Crypto Airdrops are a huge hurdle for DeFi users

Crypto Airdrops are a huge hurdle for DeFi users

The number of blockchains coming out over the last year has left many DeFi denizens apathetic to new launches. There was Aptos, Sei, and Sui, not to mention about half a dozen new Ethereum layer 2s.

Another contender, Celestia, has announced it's about to join the fray.

If you've been an active user on a layer 2 network, you may be eligible for an airdrop of Celestia's TIA token if you haven't been paying attention to it.

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

In contrast to one blockchain, Celestia uses interconnected modules that are each responsible for specific functions.

Celestia notes that this specialization has significant advantages in scalability, flexibility, and interoperability. The arrest of Three Arrows Capital co-founder, Su Zhu, 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.

The arrest by Zhu in Singapore weighing heavily on his latest venture, OPNX, a crypto exchange that also allows users to buy and sell bankruptcy claims for FTX, Voyager, and Three Arrows Capital. It's true, OX crash over 44% on the news and has little sign of recovery.

On the positive side, 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 also arrested Kyle Davies, the co-founder of Three Arrows. He was last seen in Dubai last year, where he planned to open a restaurant focusing on chicken-based cuisine.

Lastly, Osato Avan-Nomayo 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. tokenholders are increasingly voting to dissolve what's left to recoup some of their losses.

I expect the DAO rage to continue to grow, he said. There are still many more DAOs in similar positions, and with more 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 token holders have the motivation to hold team members accountable, then it's clear that they're not going to quit.

In 2023, crypto projects have airedropped users with a whopping $2.2 billion worth of tokens.

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

Yearn Finance developer Banteg has put together a heat map of more than 2.1 billion native Ether transfers.

The transfer patterns are hidden within the noise, which Visualise liquidation cascades and likely Sybil attacks over the past seven years of Ethereum activity.

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

The courts gave FTX the go-ahead to liquidate its crypto holdings last week.

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

The precedent set in BlockFi's liquidation may protect those who withdraw less than $250,000 or are based outside the US, said @0xg00gly.

The DeFi Correspondent of DL News is Tim Craig, who works at DL News in Edinburgh. Tim has over $1 million in Ether, Swell- staked Ether, Redacted Cartel, and GMX. He also holds an insignificant amount in NFTs.