The majority of people following ICOs and the crypto sphere know what an airdrop is. But there is a growing number of industry experts who believe that the mechanism used for the mass distribution of tokens could be improved on and the trend right now seems to be the leaning towards the ‘smartdrop’.
David Johnston, founder of Yeoman Capital and established crypto investor brought The Smartdrop Model to public attention in a July post on Medium. He wrote it in collaboration with Mark Thorsen, Henry Liu, Erik Kuebler & Grace Torrellas, and Kyle Samani, Tushar Jain and Nathan Johnston were the technical reviewers.
In the Medium post, the authors argue for a more targeted approach to airdrops, which they describe as “dumping tokens to everybody with an ethereum address.”
How to target the community
Johnston told CoinDesk this means, “intelligently targeting the recipients of an airdrop and giving away a meaningful amount of value,” with the objective of attracting real users to participate in “the early bootstrapping of a system.”
Some people have already been doing this and indeed Johnston acknowledged, “he merely recorded best practices and gave substance to this idea that a lot of people have, specifically pointing to projects Dfinity and Polymath as examples of projects that have conducted smartdrops.”
For example, in June, Dfinity announced a token airdrop valued at $35 million “to community members that undergo (and pass) a know-your-customer (KYC) and anti-money laundering (AML) verification process.”
And, Crypto token management company TRM Labs, recently launched a SmartDrops platform that allows projects to distribute tokens to select users and offers issuers analytics.
Why airdrops aren’t building the right community
Paul Hainsworth, the CEO of Open Garden believes the current airdrop model is “not a useful way to actually build your real network,” and explained why: “Most airdrops are really about giving a token to speculative investors so that they’ll go cash it out on an exchange. It’s really about trying to demonstrate to exchanges, ‘hey we’ve got a lot of wallets, we’re going to bring you a lot of people, and so let us list our token on your exchange’.”
Johnston also believes ICOs should “go big or go home” with a smartdrop: “People today are airdropping 1 percent of their tokens, and it’s not really meaningful,” he said. “I think you have to do something more serious. Think about 25 percent of the tokens or 50 percent of the tokens or 60 percent of the tokens that’ll go out to the community, so that the founders are a minority … but they’re not dominating the community.”