Airdrops have become the bread and butter of the crypto world, and for good reason.
They are an indispensable marketing tool for promising projects that want to draw attention to their ecosystem.
Done right, distributing free tokens to the public can help increase demand and unlock great benefits for recipients. After all, if these altcoins end up on major exchanges later, their value could skyrocket.
But, unfortunately, shortcomings began to appear. These campaigns reach not only enthusiasts who believe passionately in what the project has to offer, but also “airdrop hunters” who are simply looking for ways to make a quick profit.
Airdrop hunters usually want to sell the tokens they received for free as soon as they can. And for cryptocurrency projects in their earliest stages, this can be bad news – undermining the carefully cultivated tokenomics and causing the coin’s value to drop.
The current bear market has also revealed another problem. Many projects are now postponing the timing of unlocking new tokens, waiting for the economic climate to improve slightly. And while this is usually in the best interests of the project and its investors in the long run, this can be disappointing news for those who won tokens in an airdrop. Why? Because they can no longer freely trade or liquidate the digital assets they are entitled to.
So… what’s the answer? Can airdrops be revived by fixing some of the shortcomings that have emerged in recent years? And is there a way to benefit hodlers even if they haven’t received tokens yet?
How NFTs can shake up airdrops
Right now, projects are trying to balance between getting publicity and using marketing strategies that can damage their ecosystems. How can you get new users to sign up for a Telegram or Twitter account to be eligible for the giveaway and encourage them to stay involved in the community long term?
This is where non-fungible airdrops, also known as NFAs, can be the answer. And, as you might expect, they include some of the technology that NFTs rely on to create a “win-win” situation for both projects and airdrop winners.
The purpose of the NFA is to represent the true value of the giveaway reward when the initial DEX offering (also known as IDO) occurs. This is achieved through a model that is not too different from a futures contract – an agreement to buy or sell assets that will be activated in the future.
The only difference is that the NFA issuing project owner promises to deliver the token or other digital assets on a future launch date. And since each airdrop winner ends up with different rewards under this model, there is a one-of-a-kind gift that cannot be replaced.
In this scenario, a non-fungible airdrop would have a mechanism that allows holders to claim their tokens when the project launches—essentially locking in the value of future tokens. Alternatively, you can make instant profits by trading this NFA on a peer-to-peer marketplace. What makes this concept so attractive is that those who opt for an immediate transaction will miss out on benefits in the long run.
Essential airdrops can be equipped with exclusive avatars and special benefits such as discounts and free trials of goods and services offered by the crypto project. Holders can also be given exclusive early access to future features – and better yet, have their tokens waiting for them at launch.
Take your cake and eat it
Arken Finance says it is the inspiration behind the world’s first non-fungible airdrop, a concept that could shake the DeFi landscape immeasurably.
The DeFi trading portal can be found across eight networks and aims to equip investors with more trading tools while reducing friction.
Arken started a giveaway campaign back in November 2021, but it was delayed as the markets started to cool down. Now, he’s pioneered the NFA as a way to generate excitement about his future plans without falling into the common traps of pop-up airdrops.
Now, the 2,000 winners of his trading contest have been awarded their own NFAs, each holding a different number of tokens and each with different benefits. They will be able to return this cryptocurrency later, but for now, there are plenty of exclusive benefits to keep them busy.
“The team strongly believes in this application and is confident that this technology can be sold to DeFi project owners in the future.” Arken said in a recent blog post.
And while enthusiasts may have missed the chance to own one of the first NFAs during the initial giveaway, the project says subsequent rounds are planned for the future.
Some of the perks include exemption from commissions during the first 24 hours of the trading competition, and NFA holders will have their own special tier in the competition. On this mini-competition track, they will subsequently qualify for individual awards. In addition, exclusive information and live customer support is provided through the VIP Discord channel, and owners will have access to premium features that Arken Finance is developing during the development process.
This is a bold experiment that could open up new levels of loyalty in crypto projects that are starting for the first time. And for those who win airdrops, it is much more than tokens. Not only will they have a status symbol in the form of distinctive avatars that only a few members of the community own, they will also get an enhanced experience through VIP channels and direct customer support. For those who truly believe in the potential of the project, this is gold dust in itself.
There is excitement as Arken Finance’s cutting-edge experiment continues – and the project hopes that “NFA” will be the next acronym to become popular in cryptocurrency circles.
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Credit : cointelegraph.com