Universal Basic Token - The Daily Gwei #147

Give them an inch and they'll take a mile.

DeFi users got an early Christmas present yesterday as 1inch finally launched their native governance token. The 1INCH token was airdropped to anyone who completed one trade via the 1inch protocol before September 15th or at least 4 trades in total or trades for a total of at least $20. It’s safe to say that with 1INCH trading at a $4 billion fully diluted market cap at time of writing, this airdrop ended up being worth quite a lot!

Obviously 1inch isn’t the first to do a “Universal Basic Token” airdrop to its users with both Curve and Uniswap being recent standouts in this arena and it’s definitely a trend that I think we’ll see continue strongly into 2021. Though, I really would like to see more innovation around these token distributions rather than just a straight airdrop to users followed by a liquidity mining program. We have so much design space left to explore when it comes to tokens that I feel teams are taking the safe path here because it’s worked so well so far. In saying that, what I think people are going to realise very quickly is that there are diminishing returns to these sorts of things and something that works today can fail to work in just a few short weeks (see DeFi food ponzi mania for a clear example of this).

If we look at the breakdown of the number of wallets that have claimed 1INCH tokens, we can see that the number is currently over 16,000 and growing. For comparison, the number of wallets that have claimed UNI tokens currently sits at over 200,000 after more than 3 months. Even though it’s only been around 12 hours since the 1INCH token launched, I don’t believe that there are anywhere near as many wallets that interacted with 1inch compared to Uniswap so I don’t expect the same amount of airdrop recipients here. Though what I thought was smart was that 1inch took the snapshot on September 15th (for those addresses that only completed one 1inch trade), which was one day after the UNI token went live, in order to prevent gaming of the airdrop.

So, where do we go from here? Well, there’s a bunch of projects that are still yet to launch a token such as InstaDApp, dYdX, Set Protocol & Opyn and people are speculating on whether they will actually launch a token and how it’ll be distributed. Because of this, I suspect some savvy users are setting up “airdrop farming bots” to generate Ethereum addresses and interact with each of those protocols to maximise the amount of tokens they’ll be able to get. Though, I don’t think this is going to work because the teams are very aware of the ways people are going to try and game their potential token distributions so they will definitely work around that.

Anyway, 2021 seems poised to be another big year for DeFi and I’m sure there will be plenty of fresh token launches for all of us to speculate on and receive airdrops from. For now though, I hope you all enjoy your Christmas and holiday break! I’ll still be publishing The Daily Gwei newsletter and doing my daily Ethereum recaps as per normal throughout the holiday period so you’ll have plenty of fresh Ethereum content to keep you entertained!

Have a great day everyone,
Anthony Sassano

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All information presented above is for educational purposes only and should not be taken as investment advice.