Glossary of Terms Crypto Airdrops

In the last issue, we explored what an airdrop is, how to qualify for them and some tips and tricks for beginners.

We will now dig deeper into what the different terminology means.

Snapshot

A specific point in time when the blockchain records the contents of wallet balances/liquidity provided in the protocol. These records include all existing addresses and their associated data (transactions, balance, metadata, etc).

Snapshot is usually taken at a specific “block” on the blockchain, but usually communicated via the date and time.

Eligibility Criteria

The conditions that must be met for a wallet address to qualify for an airdrop.

Token Allocation, Claim and Distribution:

The number of tokens that each eligible wallet address will receive in the airdrop. Distribution is the process of delivering the airdropped tokens to eligible wallet addresses, while claiming an airdrop is the action of requesting and receiving the airdropped tokens into a wallet address.

Vesting and Cliff

Refers to a mechanism used to control the distribution of tokens to recipients over a specified period of time. Vesting schedules are commonly employed in airdrops to incentivize long-term engagement, discourage immediate selling of tokens, and align the interests of recipients with the goals of the project.

The tokens are released gradually according to a predetermined schedule or set of conditions. This schedule could be based on time elapsed, milestones achieved, or other criteria defined by the project conducting the airdrop.

Cliff refers to a specific point in time within a vesting schedule where a certain portion of tokens or assets become available to the recipient. The cliff represents a waiting period before any tokens are vested or released to the recipient.

When tokens are subject to a cliff in an airdrop, recipients do not receive any tokens until the cliff period has elapsed. After the cliff period expires, a portion of the total allocated tokens becomes available for the recipient to access or use. The cliff is essentially a delay mechanism that ensures recipients are committed to the project for a certain period before gaining access to the tokens.

Epoch and Seasons

Epoch refers to a specific period of time that determines the schedule of certain events on the blockchain network, while seasons refers to a specific period or time frame during which a series of airdrops are conducted by a project or platform. These airdrop “Seasons” are often organized as part of a promotional campaign to distribute tokens to participants who meet certain criteria or complete specific tasks.

Airdrop seasons may have set start and end dates, and participants are typically informed about the rules, eligibility criteria, and distribution schedule in advance. By organizing airdrops in seasons, projects can generate excitement, encourage engagement, and effectively manage the distribution of tokens to the community.

TVL

Stands for Total Value Locked. TVL is a metric used to measure the total value of assets that are locked (deposited) in a specific protocol or platform within the DeFi ecosystem.

When it comes to airdrops, TVL can play a significant role in determining how tokens are distributed. Projects may choose to allocate a proportion of their airdrop tokens based on the amount of value locked by users in specific DeFi protocols or platforms. This approach is often used to incentivize users to participate in the DeFi ecosystem and promote the use of certain decentralized applications.

Backers

typically refer to individuals, companies, or organizations that provide support, funding, or resources to a project or platform conducting an airdrop. These backers may play a crucial role in the success of an airdrop by contributing to the overall promotion, development, or ecosystem growth of the project.

Sybils

refer to a type of attack or manipulation where a single entity creates multiple wallets or fake identities to gain an unfair advantage in an airdrop distribution.

Sybil attacks can be problematic in airdrops because they can distort the distribution of tokens or rewards, unfairly benefiting the attacker at the expense of legitimate participants. Projects conducting airdrops often implement measures to prevent or mitigate Sybil attacks, such as requiring KYC (Know Your Customer) verification, limiting the number of tokens per individual, or using other verification methods to ensure that participants are genuine.

By detecting and preventing Sybil attacks, projects can maintain the integrity of their airdrop campaigns, ensure fair distribution of tokens, and protect the interests of legitimate participants.

Testnet

refers to an alternative blockchain that is used for testing purposes by developers and projects before deploying their final product on the mainnet (the live blockchain network). Testnets are essentially sandbox environments where developers can experiment, debug, and refine their applications without risking real assets or affecting the main blockchain.

When it comes to airdrops, testnets can be utilized to simulate the airdrop process before conducting it on the main blockchain. This allows projects to test the airdrop mechanism, distribution algorithm, and overall functionality in a controlled environment. By running airdrop simulations on a testnet, developers can identify and address any potential issues or bugs before rolling out the airdrop to a wider audience on the main blockchain.

TGE

stands for Token Generation Event. A Token Generation Event is a term used to describe the process by which new tokens are created and distributed to participants. This term is often used interchangeably with Initial Coin Offering (ICO) or Token Sale.

A Token Generation Event in the context of airdrops represents the creation and distribution of new tokens to participants, often as part of a project’s fundraising and marketing strategy.

I hope this has provided you with a deeper understanding into the different terminologies and mechanism used in typical airdrops.

Most beginners might find this to be overwhelming. Fear not, OneClick Labs is here to help, they have broken down most airdrop opportunities into categories and actionable tasks to help you get started and be qualified for airdrops: https://defi.oneclick.fi/airdrops/explore?page=1

Disclaimer: This article, including insights on airdrop farming and other DeFi strategies, is for informational purposes only and should not be considered as financial advice, investment recommendations, or an endorsement of any particular investment or strategy. The cryptocurrency and DeFi markets are highly volatile and unpredictable. Past performance is not indicative of future results. One Click makes no representations or warranties regarding the accuracy, completeness, or timeliness of the information provided. Readers should conduct their own research and consult with independent financial advisors before making any investment decisions. By using this information, you agree that One Click is not liable for any losses or damages arising from your investment choices.

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