Airdrop Gathering User Energy through the Sky

The following article is reprinted from the Coin World website:
Chainless
An interview with Mr. Zhu Weisha, the founder of Chainless, is as follows:
The originator of airdrops
Speaking of airdrops, we have to mention Gavin Andresen, who made important contributions to the development of Bitcoin. He is the successor of Satoshi Nakamoto and the second chief maintainer of the Bitcoin system. Under his leadership, the Bitcoin community polished the Bitcoin system, making significant improvements in usability and functionality. Gavin set up a website called Free Bitcoins. Users could receive 5 bitcoins simply by posting their Bitcoin payment address on the website. By November 2010, Bitcoin had already exceeded $0.5, and it seemed that airdrops were no longer needed. Therefore, the website was closed in early 2011, with a total of 19,715 bitcoins distributed. This can be considered the origin of cryptocurrency airdrops, aimed at promoting the popularization of Bitcoin. This principle has been inherited by subsequent airdroppers for project promotion. However, the market has changed, the product functions have changed, but airdrops have not kept up with these changes.


Lack of understanding of airdrop characteristics by project parties
Now, project parties often interpret airdrops as a marketing tool to increase project visibility and acquire customers. However, there is no uniform method or evaluation standard. Cryptocurrency issuance projects are usually in the early stages, and although the success rate of early projects is not high, speculative pricing errors exist in the early stages, often leading to a surge and overvaluation. Airdrops undoubtedly further inflate valuations after a surge in the number of customers, creating a bubble. Thus, there are professional speculators who specialize in airdrop speculation, profiting and then leaving, which often leaves nothing behind after the bubble bursts. In order to deal with these speculators, project parties set various thresholds. As a result, speculators may be countered, changing the nature of airdrops and fundamentally causing a loss of fairness and affecting the effectiveness of promotion.
The purpose of airdrops is to convert recipients into customers of the project. Currently, the conversion rate is very low, with the highest being less than 10%, and those with low conversion rates have almost no retention, meaning there are no active users. As a result, the cost of acquiring customers through airdrops is very high, reaching thousands or even tens of thousands of dollars, exceeding the average value of users in the market, diluting the value of existing users, and leading to a sharp rise and fall in the price of the currency.
The proportion of airdropped tokens is rarely over 20%, and the reason for this is related to Bitcoin. The Bitcoin system is the issuance system of Bitcoin, and miners are users who invest costs to obtain Bitcoin. However, for many platform or application projects, after switching to proof-of-stake (POS), they lose the meaning of currency issuance and become a ledger. The ledger is dependent on user usage, and the importance of users is equivalent to that of miners in the Bitcoin system. Thus, the token allocation involves three parties: the project development party, the ledger party, and the users. Users are the users, and their position is more important. So, who are our users? Who is most likely to be our users? It is clear that those in the cryptocurrency community are most likely to be our users, so airdropping to the cryptocurrency community is a natural choice. After the example of the Bitcoin airdrop, subsequent projects did not distinguish their projects from Bitcoin projects, and offering a small percentage of tokens as an airdrop was considered worth it, even if it was just for advertising. Advertising can increase project visibility, but it is not necessarily related to customer retention. The effect of airdrop advertising is very poor, with some projects having over 50% of airdropped tokens left unclaimed. Whose cryptocurrency wallet doesn’t have a few unknown airdropped tokens?
If you treat me with an advertising mindset, I will treat you with speculation, which is nothing abnormal. After receiving the airdropped tokens, they are immediately sold, and three days later, even the name of the project is completely forgotten. The direct purpose of advertising is to attract consumers to spend money, rather than giving money to consumers. Advertising is used to attract the impulse purchases of the majority of users and ultimately convert them into long-term customers, which only represents a few percent. Only projects in the cryptocurrency industry that are well-done can achieve a conversion rate of a few percent, according to the advertising industry.
The essence of token allocation is to be fair
If the token allocation by the project development party is too small, the ledger party is not happy, and the users, who have the least power, receive the smallest allocation. If the platform has no users, it has no value, creating a conflict of interest. What is fair allocation for a project? Generally, those who are important and contribute the most should receive more. According to common sense, the three parties should each receive a third, or the two parties should each receive half, to minimize the contradictions that arise. This is the fair distribution practice left by our ancestors. However, for many smart contract projects, they have no ledger party, yet they still receive a lot, which is not appropriate.
Bitcoin consists of two parties: the project party and the mining party (users), and the currency created by Satoshi Nakamoto as the project party is mined, which appears to be quite fair. His skill is that in the first cycle, half of the total tokens were distributed, and no one discussed the unfairness of this. When few people participated in the early stages, he received a large number of coins. Satoshi Nakamoto established a standard and took 5.42%. The rest was taken by users (miners), while also keeping records. Even though subsequent projects do not keep their own records, the market environment has changed, and Bitcoin no longer needs marketing, while new projects today do. So how much should the marketing cost be? Airdrops typically account for a small percentage, which can be seen as marketing costs. If project party distribution numbers plus marketing costs account for 10% of the total issuance, this would be reasonable and fair. Why distribute this way? Because the Bitcoin system is essentially an automatic system, and all the benefits are created by users (miners), who should receive the maximum. The greatest contribution should receive the greatest reward, in accordance with the principle of fairness. Each project is different, and the number of participants varies, so there is no uniform ratio. Decentralized base currency DW20 follows Bitcoin, with a distribution ratio equal to that of Bitcoin, thus minimizing debate. Meanwhile, the chainless token CLY is a platform token, with a distribution ratio based on cryptocurrency platform projects.
