Author: Asher Zhang , BitPushNews
Regarding LayerZero's anti-scam mechanism, we have published an article titled "LayerZero, which is about to issue a coin, starts "reporting on rumors and events". What "dangers" and "opportunities" will it face in the future?", stating: "This kind of mutual investigation is just like the "reporting on rumors and events" adopted by ancient emperors for fear of blocking the way of speech. Judging from many lessons in history, this move may not be perfect." With a report on 470,000 suspected witch addresses submitted to LayerZero, the market's discussion and criticism of this anti-scam mechanism reached a high point. What feedback and dissatisfaction does the community have? What measures has the project taken to deal with this? Coincidentally, the recent popular project Taiko directly adopted an opaque airdrop mechanism, which has also encountered a lot of criticism in the market. What changes are happening to the once widely praised Web3 airdrops? Perhaps it is time to reflect on airdrops, a product of the Web3 era.
The conflict of interests behind LayerZero's anti-slip mechanism
In a sense, the current debate in the community about LayerZero is essentially a dispute over interests, and LayerZero's anti-scam mechanism cleverly uses human nature to try to counter it. When LayerZero touches the cheese of the scammers, it will inevitably lead to an unprecedented war of words.
LayerZero is a well-known full-chain interoperability protocol with a high valuation. Investors include Multicoin, Binance Labs, a16z, Sequoia Capital and other well-known crypto investment institutions. Therefore, the Web3 army has long been eyeing this "lamb" to be slaughtered. WOO X Research, the analysis department of WOO X, estimates that the value of LayerZero's upcoming airdrop will be between $600 million and $1 billion. Conservatively speaking, assuming that TGE is 4 times the valuation of the previous round and the initial circulation is 15%, Layerzero estimates that the market value of TGE is estimated to be $1.8 billion and the FDV is $12 billion. The airdrop value is estimated to be $600 million, which translates to a value of between $750 and $1,500 per user. Optimistic outlook: Assuming that TGE is 4.5 times the valuation of the previous round and the initial circulation is 20%, Layerzero estimates that the market value of TGE will increase to $2.7 billion and the valuation is $13.5 billion. In this case, the airdrop value is expected to increase to $1.08 billion, with the average value per user ranging from $1,350 to $2,700.
The huge airdrop worth $600 million to $1 billion is very profitable, so how could the army of scooping up money miss it? However, LayerZero does not want the army of scooping up money to scoop itself up. In essence, LayerZero has three main strategies: "self-exposure", "trial", and "mutual exposure". Among them, "self-exposure" can retain 15% of the airdrop allocation, those who are screened out will not receive airdrops, and mutual exposure can obtain 10% of the airdrop share.
Judging from the results, Layerzero screened out a large number of wool users, but it was obviously not enough. According to LayerZero CEO Bryan Pellegrino, more than 3,000 witch reports and 30,000 complaints were received within a few hours of the start of the bounty campaign. Bryan Pellegrino then said: It is estimated that only 6.67%-13.33% of the 6 million addresses are eligible for airdrops; 90%-95% of the reports are valid, or even more, and of course bad reports are quickly "discarded". Nothing is perfect. On June 5, Bryan Pellegrino further posted on the X platform: "I hope to have another two months to deal with the inspection of witch reports. There are some very obvious large witch clusters, including tens of thousands of addresses, but due to time reasons, I have to give up checking them because they are extremely unlikely to meet LayerZero's final airdrop qualifications, but I am sure they may get other airdrops. However, it should be noted that this is just my personal venting because I don't have that much time. LayerZero's TGE timeline remains unchanged."
Amidst the uproar, the distinction between right and wrong
In LayerZero's view, the best users should receive airdrop rewards, and these best users should be the most "persistent" users, and the so-called "persistence" is defined as those users who are most likely to continue to use LayerZero in the future or follow their past usage habits. More specifically, LayerZero is trying to knock out "fleecing" agencies. LayerZero stated its attitude: to protect niche users, and the main target is large witches, which are essentially fleecing studios. LayerZero said: "Witch self-reporting" is not aimed at individual users, but at large witches, and LayerZero employees are prohibited from participating in airdrop applications, and violators will be fired. LayerZero's inspection efforts will also be very strict to prevent "hunters" from making random reports in order to increase their profits and accidentally hurting real users.
The LuMao Studio believes that they paid real money to help the project improve data and test performance, but were later abandoned. Under the mutual exposure system, chaos began to emerge. Some LuMao Studio employees chose to resign and report internal accounts, the address of a large airdrop holder of a certain project was reported, and there were also users who targeted large holders/LuMao KOLs to report witch clusters. There was even a rumor in the market that a security agency submitted 470,000 suspected witch addresses to Layerzero at one time.
KOL Marco said that "mutual reporting" has not only become a game between the project and the studio, but also a struggle between the studio and individual users. Since 90% of the airdrop tokens of each account will be returned to the airdrop pool for each successful report, it also means that the airdrops received by users will increase, and "mutual reporting" seems to be a weapon for ordinary shills to promote "shill justice".
Daoshuo Blockchain said: I think the occurrence of such events as Layerzero is foreseeable from the trend point of view. From the perspective of the project side, as the startup cost becomes higher and higher, token airdrops will become more and more cautious. The qualification of airdrops will become more and more stringent as time goes by. From the user's perspective, whether it is a full-time wool party or an ordinary retail investor, the profit obtained from the wool-pulling method will become increasingly thin, and may eventually reach a certain level where the income is very close to the input cost. Getting rich overnight by plundering airdrops will definitely become history. I agree that the project side catches "witches", but I am very disgusted by the way of reporting and exposing to catch "witches".
Reflections on the Industrialization of “Airdrops”
In a sense, wherever there is a chance to get rich overnight, people will flock to it. This was the case with the ICO in 2017, and it is also the case with the current airdrop. However, from the mutual explosion of Layerzero, we can see a phenomenon: airdrop is moving towards industrialization and professionalization, and this phenomenon actually has obvious drawbacks. Before the project issued the tokens, a large number of airdrop institutions participated, creating a false prosperity on the chain. After the tokens were issued, the airdrop institutions sold them in large quantities, causing the project tokens to fall sharply, which discouraged many investors. This may also be the reason why many well-known projects in this round fell as soon as they were launched.
From the perspective of trend development, the game between project owners and airdrop institutions will continue, and the core lies in the balance of interest distribution. From the perspective of project development, a large number of traders are indeed needed to test network performance in the early stages of project development, but their selling is indeed not conducive to the later stages of the project. Project owners may try to retain some profits; in addition, linear release of airdrop tokens may also be a way to reduce short-term selling pressure.
In general, the chances of getting rich overnight by taking advantage of airdrops will become fewer and fewer, and a balance of interests may be found between project owners and profit-taking agencies; and the two may also try to bring their previously under-the-radar behaviors into the open in an open and fair manner.
