Tracking ‘Fake Data’ on the Blockchain How to Find the Right Airdrop?

Uncovering Phony Information on the Blockchain A Guide to Identifying Legitimate Airdrops

Original Title: “Follow the (fake) Data: Understand the ‘airdrop farming stack’ and the industry around it”

Original Author: Kerman Kohli

Original Translation: Kaori, BlockBeats

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One thing that has been increasingly bothering me in recent years is how much this industry relies on “data”. I put it in quotes because most of it is fake/not real. In order to show what is happening and how it works, I thought I should write a longer article about the whole issue.

When I started researching this article, I realized how industrialized the whole thing is and how many investors are being fooled by it. The whole thing is a big joke and shows how far the industry still has to go.

Layer 1 Valuation

Our problem starts with these overpriced, overhyped tokens that investors are willing to pay billions of dollars for. All you need is a fancy whitepaper and you can twist the unit economics of it all. My research started with Dune, where I found this dashboard calculating the CAC of multiple airdrops.

That’s a good start, although I do want to point out that these CACs (from the project’s perspective) are underestimated numbers, as they are just: Dollar value ($) / Claimed addresses. This calculation doesn’t take into account the actual percentage of airdrops held. Given that typically only 10%-20% of addresses hold airdrops, it’s safe to assume that these CAC numbers are 5 to 10 times higher than what you see above.

The second thing is, we have an implied airdrop value hierarchy:

Layer 1 / layer 2 / hyped protocol = Thousands of dollars spent

Small to medium-sized applications = Hundreds of dollars spent

Fortunately, the two are not mutually exclusive! If you use the right application on the right chain, you’ll get two airdrops.

So ideally, you want to focus on the chain with the most airdrops and then interact as much as possible. Well, but what happens next?

Finding the Right Airdrop

Fortunately, for you, the airdrop hunter, there is already an entire industry built to help you find airdrops. Typically, these airdrop discovery websites require you to perform some very specific “actions” and need evidence on-chain that you have performed these actions. Whether it’s your grandma or your robot performing the actions, as long as the transaction is visible on the chain, it’s fine.

All these “task” platforms are actually disguised airdrop discovery websites. If these websites can attract high-quality users, then usually there wouldn’t be a problem. However, the users attracted by these websites are often highly hired, representing the short-term speculation suffered by the industry as a whole.

Let’s contact our trusted friend, dApp Radar, and see what airdrop activities might be happening at the moment.

Based on this, my game plan is likely:

· Use zkSync as my base chain

· Bridge my funds with Layer Zero

· Use Metamask as my chain wallet

All of this may just be my natural workflow, without any additional work needed. But the question is, what do you need to do to understand your ranking in these potential airdrops? Surprisingly, a whole community has emerged consisting of “airdrop simulators”. These people exist to help you understand your position relative to other airdrop farmers. Simply search for “airdrop” and you can find dashboards that simulate how projects distribute airdrops using past airdrop standards.

What’s fascinating is the level of detail that is depicted. Take a look at all the columns mapped out in this table. Arbitrary scores, last transaction time, transaction count, unique contracts, total USD transaction amount, unique active days/weeks/months, wallet age, and block time.

When your “community” has already done the airdrop calculations for you, why bother doing it manually?

Playing the System

If you’re surprised by the planning of the whole thing, wait until you see the next section: if you know all the permutations and combinations used for standards, then you can start automating and building efficient systems around it. I spent some time researching and found these two magical tools. You might want to give them a try, just to report on how corrupt the whole airdrop game is.

The first one is our friends at nftcopilot.com, who have built a flexible dashboard for you to automate and set up your farming.

It’s amazing the depth and detail they are associated with. In the product, you can create “groups” and customize the following parameters:

1. Number of transactions through bridge routing

2. Bridged networks (Ethereum, Polygon, Binance Smart Chain, Arbitrum, Avalanche, Optimism, Metis, Aptos)

3. Configured random operations including configured chance probability, sleep interval, and maximum random transactions per transaction.

Let’s be clear, this is far from value-added and value-destructive for the entire ecosystem.

Fake products to prove the reasonableness of false valuations.

If you narrow the scope, what really happens is that the cost of proving the reasonableness of these airdrops is lower than the potential return that this effort could bring. Another website I found helps make transactions clearer by explaining prices and potential investment returns in detail.

Now, with your own simplified math, you can calculate how much you want to invest and how much money you expect to see. Yo, this solves a real problem for everyone. In a way, it may be more profitable for venture capital companies to leverage airdrops than to invest in actual projects. It’s faster liquidity and less psychological burden.

As long as the cost of the airdrop is lower than the potential reward, airdrops will prevail.

Final Results

So, what do you think is the result of building a sub-industry of agriculture on top of these overhyped projects? It’s just a battle to see who can build a larger zombie network industry on top of it. If the on-chain numbers are exaggerated, then those naive participants who don’t know how to dissect the data will report what they see and ultimately deceive the end retail investors into believing that the projects they invested in have real market appeal.

Take a look at the tweets below. If you’re on Twitter, you might be confused by this and think, “Wow, this thing is really starting to work, I should buy.” The more people believe in this data, the further the cycle will continue. Here are some examples I found on Twitter of improper data usage.

Based on what I have shown you in this article, do you believe any of the numbers in these traction indicators are real? Of course not, they’re all fake. The data is fake.

The Answer

An identity without permission.

We are deceiving ourselves if we don’t truly scrutinize who is generating these metrics. Simply calculating the basic numbers as is, means you’re setting the standards for identity inclusion very low (considering the cost to create an identity without permission is zero).

The common thread among all these issues is the lack of consideration for past behavior or behavior in a broader context. So, how do you address these problems if you have a stronger layer of identity in the crypto field?

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