Binance Alpha has completely transformed the Airdrop farming track and the secondary market exit model for project parties.
1/In the past,project parties would distribute millions of airdrops just to encourage user interactions, thereby making the project's fundamental data look more appealing. This was done to gain better bargaining power when negotiating with top exchanges for listing. Eventually, retail investors would take over from the exchanges, and the project parties would profit by exiting through the secondary market. Throughout this process, various players such as airdrop studios, VCs, KOLs, and market makers all participated and reaped their respective benefits.
2/However, the good times didn't last long... As more and more big players repeatedly exploited this process to harvest from retail investors,the latter became disillusioned with projects listed on exchanges.The most severely affected were the VCs, whose profit points heavily relied on secondary market liquidity for exit. This is also why VCs faced significant difficulties in April,with some even being forced into a standstill or restructuring.
3/Now, the emergence of Binance Alpha has changed everything. The listing requirements and costs for Binance Alpha are significantly lower than the usual listing policies(a liquidity pool plus various other fees totaling just500,000). However, thanks to the incentive of airdrops (which Binance does not need to provide the cost for), a large number of users are eagerly providing liquidity for Alpha projects. This has given project parties an extremely cost-effective option for secondary market exit, with a shorter feedback cycle and longer sustainability. They no longer need to worry about creating excellent fundamental data or paying a high price for it. Instead, they will focus more on how to acquire real users and generate real revenue. This will help them more easily pass the Binance Alpha review and focus more on generating a continuous and healthy positive cash flow through their products and business. Airdrops,as an important tool for them to achieve this goal,will have a completely different design approach from the previous data-driven model, which was mainly dominated by studios(of course,there are also complex games of anti-sybil and anti-farming between studios and project parties).
4/In the days to come, will airdrops return to their original form? I believe that the need to manipulate data still exists, but it is gradually being replaced by real user acquisition and user scenarios. When we talk about the value of airdrops, we will assess them from multiple aspects such as the project's fundamentals,business model, financial status,and marketing model. This process will be more similar to the financial investment thinking of the primary market,rather than simply relying on project endorsements and investments as in the past.
5/To conclude with some casual rambling: After a night of wild frenzy, comes the rationality of seeing through life. No matter how passionately crazy the market is,there will always come a day when it returns to rationality or gets slapped back to reality by the market. Then people start working with an indescribable sense of melancholy, and no longer call high-intensity fomo activities as "building".
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