TierDrop: Harnessing Airdrop Farmers for User Growth
Aviv Yaish, Benjamin Livshits

TL;DR
This paper proposes a novel approach to blockchain airdrops by leveraging farmers to generate activity and attract genuine users, challenging the traditional view of farmers as adversaries.
Contribution
It introduces a new perspective on airdrop strategies, suggesting that farmers can be harnessed to enhance network effects rather than solely being adversaries.
Findings
Farmers can sometimes be revenue-optimal to include in airdrop schemes.
Counterintuitively, giving tokens to farmers can strengthen network effects.
The results apply broadly to activity-based incentive mechanisms.
Abstract
Blockchain platforms attempt to expand their user base by awarding tokens to users, a practice known as issuing airdrops. Empirical data and related work implies that previous airdrops fall short of their stated aim of attracting long-term users, partially due to adversarial farmers who game airdrop mechanisms and receive an outsize share of rewards. In this work, we argue that given the futility of fighting farmers, the airdrop business model should be reconsidered: farmers should be harnessed to generate activity that attracts real users, i.e., strengthens network effects. To understand the impact of farmers on airdrops, we analyze their performance in a market inhabited by two competing platforms and two tiers of users: real users and farmers. We show that counterintuitively, farmers sometimes represent a necessary evil-it can be revenue-optimal for airdrop issuers to give some…
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Taxonomy
TopicsAerospace Engineering and Energy Systems
