# The Operational Cost of Ethereum Airdrops

## TL;DR

This paper analyzes the operational costs of Ethereum airdrops, demonstrating that cost savings of up to two times are achievable with specific smart contract features, and provides a simulation framework for benchmarking.

## Contribution

It introduces a simulation framework to compare Ethereum airdrop methods and identifies cost-saving strategies requiring specific smart contract provisions.

## Key findings

- Cost savings of up to two times are possible.
- Total costs are broadly linear in the number of recipients.
- Pull-based approaches impose higher costs on recipients.

## Abstract

Efficient transfers to many recipients present a host of issues on Ethereum. First, accounts are identified by long and incompressible constants. Second, these constants have to be stored and communicated for each payment. Third, the standard interface for token transfers does not support lists of recipients, adding repeated communication to the overhead. Since Ethereum charges resource usage, even small optimizations translate to cost savings. Airdrops, a popular marketing tool used to boost coin uptake, present a relevant example for the value of optimizing bulk transfers. Therefore, we review technical solutions for airdrops of Ethereum-based tokens, discuss features and prerequisites, and compare the operational costs by simulating 35 scenarios. We find that cost savings of factor two are possible, but require specific provisions in the smart contract implementing the token system. Pull-based approaches, which use on-chain interaction with the recipients, promise moderate savings for the distributor while imposing a disproportional cost on each recipient. Total costs are broadly linear in the number of recipients independent of the technical approach. We publish the code of the simulation framework for reproducibility, to support future airdrop decisions, and to benchmark innovative bulk payment solutions.