Crypto Coverages

Crypto Coverages

Is Airdrop Farming A Good Side Hustle? - Profitability Coverage And Best Strategies


By Market Steam May 11, 2024


Yes, airdrop farming is not just a good side hustle, it is an honorable hustle with great economic benefits. 


This article is coverage of the community of airdrop farming, drawing common “variable” on-chain data to determine the profitability of airdrop farming and the exploration of best strategies or practices for those looking to get started.


Airdrop Farming


At Glance


● Airdrop farming is a process of carrying out various “tasks” created by crypto companies to foster project engagement and growth.


● Airdrop tasks rewards often include points or XPs(that are converted to tokens), NFTs for the initial or active market stages and project token drops upon launch.


● Tokens earned from airdrop farming can be sold on public centralized and decentralized exchanges such as MEXC, Uniswap and SuperEx.


● Auroracoin (AUR) was the first ever Airdrop coin but Stellar(XLM) and Uniswap(UNI) made the most impact in the early days of crypto airdrops. 


● Over $21.7 billion has been distributed to users via airdrops since 2020.



Understanding Airdrop Farming


Brief History


Crypto airdrops have been a highly valuable addition to the crypto ecosystem since its inception on March 25, 2014 when Auroracoin airdropped its “Iceland Bitcoin” the “AUR” token to every citizen of Iceland in an attempt to replace the Iceland Krona. 


Commonly viewed and defined as a “marketing ploy” within the cryptocurrency ecosystem, crypto airdrops have since experience significant leverage for project development with notable examples including Stellar(XLM) airdrop to Bitcoin and XRP holders in 2016-2017 to create an awareness and foster adoption of its “blockchain for financial inclusion and more “cash than crypto” innovation”. Omise, in 2017 was another notable airdrop event of “OmiseGo” token airdrop to Ethereum holders and EOS airdrop of EOISO token to Ethereum holders in 2018 as well. 


Whilst all airdrops within the said period made “distinctive” impact in its various ecosystem and appealed to different industry players, the most impactful airdrop event that boosted its overall appeal to investors and crypto users was Uniswap’s UNI token airdrop to its decentralized exchange(DEX) users in 2020.


One of many recent UNI airdrop claims was made by this whale address “0x6c69fa64EC451b1Bc5b5FBAa56CF648a281634Be” which at the time of writing holds over $30 million is valued crypto assets. 


The whale claimed the UNI airdrop using the following address: 0xC0e1FBd0b01bFd2a208FBB967BFc3804c9058f78 and moved it to two different addresses before getting to its $30 million wallet. 


That said, it's claimed UNI had since been moved to two new wallets with one wallet holding 265 of the claimed tokens and the other holding 116.72 of the UNI tokens.


Uniswap airdrop still remains the biggest airdrop in the history of crypto with over $6.43 billion being distributed to active participants in its decentralized exchange protocol.


After the now biggest exchange on Ethereum with over $2.5 trillion in transaction volumes since inception, Uniswap, stormed the cryptocurrency ecosystem with a historical airdrop event, it became evident to crypto investors and users that being “highly” involved in crypto projects can yields great incomes - and airdrop farming was born! 


As with the case of Uniswap, most airdrops reward “users” that have performed one task or the other or held a specific fungible asset(like ETH) or Non-fungible token(NFT). 

Airdrop Profitability Coverage


What is Airdrop Farming? 


Airdrop farming is a process of carrying out various “tasks” created by crypto projects to foster project engagement and growth. 


Modern airdrop tasks can involve a combination of on-chain activities such as buying a specific token, providing liquidity in a specific crypto asset liquidity pool, basic transaction counts between wallets on a specific chain( testnet or mainnet), holding a specific NFT, And off-chain activities such as following the projects social network accounts and engaging with their contents, referring friends and promoting the projects by sharing to one's personal page. 


Whatever the case may be, airdrop tasks rewards often include points or XPs(that are converted to tokens), NFTs for the initial or active market stages and project token drops upon launch.


That said, over $21.7 billion has been distributed to users via airdrops since 2020. This is evident that much of an appeal is associated with airdrops within crypto and just how much projects are willing to disburse for the benefits that comes with it - exposure and adoption. 


How Profitable Is Airdrop Farming?


To determine how profitable airdrops have been we have to look at not just how much $ value of airdrop assets have been distributed but also how many addresses earned from airdrops coupled with average sum earned across these airdrop events.


In addition, we will explore how many of these airdrops are beginner friendly to determine if airdrops are events to enrich the already rich or if there are opportunities for the average users to make a decent amount of money from airdrop farming.


First of, let’s look at top 4 project airdrops beginning from 2020:


#1 Uniswap Airdrop Profitability Coverage:


Uniswap $UNI airdrop has so far been claimed by over 250,000 addresses with each regular address having completed at least 1 transaction(confirmed or failed) on the Uniswap DEX protocol receiving a minimum of 400 UNI tokens worth over $2,900 at today’s market price.


At an all time high of about $44 on May 03, 2021, the airdrop of 400 UNI is worth over $17,600.


In addition to being the #1 airdrop based on $ value of total tokens distributed at the time of writing, Uniswap also  distributed said airdrop to a vast number of addresses with each airdrop address receiving airdrop value worth over $1,000 at early claiming period.