If it is not a currency issuance project, but a project that relies on user growth, how should users be organized? Airdrops are the simplest way to aggregate user power. This means the problem is transformed into how to distribute tokens fairly and reasonably to “shareholders,” or those who participate in the project. This is what “participation is mining” means.
From time-based token distribution to user-based token distribution
What is a fair distribution of tokens? The distribution method of Bitcoin tokens has been recognized by the market: tokens are distributed based on time. Obviously, the randomness of users entering the system is much greater than that of miners entering the system. The random entry of users cannot be described by an algorithm based on time; it should be designed based on an algorithm that depends on the number of people, which is constrained by the natural growth S-curve hypothesis. The decentralized base currency DW20 and chainless equity token CLY that we plan to issue will be distributed in 30 cycles, with the number of airdrops in each period decreasing, approximately halving every three cycles. We have an approximate six-month testing period, which is the golden time for airdrops. Once the coin is publicly listed, the issuance quantity of the coin will sharply decrease. This principle will be detailed in the chainless or DW20 whitepaper, which we will not repeat here. This makes the distribution of tokens relatively fair. In any case, the opportunity for early entry is the greatest. However, early customers are responsible for educating the market, and their work needs to be correctly evaluated. We cannot hold onto an opportunity and do nothing just because we were early. We do not have a human resources department (HR); all evaluations follow the logic of Satoshi Nakamoto – game incentives.
How to retain users
We have designed linear unlocking for our tokens, with linear unlocking taking place every day from the day of listing. The unlocking time varies for different customer levels. Gold customers are unlocked within 30 days, while unbranded users require 270 days. Gold customers must hold over 50 bitcoins for over two years and mostly adhere to Satoshi Nakamoto’s coin hoarding theory. Unbranded users need 270 days of learning materials and discussion forums. Our chainless website (chainless.hk) is currently a knowledge base, with nearly 90 bilingual articles in both Chinese and English, and there will be over 100 articles available during the public testing phase. As a resource for an early project, the abundance of content should be among the best in the cryptocurrency industry. The future chainless website (chainless.hk) will integrate the needs of the chainless community, through blogs and forums, hoping to keep users in the community. The purpose of the learning community is to change users who enter with a speculative mindset into investors. We hope the conversion rate will exceed 50%. From a psychological perspective, this is a very low figure, and the reasons for this can be understood by the users themselves.
Starting from seed users
Airdrops without purpose have a very poor advertising effect. In the early stages, word-of-mouth marketing is needed. We started distributing test coins during our private testing period, as part of a marketing activity called seed period promotion. The distribution quantity in our first cycle is far less than that of Bitcoin, so we will increase the incentive for the seed round during the early stage of the first cycle, while also testing the game system in our whitepaper. Because the system is imperfect, we emphasize “the credit of those around us.” In “Six Tricks for ‘Bitcoin’ Air to Money,” I mentioned that the early period of Bitcoin was destined to be an opportunity for programmers, not for most people. Where is the opportunity for one person? The opportunity is close by. This is the positional advantage of each of us. Who believes you in the early stages of entrepreneurship? Your relatives, your friends, almost unconditionally. We naturally need to give this credit a high return – a return outside of the algorithm, also known as the return of activity.
The token distribution of an airdrop project must adhere to Satoshi Nakamoto’s mining principles, whether in the seed stage or the public testing stage – competition and games. This is a kind of fairness. Only by being fair can we accumulate strength, and those who can quickly gather users can win the future.
The future belongs to the arrival of the main force
The second question is what to expect in the future? This is a question related to project design, which we will introduce in another article. Detailed information will be announced when the project is publicly tested.
The technology of cryptocurrencies has been developed for 14 years, and all the necessary technological innovations have appeared. Now, it is no longer possible to dominate purely based on technology. Product capabilities are more important than technological capabilities, and product capabilities compete with comprehensive innovation capabilities. In addition to product innovation, the chainless platform also includes incentive innovation, community innovation, and a summary of cryptocurrency theory, including a thorough analysis of cryptocurrencies, confirming that Satoshi Nakamoto is of Chinese descent – the only original creator of Bitcoin. These are all firsts in the cryptocurrency industry. Cryptocurrencies highly respect originality, and our ideas are publicly available, welcoming partners to catch up and build a tower together. We are very confident that even if partners dedicate themselves to learning, they may not be able to catch up, and if they don’t learn, they will definitely fall behind. Once again, cryptocurrencies cover a wide range of fields, including politics, law, economics, finance, stocks, currency, products, markets, and technology. Artificial intelligence is deep, while cryptocurrency is wide. The difficulty of broad projects does not lie in technology. Satoshi Nakamoto designed Bitcoin as a comprehensive innovation, using mature technology. The chainless system is a highly comprehensive innovation, and its introduction will greatly raise the competitive threshold of cryptocurrencies. Just as China’s reform began in the grassroots era, at the end of the 1980s, it finally triggered a wave of intellectuals going to the sea, and then the “idiots and melons” of that year disappeared without a trace. Cryptocurrencies will follow this path again. The behavior of the top 12 cryptocurrencies (Eleven, From the Perspective of 12 Head Projects, Cryptocurrencies) indicates that the era of cryptocurrency products has begun. The elimination match has begun. Are you the one in crisis, or are you the one in development? It depends on you.