Retrodrops. Do they feed or have they fed? 🤑 | by Golden Trades | Coinmonks | May, 2023


Golden Trades
Photo by Viktor Forgacs on Unsplash

This post is about how retrodrops came to us, why they feed, and why they will continue to feed? Let’s begin!

What are retrodrops?

According to the well-known neural network OpenAI, “It is a marketing strategy used by blockchain projects to increase awareness, attract users, or reward interested parties.” In short, it’s a money laundering scheme.

All cryptocurrency projects with a token have always had a more or less similar roadmap, which looks something like this:

  1. Fundraising
  2. Development
  3. Project launch
  4. Token Generation Event (TGE)
  5. Making money

As speculators, we are specifically interested in the TGE, the token generation event or simply the distribution of money.

And this TGE has always been different. I will refer to the excellent article about the evolution of token distribution models written by Coinlist.

2009 — the year of solitude.

Why? Because of Bitcoin. In the BTC community, the coin was distributed through mining.

The profit varied for everyone — some held on to their Bitcoin until it reached around $70,000 and became billionaires, while others sold their coins for a pittance.

2013–2017 — the era of ICOs.

We all know what ICOs are. The scheme involved companies raising money from public investors, i.e., ordinary people like us. The projects were hyped. For example,

EOS — raised $4.1 billion in 2018.

Filecoin — $257 million in 2017.

There were numerous scams that collected tens of millions of dollars from naive investors, but there were also successful projects until the crypto market crash at the end of 2017, of course.

2018 — IEOs

Technically, they were not much different from ICOs; they were just conducted on centralized exchanges (CEX) and supposedly had more trust.

2019 — auctions

It was a crazy time, which, in my opinion, didn’t receive the hype it deserved, but hyped projects like Solana and Celo were introduced through auction formats.

2020 — Liquidity Farming, Stakedrops, and Community Sales (!!!)

The rise of DeFi, the emergence of crazy schemes, and of course, the first airdrops!

Uniswap, 1inch, and Compound collectively distributed tokens worth over $1 billion to their users.

These three projects are decentralized applications (dApps) on the blockchain, but they were the first to show the world that tokens can be not only sold but also GIVEN AWAY, thereby revolutionizing the mechanics of token distribution.

2021 and onwards — various token implementation models, BUT!

We will ignore tier-3 projects.

According to some opinions, large projects are now afraid of the formidable U.S. machine called the SEC (Securities and Exchange Commission) due to the classification of tokens as securities, and it is easier and safer for them to give away coins rather than sell them to ordinary people. And that’s why these projects emerged (the numbers are not exact but approximate):

  • Aptos — starting from $2,000 per account
  • Biconomy — starting from around $10,000
  • Arbitrum — starting from $700
  • Uniswap — 400 UNI ($2,400)
  • Blur — depending on the volume, on average, around 1,000 dollars
  • 1inch — 750 1INCH ($1,700)
  • Goldfinch — they gave about 1 GFI ($6–7) for each locked dollar
  • Paraswap — 7,800 PSP ($10,000)
  • Optimism — $2,000
  • …and many, many others.

Many newcomers, and not only newcomers, may wonder why they give away money, especially in such large quantities. The answer is simple.

Firstly, as I mentioned earlier, it’s because of legal issues.

Secondly, tokens are not pure fiat, not even stablecoins; they are simply tokens, roughly speaking, projects don’t lose money by giving them away. But then the pump machine kicks in: paperhands sell their tokens in joy for an average price of $1, MM (market makers) start pumping and drive the price to around $1.5, and then they ruthlessly exit. But until a certain point, everyone is still happy: abusers, the project, exchanges, and market makers.

My post was written from the perspective of a speculator rather than a legal professional, so for a final touch, I highly recommend reading the following material — “The 4 Problems of Airdrops”. It provides more detailed information about the problems of airdrops from various perspectives.

I hope you now understand how retrodrops emerged and why they are more relevant than ever. To be continued soon.

#Retrodrops #feed #fed #Golden #Trades #Coinmonks