#2 Apecoin Airdrop Profitability Coverage


Apecoin is a project by the APE Foundation, a steward of ApeCoin. Reportedly, the Foundation facilitates decentralized and community-led governance and is designed to become more decentralized over time.


Apecoin airdrop was targeted at BAYC and MAYC NFT holders, an NFT project by Yuga Labs. The relationship between ApeCoin and Yuga Labs is intricate yet distinct. ApeCoin is closely associated with the Bored Ape Yacht Club (BAYC) and Yuga Labs but is technically controlled by ApeCoin DAO, an independent entity. 


Yuga Labs, the company behind BAYC, claims no ownership over ApeCoin. Despite this, Yuga Labs has significant involvement with ApeCoin, including plans to adopt it as the primary token for new products and services, tying its value to the Bored Ape collection.


As the second largest airdrop since 2020, distributing over $3.54 billion, Apecoin made significant impact on the NFT Community by fostering increased involvement from investors in the Non-fungible asset market within the cryptocurrency and blockchain ecosystem.


That said, Apecoin allocated 150 million tokens to NFT holders with 2,042 tokens being the minimum an holder was entitled to. Whilst the underlying assets required for individuals to qualify for the Apecoin airdrop was mostly “high value” thus “unreachable” for the average crypto user, the airdrop served as an encouragement for existing crypto investors to diversify to NFTs in early stages and contribute to overall ecosystem growth.


#3 dYdX Airdrop Profitability Coverage


The dYdX airdrop was a significant event in the decentralized finance (DeFi) space, where the platform distributed 75 million DYDX tokens to past users. The airdrop was part of the platform's native token launch and aimed to reward early adopters and users who had traded on dYdX protocols or deposited funds into its borrow/supply pools.


Eligible users were those who had traded on any of dYdX's protocols (perpetual, margin, spot) on Layer 1 or Layer 2, or deposited funds into dYdX's borrow/supply pools by the snapshot time on July 26, 2021. 


The snapshot was taken at 00:00:00 UTC, and eligible users needed to achieve certain trading milestones on Layer 2 Perpetuals within the first 28 days of Epoch 0 to unlock the rewards.


The airdrop was notable for its size, with the 75 million DYDX tokens being worth over $800 million at the time of distribution, and exceeding $2 billion at an all time high of $26.80. The tokens were distributed on September 8, 2021, and users who traded more than $100,000 in the past were eligible for about 6,400 DYDX tokens, worth over $171k at all times high. 


Interestingly, the least airdrop amount was 310 tokens and this was for simply making at least $1 trade on the exchange. 

#4 Arbitrum Airdrop Profitability Coverage


Arbitrum $ARB airdrop was allocated to 625,143 addresses on the Arbitrum One rollup chain. 


Of the qualifying addresses, over 93.3% claimed the airdrop which is 583,138 addresses.


With an average allocation of 1,859 per address, over 1.162 billion tokens were claimed by over 580k addresses. At the time of writing, that is $1,933.36 on average claimed by qualifying addresses. 


Arbitrum is a layer 2 blockchain scaling solution for Ethereum, built for increased chain speed and scalability. The ARB airdrop criteria included bridging funds, conducting transactions, interacting with smart contracts, and depositing assets into Arbitrum One or Nova. 


Eligible users could claim ARB tokens based on these actions, with a snapshot taken on February 6, 2023, and distribution starting on March 23, 2023. The airdrop aimed to reward early adopters and facilitate the transition to a decentralized autonomous organization (DAO) within the Arbitrum ecosystem.


As evident in the number of qualifying addresses and the average airdrop amount to these addresses, this was one of many highly inclusive airdrop events that diversely reward chain participants. 


Is Airdrop Farming A Good Side Hustle?


Judging by our industry study of top 4 airdrops from 2020, airdrop farming is a highly profiting venture.


In addition to the monetary rewards associated with airdrop farming, participating in said on-chain activities contributes highly to the health of these blockchains and the cryptocurrency ecosystems at large, making the culture of airdrop farming a respectable hustle.


Evidently, it is not a gated ecosystem for the rich as observed by the top airdrops. Further exploration of top 50 airdrops will only prove our findings that most airdrops are largely inclusive and rewarding to the average users. 


That said, there are yet specific airdrop events that may be a total waste of time and that's explored below. 


Best Practices and Strategies For Airdrop Farming


Based on our research, the best airdrops are usually associated with “on-chain” activities or tasks. This means that airdrops that requires users to perform onchain tasks such as basic transactions, dex trading, providing liquidity or depositing into a protocol, bridge assets, etc, are likely to be the most rewarding. 


Why is that? 


For new chains, on-chain activities performed by users enables the developers to test the strength and weaknesses of the network so it's expected that users are well rewarded for contributing to making the chain better. 


As such, farming testnet activities might just be the best airdrop strategy moving forward as newer and better chains are expected to keep popping up. 


To ensure the safety of your assets, it is at the top of list of best practices to avoid using “main wallets” to interact with these new networks. Creating dummy wallets is most advisable moving forward. 


That said, airdrops associated with majorly social tasks like sharing a tweet or making a comment or following a project account are considered the least rewarding forms of airdrops. Most of such projects reward top social accounts more as they draw the most attention to their community. 


That said, there are still a number of projects that implement strategies to reward the average users still, amongst these social-tasks airdrop community. 





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