Sign Protocol: The Trojan Horse of Token Airdrops

Airdrop has now evolved into a hot event that users around the world can participate in, attracting the attention of millions of potential participants.

Author: 0x_Knight

TL;DR

Cryptocurrency airdrops have evolved from simple free token distributions to complex marketing strategies, but they still face numerous challenges in areas such as resistance to Sybil attacks and scalability.

Sign Protocol is the “notary office” of the digital world, enabling users to create verifiable cross-chain digital certificates and on-chain labels, accurately identifying true community members.

As a member of the Sign Protocol ecosystem, TokenTable provides customized token management and distribution across multiple chains, implementing various token distribution access mechanisms (KYC, NFT, token/certificate proof) and flexible representative release mechanisms.

Sign Protocol and TokenTable are committed to achieving more efficient token Airdrops, maximizing the number of real token holders at the launch of the token, and fostering long-term loyalty and adoption within the community.

In the future, more airdrops will emerge to guide community building, and these airdrops will convert millions of people outside the circle into token holders. Sign Protocol and TokenTable are the key catalysts driving this transformation.

In addition to airdrops, the Sign Protocol has broader applications in digital identity, reputation systems, and decentralized communities, and is likely to become a bridge between the Web3 and Web2 ecosystems.

Airdrop Development Trajectory

1. Background

Since the birth of cryptocurrency, airdrops have come a long way. Initially, airdrops were simply free token distributions aimed at creating awareness and widely dispersing tokens. As cryptocurrency gained mainstream attention, airdrops became the preferred marketing strategy for new projects to quickly build user communities. Particularly since the successful Uniswap airdrop, the popularity of airdrops has exploded. Token airdrops from several projects such as dYdX, ENS, Jito, and Arbitrum have greatly rewarded early participants and generated significant wealth effects, thus attracting widespread attention and discussion within the crypto community.

In the past few years, the user base for Airdrop has greatly expanded, far exceeding the boundaries of the crypto community. Once a niche social practice for blockchain believers, Airdrop has now evolved into a hot event that global users can participate in, attracting the attention of millions of potential participants. Airdrops for projects like $GRASS and $DOGS allow users to earn rewards by leasing idle bandwidth or attention, successfully generating interest and participation from millions of users. As of now, Airdrop is driving the mass adoption of cryptocurrencies through widespread token distribution, becoming an important bridge between the crypto ecosystem and mainstream audiences.

2. Current Situation and Future Challenges

With the increasing popularity of airdrops, the behavior of Airdrop Farming has also emerged. Some project teams have already begun to implement more complex airdrop strategies, including retroactive airdrops, participation-based airdrops, and multi-stage airdrops, to combat opportunistic behavior and filter out airdrop witches.

However, the current airdrop strategy seems to be insufficient. There are still several unresolved challenges in the airdrop mechanism that hinder the development and popularization of airdrops:

3. Witch Attack

“Airdrop mining” exploits vulnerabilities in the system for speculative airdrop expectations. Airdrop witches dilute the airdrop share of the real community, and worse, they create significant sell-off pressure during the Token Generation Event (TGE).

3. Scalability Issues

Some project airdrops have attracted hundreds of thousands or even millions of participants. However, due to the lack of a one-stop airdrop management tool, project parties find it difficult to conduct efficient and low-cost token distribution.

4. Community Quality Issues

Many airdrop participants are short-term speculators rather than true community members. They prioritize quick profits over genuine community engagement.

5. Regulatory Issues

As airdrops gain more attention, they face more regulatory compliance issues. Projects may need to implement effective Know Your Customer (KYC) processes to mitigate potential regulatory risks.

6. Focus on Witch Attacks

Among the many challenges mentioned above, witch attacks have become the biggest hidden danger in the airdrop field. During a witch attack, malicious actors create a large number of fake accounts or bots to seize a higher proportion of airdrop tokens. These attackers not only manipulate the token distribution system but also greatly dilute the airdrop value for real users, undermining the fairness and broad purpose of token airdrops.

The prevalence of witch attacks has reached a concerning level and has already resulted in significant losses.

Recently, two well-known Airdrop cases illustrate this very well:

Celestia Airdrop

Celestia’s $TIA Airdrop became a victim of a large-scale witch attack. Malicious actors stole over 55% of the airdrop tokens. These attackers used at least 106,491 spoof wallets to transfer an astonishing 28.92 million $TIA tokens. At the peak price of $TIA, these airdrop tokens were worth over 500 million dollars.

Arbitrum Airdrop

The Arbitrum airdrop faces a similar fate. Approximately 150,000 witch addresses and groups harvested over 253 million $ARB tokens - accounting for 21.8% of the total airdrop amount.

These cases highlight the urgency of improving the airdrop mechanism. As the cryptocurrency ecosystem develops, preventing such attacks is not only a technical challenge but also a key factor in maintaining trust, fairness, and long-term development between cryptocurrencies and the community.

