What is airdrop farming?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
Airdrop farming means using a protocol in advance in the hope that it will later distribute tokens. Nothing is promised, the criteria are set after the fact and then changed, and the gas and fees you spend are gone whether or not a distribution ever happens.
Key points
- Using a protocol early in hope of a later distribution
- Neither the distribution nor its criteria are fixed in advance
- Criteria are decided afterwards and revised
- Gas and fees spent are not refundable
Definition
Interacting with a protocol that has not yet issued a token, in the expectation of qualifying for a future airdrop — building a usage history of swaps, transfers or liquidity provision.
The behaviour exists because several protocols have distributed tokens to prior users at launch. Seeing that, people began using services that looked likely to issue next. That is the factual description of the practice.
The structural problem is that no criteria exist beforehand. The team sets them at issuance, and whether transaction count, volume, duration or chain coverage will matter is unknowable in advance. Published criteria have also been revised afterwards in response to abuse, so there is no target to aim at.
The costs are certain. Gas on every transaction, bridge fees and swap slippage are paid whether or not anything is ever distributed. The candidate protocols also tend to be new, which brings contract bugs and withdrawal freezes. Uncertain reward against certain cost and technical risk is the defining shape of this activity.
Watch out for
- · 'Guaranteed eligible' claims cannot be true while distribution is at the team's discretion
- · Fake claim pages asking for a signature are extremely common
- · In Japan, tokens received can be taxable at the time of receipt