All About Airdrops

13 snips

Apr 7, 2025

Guest

Daren Matsuoka

Eddy Lazzarin, a blockchain expert and CTO at a16z crypto, joins fellow guests Andrew Hall, a Stanford political economics professor, and Daren Matsuoka, a data science partner. They dive into the fascinating world of airdrops, revealing their complicated history and design challenges. The trio discusses strategies to avoid Sybil attacks and optimize rewards while navigating the impacts of AI on airdrop mechanics. They also share learnings from notable cases like Uniswap and explore how airdrops influence user behaviors and project governance.

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INSIGHT

Airdrop Purpose

Airdrops distribute tokens en masse, often programmatically.
This can achieve marketing benefits and decentralization by distributing control.

INSIGHT

Community Ownership

Crypto airdrops often allocate 50% of the token supply to the community.
This differs drastically from traditional equity markets, where early contributors receive less.

ANECDOTE

Airdrop Origins

The term "airdrop" may originate from the distribution of the first Bank of America credit cards.
Like crypto airdrops, this aimed to encourage new user behavior on an ongoing basis.

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with @eddylazzarin @DarenMatsuoka @ahall_research @rhhackett

Welcome to web3 with a16z. I’m Robert Hackett.

Today we’re talking about one of the most familiar — and most misunderstood — mechanics in crypto: the airdrop.

We’ll explore the history of airdrops in and outside crypto, the challenges of incentive design, and learnings from airdrops to date. We’ll also answer questions like how do you avoid Sybil attacks and professional airdrop farming? Should your drop be big or small, one-time or ongoing? And what happens when AI agents enter the mix?

To break it all down, we’re joined by:

a16z crypto’s Chief Technology Officer Eddy Lazzarin;
a16z crypto Data Science Partner Daren Matsuoka; and
a16z crypto Research Consultant Andrew Hall, who is also a Professor of Political Economics at Stanford’s Graduate School of Business.

Whether you're planning a token launch, looking for token rewards, or just curious why airdrops have become such a powerful mechanism in crypto — this episode is for you.

Timestamps:

(0:00) introduction

(1:42) what is an airdrop?

(6:27) tokens vs traditional equity

(8:49) incentive design challenges

(15:18) origins from credit cards to crypto

(17:14) Optimism airdrop case study

(23:09) NFT market learnings

(28:32) Sybil resistance and verifying humanity

(33:04) Uniswap airdrop and beyond

(36:35) AI agents and the future of airdrops

(40:33) connection to performance reviews

(45:30) token vesting and volatility

(49:08) experimentation vs. best practices

(59:20) Batesian mimicry

Resources:

Research into how airdrops can increase user retention [Optimism Collective forum; January 2025]
Effects of Optimism airdrop 2 on governance participation [a16z crypto; June 2024]
One From Many: Visa and the Rise of Chaordic Organization by Dee Hock [Berrett-Koehler Publishers; October 2005]
How the '9-Box' talent review system can make or break your career [Forbes; March 2024]
Batesian mimicry [American Museum of Natural History; July 2023]

As a reminder, none of the content should be taken as investment, business, legal, or tax advice. Please see a16z.com/disclosures for more important information, including a link to a list of our investments.