then used in votes on various protocol development issues initiated by the DAO.

In order to prevent abuse, the projects provide for more and more elaborate and sometimes intricate rules and criteria for the selection of participants. In most cases, just a few transactions are no longer enough, as was the case with retroactive airdrops of yesteryear.

Market participants should not forget about the risks, keeping in mind that there are many scammers in the industry. Hacks, exit scams, and other troubles are likely.

Therefore, before participating in airdrop-related activities, you should carefully study projects and not interact with unverified platforms. You also need to be prepared to spend money on transaction fees.