Crypto Airdrops are a huge hurdle for DeFi

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Crypto Airdrops are a huge hurdle for DeFi

The slew of blockchains that have come out over the past year has left many DeFi denizens apathetic to new launches. No one could say whether it was Aptos, Sei, and Sui, not to mention about half a dozen new Ethereum layer 2s.

Celestia, another bidder, just announced it's going to join the fray.

Even if you haven't paid attention to Celestia, you could still get an airdrop on its TIA token if you've been active on one of Ethereum's many layer 2 networks.

Token airdrops have proven themselves as a great way to bootstrap users and liquidity - look no further than the top layer 2 Arbitrum. Celestia probably has a better shot than most because it focuses on something unique: modularity.

Celestia utilizes interconnected modules, each responsible for specific functions, instead of a single blockchain.

Celestia said this specialization offers breakthroughs in scalability, flexibility, and interoperability. The arrest of Su Zhu, the co-founder of Three Arrows Capital last week, offers a few lessons.

Among them: Go on a soul-searching trip to Bali and then spinning up another crypto business isn't enough to shirk responsibility for the collapse of your $3 billion trading firm.

Zhu's arrest in Singapore weighed heavily on his latest venture, OPNX, a crypto exchange that also lets users buy and sell bankruptcy claims for FTX, Voyager, and Three Arrows Capital. OX crash over 44% on the news and shows little sign of recovery.

The bright side is that those who lost money lending to Three Arrows Capital may have a better chance at getting some of it back now that Zhu is being forced to cooperate with liquidators.

Singapore authorities have an arrest warrant for Kyle Davies, the co-founder of Three Arrows. He was last seen in Dubai in April, where he planned to open a restaurant focusing on chicken-based cuisine.

Osato Avan-Nomayo, meanwhile, wrote up another story on DAO rage quitting, this time at Jade Protocol.

Rage quitting is becoming more common among DeFi protocols.

There are a dozen DAOs that raised funds, often by selling tokens, trying to make something work, but failed. The tokenholders are now voting to dissolution what's left to recoup some of their losses.

I expect the DAO rage to continue. There's still many more DAOs in similar positions, and with increased competition for a declining pool of blockchain-based liquidity, it's going to get harder for many projects to justify burning investors' cash.

As long as tokenholders have the motivation to hold team members accountable, he said.

Crypto projects have aired a whopping $2.2 billion worth of tokens to users in 2023.

Airdrops have not only become a way for projects to acquire users and cut out middlemen, but also to decentralise ownership.

With over 2.1 billion native Ether transfers, Banteg has developed a heat map of more than 2.1 billion.

In the noise are transfer patterns that visualise liquidation cascades and likely Sybil attacks over the past seven years of Ethereum activity.

The purple hue in Banteg's chart makes it all more mesmerizing, and demonstrates how, with the right approach, data doesn't have to be soulless and dry - it can be beautiful, too.

FTX's bankruptcy case entered a new stage last week when the court gave the defunct crypto exchange the go-ahead to liquidate its crypto holdings.

But former customers are increasingly worried about FTX's new management trying to claw back funds from those who exited the exchange in the 90 days before its collapse.

The precedent set in the liquidation of Cryptocurrency lender BlockFi may protect those who withdrew less than $250,000 or are based outside the US.

Tim Craig, a DeFi Correspondent at DL News in Edinburgh, Scotland, is a freelance journalist. Tim is reportedly holding over $1,000 worth of Ether, Swell staked Ether, Redacted Cartel, and GMX. He also holds an insignificant amount in NFTs.