Author: Nancy, LianGuaiNews
“Bull market for trading coins, bear market for profiting” is a popular saying in the industry. Airdrop hunting is considered a low-cost way to get rich, especially with the stimulation of airdrops like dYdx, Arbitrum, and Aptos, the army of airdrop hunters has emerged, evolving into “airdrop hunters” with professional equipment and resources.
However, it is not easy to get a big profit among the massive projects. Recent disappointing airdrops like CyberConnect and Sei have resulted in some airdrop hunters not only making no profits but also suffering losses. As a result, some studios have started laying off staff or even closing down and transforming. The voices of pessimism about the airdrop hunting industry are growing louder. Will the airdrop hunting industry really face a widespread shutdown? What is the actual operation of these studios? LianGuaiNews interviewed several airdrop hunting studios, among which some declined the interview and admitted that they are indeed at risk of bankruptcy because they have not yet achieved big profits, some have made early predictions of risks and transformed in advance, and some focus on mainnet projects with relatively low witch risk. They are still optimistic about the development of the airdrop hunting industry.
Super high profits come from early participation and usually directly cashing out
Compared with those newcomers who entered the market because of the airdrop wealth effect, Dong Shifu (pseudonym) and the Web3 Blue Sky Studio interviewed in this article are early participants with many years of airdrop hunting experience.
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Dong Shifu joined the airdrop hunting army because of Dfinity ($ICP) in 2018 and established his studio in early 2020. Dong Shifu revealed to LianGuaiNews that his studio currently has a team of 30 to 40 people, and in addition to Chengdu and Vietnam, a Singapore team is also under construction. In their business, activities such as airdrop arbitrage are collectively referred to as execution-related businesses, such as interactive airdrops, testnet nodes, and participating in new projects. These three major categories are further divided into many smaller categories.
According to Dong Shifu, his studio is a high-frequency participant on the early token crowdfunding platform CoinList and one of the earliest participants, hardly missing any projects. “At its peak, we had over 10,000 accounts in the queue.” In the projects they participated in, Dong Shifu revealed that the probability of airdrops was relatively high from 2020 to 2022, and they usually sell the airdrops directly for profit. Among them, the project with the highest return on investment is Aptos ($APT). “Since we applied for the testnet and claimed the NFT, this project has no other participation costs for us except for labor and server fees. The average profit per account is around 1500 U.”
Similarly, the Web3 Blue Sky Studio is also an early participant on CoinList. It is a small team of 6 people, mainly focusing on deep interaction with 4,000 zkSync wallets. The studio has been participating in new projects since 2021, with over 10,000 accounts at that time. They also usually sell the airdrops directly for cash. The overall profit is about 10 million RMB. Among them, the platform made the most profit on Arbitrum and Aptos, which were $2 million and $400,000 respectively.
Based on years of airdrop experience, Master Dong said that their main costs come from manpower and servers, and of course, time costs are also high. The reason is that the airdrop cycles of many projects are long, and some projects are not distributed until two or three years after their participation. Web3 Blue Sky Studio also stated that airdropping is a project with no visible short-term returns, and many people find it difficult to persist.
Correct posture for dealing with “witches”
For airdrop enthusiasts, in addition to the uncertainty of airdrop expectations and the basic risks of assets being stolen or scammed under high-frequency on-chain interactions, the difficulty of airdropping also increases with each airdrop.
Currently, more and more project teams and data analysis platforms have launched their own anti-witch standards and identification functions, which also exposes them to the risk of no profits or even being counter-airdropped. For example, in December 2022, DeBank launched the witch address marking function; in March of this year, Arbitrum detected nearly 150,000 wallet addresses from eligible airdrop addresses through anti-witches, accounting for over 20% of the total airdrop. For example, recently, the multi-chain transaction infrastructure zkLink launched the new Loyalty Points System 2.0 as proof of its ecosystem participation and introduced strict anti-cheating measures. In addition to deducting points and issuing warnings to first-time offenders, users who continue to cheat after receiving warnings will be blacklisted and have their qualifications revoked.
Facing increasingly stringent anti-witch rules, the likelihood of earning profits through airdropping will be further reduced. Therefore, Web3 Blue Sky Studio chooses to participate in mainnet airdrop projects and reduce investment costs by judging certain projects. “The more PUA projects, the more various problems like witches. The cost of on-chain airdropping will become higher in the future, and the anti-witch rules will not be limited to on-chain data. Facial recognition will also become a trend.”
“In order for the studio to survive, it not only needs money but also the infrastructure required for airdropping. Third-party services are not reliable, self-built is the only way.” Master Dong’s studio has launched a technical department to develop its own cloud system, independent fingerprints, independent devices, and independent IPs. These things are stored in the cloud and can be accessed online anytime and anywhere.
Studio internal competition towards specialization, even launching airdrop SaaS platform
Recently, under the weak encryption market and insufficient airdrop efforts by multiple projects, the accelerated reshuffling of the airdrop market has put many studios at risk of transformation or closure, which has also caused many people to start being bearish on the airdrop industry. In response, Master Dong said that under FOMO sentiment, it is normal for studios to have difficulty making money and closing due to a lack of patience, funds, and luck.
“In unknown situations, studios do not need to expand blindly, but should isolate wallets and take anti-witch measures. Especially at this stage, it is not recommended for ordinary users to enter. IP, fingerprint browsers, Twitter, GMail, etc. all entail considerable costs.” Web3 Blue Sky Studio pointed out in the interview.
In fact, with the current airdrop industry showing a high degree of internal competition, “wool parties” are becoming more professional and their business is becoming increasingly diverse, even including professional airdrop services and training courses.
Recently, the host of the Benmo community, Super Jun, pointed out in a tweet that “the wool studios of several friends around me are not only not going out of business, but are becoming more professional, and the team is constantly upgrading. On the one hand, they have made a lot of money from projects like ARB and SUI. On the other hand, they are also involved in DeFi and arbitrage, so there is no problem with making money to support the studio.”
Master Dong also revealed to LianGuaiNews that in the second half of 2022, on the one hand, they have stopped participating in large-scale projects unless the probability of airdrop is high. On the other hand, they have begun to transform and have achieved some initial results. According to Master Dong, their main business is no longer just airdrops, but also includes the SaaS system service department for opening a dedicated wool platform to the outside world, the KYC department, and the MCN department under construction.
At the same time, Master Dong also said in an interview that the threshold for airdrops will become higher in the future, not just in terms of money, but also in terms of talent and infrastructure. Therefore, in the bear market, it is better to learn more and do less, and cultivate talents. However, he also pointed out that airdrops, testnet rewards, various ID0s, etc. are all ways for projects to distribute tokens. As long as there are new projects listed, there will be these behaviors, and there will be arbitrage opportunities. The wool party industry will not disappear or come to a halt, only the enthusiasm of the boom and the cries of the newly established studios.
In summary, project parties in the future will only adopt stricter audit mechanisms, which also means that wool studios lacking risk management awareness and financial reserves will have a smaller survival space. However, the wool party is already an important part of the encrypted project ecosystem, and they still need the wool party to set the stage for their development.
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