Retrodrops are the distribution of free tokens to users who participate in various activities at an early stage of the project's development.
Why Do Projects Distribute Tokens?
Before the project enters the market, there are two tasks: raising funds and building a user base. To do so, it’s possible to conduct the token sales. ICO, IDO, IEO, and how they have not changed, the essence is the same - this is the initial sale of project tokens to users through whitelists and allocation.
Token sales allow users to attract other users and raise funds for the development of the project. However, the regulator, the Securities Commission (SEC), comes on the scene and declares that both the private and public sale of tokens is a direct ownership of security. At this point, we should digress slightly and focus on regulation, which is important both for receiving drops and for any activity in the crypto community in general.
Rewards are provided for various projects. The activities for which a reward is given also depend on the project’s specifics. Exchanges and NFT platforms provide tokens for trading, blockchains for online activity, and P2P projects for participating in games.
Retrodrops are provided for this reason. Projects use these to achieve different goals. Let us look at the main motivations for running retrodrops.
Raising Awareness of the Project
Every project needs to raise its profile and attract the attention of as many new users as possible. Announcing a retrodrop often causes a wave of hype and increases the number of mentions of a project. The distribution of tokens acts as a marketing strategy.
For example, Aptos announced the distribution of 20,070,150 APT ($148.5 million at the exchange rate of October 19, 2022) and created a huge wave of hype. A total of 110,235 people received tokens.
Encouraging users
Often, large projects that do not have their own tokens are interested in having active users involved in management (using management tokens) and retaining their loyalty.
In the eyes of investors, such a step makes the project people-oriented, showing that it values its users and takes their opinions into account. In the eyes of the users, distribution increases the credibility of the project and shows that the creators value them. Recently, retrodrops have become such a popular phenomenon that there are people who specialize in this type of activity separately, they are called retrohunters. They are not interested in actively participating in the life of the project, but on the contrary, they want to imitate the activity in order to make a profit.
We will look at successful cases of past retrodrops, tell you about projects that can still distribute their tokens, and analyze the mechanism for searching for retrodrops.
Potential Retrodrops - Large Projects Without Tokens
Before you begin burning your commission in the blockchain, you should consider the following factors:
- It is less expensive to be active in the L2 blockchains. In L1 (e.g. Ethereum) you will spend a lot of money on commissions, so it is better to refrain from activities in various DEX or NFT marketplaces on Ethereum. Please note that to transfer funds across the bridge (from Ethereum to L2), you will have to pay a fairly high commission, usually ~$10.
- If you plan to use multiple accounts (to be active from multiple wallets), make sure there are no connections between accounts in any network, as large projects have learned to identify multiple accounts and exclude them from the list of recipients. Do not send money from one account to another; do not transfer tokens to the same address, for example, an exchange wall; at the same time, it is possible to withdraw tokens from an exchange account, as the projects identify exchange wallets (which send and do not accept funds–they are different) and do not pay attention to them).
How To Find Retrodrops?
If you are in the information field, follow the news of the crypto market, and subscribe to appropriate Telegram channels, you will always be aware of new drops. Big projects in one form or another are always discussed in advance in the crypto community. If you want to know about drops before us, which is also quite realistic, then you need to monitor:
- The Twitter accounts of top projects (it is the main place for announcements in the crypto space),
- Representatives of the blockchain industry (we are not talking about influencers, but active market participants. The same Vitalik Buterin talked a lot about Layer 2 projects, which are now surviving from the market of recent "Ethereum killers" Solana, Aptos, and NEAR),
- Large exchanges (these are announcements of listings and partnerships),
- Official crypto media and degens (according to your taste and color).
Bear in mind, you may not find any information regarding the retrodrop. In this case, you will have to wait for someone to write about it, if it happens at all, or come up with your own criteria for selecting it for distribution.
Usually, when a new project appears or a test net is launched, a major partner retweets this activity to give the event a kind of mass appeal. If you subscribe to all the major Twitter accounts and monitor the feed regularly, you will be able to easily find all projects preparing for launch.
However, identifying a project is insufficient. It needs to be properly analyzed, and it is necessary to understand if it has the potential to fall.
Once you have chosen a project, do your own research on the potential retrodrop and the project itself. You should not trust any one source, so you should study as many mentions of the project as possible. The more research you conduct, the less likely you are to waste time and money.
How To Participate in Retrodrops and Increase Chances of Getting Them?
We will look at all the activities. If the project is a blockchain network, it is possible to perform all the actions listed below. If it is a DeFi service, then there are already specific actions for it. Globally, rewards are provided for every interaction with a smart contract.
- Bridges. They wrap the tokens into the project network.
- Provision of liquidity. You provide funds to the liquidity pools in the new network.
- DEX and landing protocols. This allows tokens to be traded on the new network. The greater the volume you trade, the better.
- NFT marketplaces. You can trade free NFTs or even buy some NFTs.
How Do You Increase Your Chances?
- Transactions over a long period of time, so that the account does not look like a one-day transaction. The duration of an activity depends on the duration of the test net, but if the project you are testing is on Ethereum, for example, accounts with a history of transactions on the air will be preferred.
- Constant activity. Once you have run the tokens through all the accounts, you should not discard them, but repeat all the operations at least once every two weeks ( depending on the duration of the test net).
- Many accounts. As part of the fight against multiple transactions, projects filter out wallets with one or two transactions. You know, it is not difficult to write a bot that logs into the logs and performs a single transaction. This is why this moment was also under the control of the project's IT specialists. The exact number of transactions depends on the project type. In Arbitrum, to the best of my knowledge, wallets with fewer than 100 transactions were cut off.
- High transaction volume. This is another important finding of this study. Arbitrum made the thresholds (which of course were not known in advance) $10k, $50k, and $250k. Do not worry; this is the total number of transactions. You can go back and forth, and for $ 100, the benefit of commission in new projects is scanty. Wallets with a balance of less than 0.005 ETH were also cut off.
The Bottom Line
Earning from retrodrops is not an easy task, as you have to find and check the project, find out about the possibility of running a retrodrop, and the conditions for participation.
In addition, all the effort and money spent on fulfilling the conditions can be wasted if the retrodrop still does not occur.
Do not forget the risk of fraud in the projects. This risk is particularly important when dealing with smart contracts, because if money is allowed to be spent from the wallet and the honesty of the project is not checked, you may lose your assets. Therefore, it is best to use separate wallets that do not store large amounts for participation.
Related Posts
