Airdrop

An airdrop can run by direct transfer or, more commonly, by claim against a smart contract. The issuer sets a snapshot, a cut-off block or date, and reads the on-chain state (balances, interactions, liquidity provided, NFTs held) to determine eligibility. The list of addresses and amounts is compacted into a Merkle tree: the contract stores only the root, and the user claims by presenting a Merkle proof, which the contract verifies and marks to prevent a double claim. Common variants are the retroactive airdrop for usage, by token holding, by tasks, or by staking.

It serves to distribute governance tokens to real users rather than selling them, to acquire and retain early adopters, and to bootstrap early usage and liquidity in a protocol. The core technical challenge is sybil resistance: a single actor splits activity across many wallets to multiply the allocation. As good practice, teams apply activity thresholds, address-graph analysis, and weighting by volume and age. Recipients should note that an airdrop can carry tax effects at the moment of receipt, a question that depends on each jurisdiction.

Uniswap distributed its UNI token on 17 September 2020: 400 UNI to every address that had used the contracts before 1 September, reaching more than 250,000 addresses and setting the retroactive pattern. Arbitrum distributed ARB in March 2023, with a 6 February snapshot and a points system for on-chain behavior to roughly 625,000 wallets. ENS chose a similar model for holders of a registered .eth domain.