Questioning Airdrop Models

Despite that airdrops are costly, they still are common on EOS. Projects that want to attract users are delivering their tokens indiscriminately to accounts present in the genesis snapshot. Alternatives to this simple, expensive method exist and are being explored, but they have drawbacks. One example is the airgrab, which requires upfront registration before receiving the token. The drawback is that your tokens are only dropped to those aware of the airgrab event, and you will likely miss a large swath of would-be-valuable users. The benefits however are that you only drop tokens to interested parties and save on RAM costs.

The general belief is that airdrops increase the value of EOS, making ownership of the coin more desirable. Once snapshot tools are more commonly used in airdrops, newcomers who own EOS will also share the perks.

This all sounds pretty good. So why question it!?

Though it is noble to find ways to increase value to EOS coin holders, I believe the current airdrop approach is ignoring a larger opportunity. I believe there is an approach that adds more value to the EOS ecosystem, and thus the coin.

We suffer from a lack of voter participation, which is allowing for questionable block producers to land positions in the top 21. In any blockchain, securing the network supersedes increasing the value of the coin. With EOS, we are falling short of the votes needed for healthy DPOS.

But why is our voter community not flourishing?

Incentives come in two flavors: direct and indirect. A direct incentive would be seeing your balance increase as a direct result of some behavior. Indirect incentives are things like, "Well, if you vote for block producers, then the selection process is marginally more decentralized, and this affects the health of the network, and eventually trickles down to the value of the coins you hold." Humans typically do not respond as strongly to indirect incentives.

DPOS ships out of the box with an incentive structure full of risk. Blockchain consensus algorithms (Proof of Work, Proof of Stake, DPOS, etc.) tend to reward those who secure the network--those who make the blocks. With most crypto, the very same incentive for actually creating a block is the "how" and "why" for becoming a creator of blocks in the first place. Wha?

Let's get meta.

This concept is subtle, so I'll illuminate it by asking some questions. In Proof of Work, how does one become a competitive miner? The answer is to invest capital into mining hardware. Why would one invest capital into mining hardware? Because this allows one to make more blocks, and receive more block rewards. The incentive structure is symmetric and direct. The same circular reward system is present in Proof of Stake--the incentive to stake more coins is to maintain a position to earn more block rewards.

If we ask the same question for DPOS, we immediately see a potential deficiency. How does one become a competitive block producer? The answer is for users to vote in their favor. Why would a user vote? Here we have lost the direct incentive. Answers start to look like, "Because the user trusts them," "Because the user wants to secure the network," and so on. EOS, as it is now, doesn't directly reward voting. A piece of the direct incentive puzzle is missing.

How could Dan miss something so obvious!? Well, I don't think he did. He has always warned the community on the dangers of voter apathy, and has trusted in placing responsibility with the people. It is up to the dapps to correct for this (and block producers within reason, as paying for votes is forbidden).

My airdrop proposal is simple: airdrop only to accounts that have voted. With the current number of voters, this would bring the airdrop costs down 90 percent. Additionally, users that have voted have demonstrated a willingness to use their accounts. They aren't mere bag holders (no offense). In terms of looking for potential users, why target anyone else?

Apathy puts the network at risk, and dapps that aren't encouraging voters inherit these risks.

If you are interested in my project, see patreos.com.