A lot of people do not know how to profit from retroactive airdrops, which is why they miss out on them. Retroactive airdrops reward users who have already engaged with a project by using its testnets, staking, or providing liquidity. By understanding the strategies to qualify, users can position themselves to benefit from future airdrops and unlock potential financial rewards.

What Is Retroactive Airdrop?

Retroactive airdrop is a process by which a blockchain project distributes tokens among its users that use its platform or protocol-very often before its launch or listing on exchanges. Unlike traditional airdrops, which send tokens to wallet holders at a certain time or as some sort of promotion, retroactive airdrops reward those who contributed to the growth of an ecosystem or showed early interest in one.

The Difference Between Retroactive Airdrops and Traditional Airdrops

Although traditional and retroactive airdrops involve the free distribution of tokens, the strategy between timing and focus on audience is considerably different.

Timing and Eligibility: Traditional airdrops announce a date for which, and sometimes have, specific eligibility criteria, such as holding a particular token or following the social media of a particular platform. In retroactive airdrops, target users engaged with the platform before any airdrop was announced.

Community Participation: Retroactive airdrops create a really loyal community, as the rewards are distributed to those who took part without expecting an airdrop in return. This is different from classic airdrop distribution because it usually attracts people who join for the reward itself. Some projects, like Optimism, rewarded active usage and cross-interaction with its network, ensuring consistent user activity for a period.

Utility and Governance of Token: Most retroactive airdrops seek to create a decentralized governance system. For example, the dYdX airdrop endowed early users who had actively used the protocol with governance rights, thus giving them a say in decision-making. Traditional airdrops may not necessarily have governance incentives; most of the time, their objective is to raise awareness or hyping of the token.

Successful Retroactive Airdrop Examples

A few examples of successful retroactive airdrops have shown how powerful such a move can be-from both the users’ perspective and the project’s perspective-seeking to decentralize governance and compensate for loyalty.

• Uniswap (UNI): In September of 2020, Uniswap airdropped 400 UNI tokens to every user who had interacted with the platform before a certain date. At the time, this was worth around $1,200 per user. This certainly catalyzed its user count and brand loyalty.
• Optimism: Optimism is the first Ethereum Layer 2 scaling solution to implement an airdrop, where users get incentive according to their usage of the network. Users who bridged assets on Optimism or interacted with certain dApps on the network before a specific date received OP tokens, with many recipients getting thousands of dollars worth of tokens, depending on the extent of their activity.
• Ethereum Name Service: ENS is a domain registry on Ethereum that had airdropped tokens to its users who registered Ethereum domains before the cutoff. Rewards directly depended on the period and activity of users’ registration. Thus, this airdrop incentivizes long-term participation and grants voting rights to the recipients in the ENS protocol.
• dYdX: dYdX is a decentralized exchange that has distributed tokens to some of the early traders on the platform. The amount that a user was allocated depended on their trading activity on the platform. So, users were given DYDX tokens that could be used to vote for upgrades being implemented on the protocol.

How to Position for Potential Retroactive Airdrops

Retroactive airdrops can be completely unforecastable, since very seldom do projects pre-announce on such matters. Nevertheless, there are some guidelines to adhere to for users who want at least to widen their chances of receiving benefits in prospective airdrops.

• Become familiar with new protocols and platforms: Interact with as many new DeFi projects, NFT initiatives, and blockchains as possible since it significantly increases the chances of receiving future airdrops. It’s better to look into protocols still in their beta or experimental stages because most of these have given incentives to early users. Several Layer 2 Ethereum, Solana, and Cosmos ecosystem protocols are ripe candidates for upcoming airdrops.
• Diversify interactions: Get involved in lending, staking, swapping, or buying NFTs in as many blockchain projects as possible. Many retroactive airdrops reward a wide variety of interactions. For example, those who used many features on dYdX or Optimism got bigger airdrop allocations.
• Hold and Stake Tokens: Some projects encourage various rewards for holding or staking tokens within the particular ecosystem. A simple example could be your chances of receiving a future airdrop increasing due to staking on specific protocols, or having governance tokens.
• Follow airdrop news: You can subscribe to our website to get continuous airdrop updates. You can also follow our official social media for the most accurate news via Linkedin, Twitter, and Telegram.

Photo Credit: CoinWire