Tomorrow I'll be discussing a new type of airdrop template that is potentially only something that can be done on Hive (or anywhere else that user accounts have actual community reputation attached to them, IE nowhere else).

Well... that never happened!

We've had wave after wave of crazy current events streaming into the space over the last week. Just recently everyone is freaking out over Deepseek AI being gifted to the world for free and "crashing the stock market". Oh no! Did they ruin your business model? Please.

In any case I finally have time to talk about this airdrop strategy.

There are many self-explanatory names that could be used to describe it.

• Friend drop
• Reputation drop
• Invite drop
• Exclusive drop
• Communist drop

Some of these names have better connotations than others.

For example I was originally considering titling this post "Communist Airdrop Strategy" or something of that nature just to troll people. People are so brainwashed they see the word "communism" and just immediately lose their shit and all rational thought. OMG China coin wtf! Clear your head of bias because it's kind of embarrassing.

Being dropped by "reputation" (merit) has the best connotation.
But these all describe the exact same mechanic.

Alright so how would this work?

It's a fairly basic idea. The duration of the airdrop lasts somewhere between a few weeks and a few months. Every day all eligible users can claim a portion of the drop, although there may be a requirement to do so, such as burning 1 HBD to @null to prove each user has at least a little skin-in-the-game and isn't freerolling.

Eligibility

The creator of the token is the first eligible member of the "fairdrop". From here eligible members can nominate and then vote in new members to the club. So the first wave is pretty much whoever the lead dev picks. The second wave would then be whoever that group votes in next, and the third wave would be whoever that group votes in, and so-on until the airdrop ends or no more nomination waves are allowed. So the entire thing is a bit of a pyramid, while at the same time not being a pyramid-scheme in any traditional sense.

Friends, friends-of-friends, friends-of-friends-of-friends

The interesting thing about a template such as this are the incentives that guide the psychology of invites. When the network invites someone into the ranks of this system, they are diluting their own stack, either by higher inflation or lower personal reward. The theory in play is that the person being added is a high value member, and their presence and support within the new network has a higher value than the dilution of the airdrop. This is actually the premise of all airdrops, but in this model the users themselves are controlling the invites, and subsequently where inflation is being allocated.

Static airdrop or static inflation?

A static airdrop model would allow any users to claim the same amount of coins on any given day, say 1000 coins. No matter how many users have been invited everyone can claim 1000 a day. The static inflation model only prints X amount of tokens per day, so more invites means less actual tokens can be claimed per person.

Both of these models are essentially the same on the technical side, and the only difference between them is the unit-bias our monkey brains give them. For example the static inflation model would theoretically lead to less invites and potentially higher quality candidates because every user can see number going down after every invite, which will inevitably lead many to vote "no" on the premise that they are somehow losing money. Whereas the other model psychologically incentivizes invites.

And I now realize that there is a third option here in which each wave gets an even bigger airdrop opportunity than the one before it. So maybe in the first week everyone can claim 1000 coins but the second week is 1250, and the third is 1500, and so on. This could incentivize users to invite more people than they normally would. Of course none of these theories have actually been tested; it's all just floating around in my head.

So how is this "communist"?

Only in the sense that no user within the community is valued higher than any other user. Everyone gets the same opportunity to claim the airdrop daily and there is no advantage to having more Hive stake or anything like that. In fact a full communist variant of this airdrop would be that users can't claim daily and everything happens at the end in one lump sum where every "citizen" gets the exact same stack. I don't necessarily favor this idea but it would be an option for devs to pick.

I wrote this post a year ago (time flies). Hive and DEFI protocols also have a huge advantage in that these airdrops can be locked forever and not allow the lucky minority to dump them immediately. This is done through various yield mechanics. You might never be able to sell the principal airdrop, but you could be receiving 10% yield on it indefinitely.

This strategy forces even people looking to extract maximum value to log into the protocol every once and a while and take a look at what's going on, rather than immediately dumping everything and never returning.

Bonus airdrop

There could also be the opportunity to double one's airdrop by providing liquidity. An airdrop printed out of thin air has less value if it isn't providing liquidity to the market. Unfortunately tokens printed out of thin air can not create liquidity. An airdrop of this nature would be permalocked into a single staking pool and sit there forever farming whatever yield is offered there.

Offering the bonus incentivizes liquidity.

For example let's say someone farmed 100k tokens during the Frienddrop phase. After this phase has ended they may be offered the opportunity to allocate Hive or HBD to the liquidity pools in exchange for even more airdrop (in this case up to but not exceeding the 100k amount they originally farmed). These LP tokens would then be locked for something like a year to provide bootstrap liquidity (while also earning liquid yields).

Another option could be the ability to unlock and sell the airdrop principal. Want to sell your airdrop? Well then you need to pair it to HIVE or HBD for a year in the LP and those LP tokens will unlock after 1 year. These are the kinds of tools that DEFI has provided to us that we really aren't using to our advantage whatsoever.

So why is this strategy better than stake-based or use-based?

Well, first of all, usage-based airdrops are totally invalid and proved to be a one-trick-pony. It really only worked out for Uniswap because nobody saw it coming. Once Uniswap did it and that model got cloned everyone was farming airdrops with the sole intention of dumping everything. Anyone who still believes this is an acceptable model should remove themselves from the tokenomics industry.

And then there's stake-based, which basically puts the users who are in charge of the parent chain in charge of the child chain. The vast majority of the time this is not what people want. Because why are you making a new token if you think the old token has already been perfected? Stake-based airdrops lead to the exact same blind-dumping that use-based airdrops do. We've seen this play out dozens of times. Even Vitalik is famous for just dumping tokens that are gifted to him in this way. A more intelligent focus-fired reputation system is going to work a lot better.

So what's the drawback?

Nepotism I suppose. People inviting their friends and only their friends and then trying to call the thing "decentralized". Personally I don't view this as much of a threat, as anyone can see the original distribution on the public blockchain. It would be very obvious if the airdrop was designed in good faith or not. Those who don't like the results shouldn't participate; it really is as simple as that.

51% attack

Assuming it requires a 51% threshold to invite new users into the system, it stands to reason that if 51% of the airdrop gets flooded by bad-actors or bots the entire structure becomes completely busted and automatically corrupted by Sybil attack. I don't see how something like that could actually happen... especially on a network like Hive where everyone knows everyone to some degree... but the theory of this attack is worth mentioning regardless.

Conclusion

An intelligent airdrop is almost always going to be more effective than a random one based on easily gamed metrics and claimed by users who want nothing more than to extract value. I hope to see this theory put to the test, but thus far the industry seems to be blindly doing the same thing over and over again hoping for a different result, or in the current cycle just giving up and printing tens of thousands of worthless memecoins.

Hive is one of the only chains that can accomplish a reputation-based airdrop such as the one described here, because no other chain has any infrastructure whatsoever to distinguish good actors from the bad ones. Meanwhile we've all been building up our rep while the rest of the world remains woefully ignorant to the importance of such non-kyc strategy.