Vitalik’s Insight: How to Plan Better Airdrops

In a recent Twitter post, Vitalik Buterin outlined the challenges of designing more effective Airdrops. As Vitalik observed, an ideal Airdrop should reward genuine community members, recognize substantial community contributions, maintain a certain level of fairness, and resist witch exploitation. These Airdrop goals align perfectly with the vision of “blockchain-based identity, credential, and attestation frameworks.”

“Blockchain-based identity, credential, and attestation frameworks” represent a new approach to managing digital identities and verifying claims in the digital world. Among them, attestation frameworks play a crucial role in digital verification systems. Attestation frameworks allow third parties to certify specific claims about an identity, thereby establishing a vast trust network. For example, universities can certify a student’s degree, employers can attest to a worker’s skills, or governments can verify a citizen’s residency status. The immutability and transparency of blockchain ensure that blockchain-based attestations are tamper-proof and easy to verify.

Moreover, the certification framework provides users with fine-grained control over their information, allowing them to selectively disclose verified information without revealing unnecessary personal data. This feature is particularly valuable in scenarios such as token airdrops, where project parties can use certification to verify user eligibility for airdrops without infringing on user privacy. The certification framework works in conjunction with identity and credential systems to build trust and reputation in a decentralized and secure manner. This combination brings enhanced privacy protection, improved security, and streamlined verification processes to the digital realm.

Sign Protocol and TokenTable make their debut

So the question arises: how can we utilize the blockchain certification framework to design better Airdrops? Let’s take a look at Sign Protocol, a certification protocol that implements standardized interoperable credentials and on-chain labels.

1.Sign Protocol

Sign Protocol is a comprehensive chain authentication system designed to create and verify digital statements across multiple blockchain networks. At its core, Sign Protocol achieves the verifiability and accessibility of blockchain authentication.

To understand the Sign Protocol, you can think of it as a digital notary in the era of the internet. Just like notaries in the real world verify and stamp important documents, the Sign Protocol does something similar in the digital world, but is applicable for notarizing various digital statements and information. Essentially, the Sign Protocol uses cryptography (which can be seen as unbreakable digital code) to create super-secure digital signatures: these are not just images of signatures - they are mathematical proofs that are almost impossible to forge.

Through these digital signatures, the Sign Protocol can turn claims into facts. Suppose you want to prove that you are a five-year loyal customer of a coffee shop. Instead of just a verbal statement, the Sign Protocol allows the coffee shop to “prove” your loyalty in a digital format. Now, you have a verifiable “Coffee Expert” digital badge!

One of the coolest features of the Sign Protocol is that it is designed to work across different blockchains and even off-chain. It’s like having a universal passport that can prove digital identity and achievements. This versatility unlocks a variety of application scenarios. For instance, users can earn an ENS badge on Ethereum as proof of being an early adopter of ENS domains. At the same time, they can obtain an onchain summer badge on Base as proof of active participation. Additionally, participants attending the TON Society offline gatherings can also receive a soulbound token (SBT) as a digital record of their actual interactions with the community. These diverse badges and SBTs can serve as ideal digital proofs for generating various on-chain labels, thereby building a comprehensive digital identity and user profile.

2.TokenTable

Based on digital proof, Sign Protocol has developed a complete ecosystem of applications. A representative of this is TokenTable, which is one of the most popular tools in the Sign Protocol suite.

In short, TokenTable is like a Swiss Army knife for token management, providing a range of tools to efficiently and transparently manage and distribute tokens. With a customizable claiming interface, TokenTable can achieve precise, transparent, and automated token distribution across multiple chains. The platform also empowers project teams with the ability to precisely customize Airdrops by integrating specific parameters such as lock-up periods and vesting schedules.

It is worth noting that, under the support of the Sign Protocol, TokenTable allows for various access mechanisms, including:

KYC Access: Ensure that only users who have passed KYC verification can receive tokens, just like showing an ID in an exclusive club.

NFT Access: Allows specific NFT holders to claim tokens, similar to a VIP pass for token access.

Token/Proof of Access: Control access based on holding certain tokens or possessing specific credentials.

To date, TokenTable has supported more than 15 blockchains, ranging from EVM-compatible blockchains to Solana and TON networks. TokenTable has distributed more than $807 million worth of tokens to more than 33.5 million addresses. This user base is 50 times and 25 times the total number of $ARB and $STRK airdrop addresses, respectively. In a recent milestone token airdrop, TokenTable facilitated the distribution of $DOGS tokens to over 42 million eligible Telegram users, setting a record for the largest airdrop in cryptocurrency history.

Airdrop Reimagined: Sign Protocol + TokenTable Practice

The strong collaboration between Sign Protocol and TokenTable is expected to revolutionize traditional airdrop methods. This innovative combination builds a comprehensive solution that directly addresses the core pain points faced by token airdrops for a long time.

The Sign Protocol acts like a digital notary office for verifying user identities and achievements. It mitigates witch attacks by creating tamper-proof on-chain labels - such as certified digital badges used for KYC verification, proof of community participation, and verification of specific skills or contributions - to identify real community members and, if necessary, implement KYC for identity verification and regulatory compliance. At the same time, the TokenTable uses proofs to determine who can receive what in the airdrop. It functions like a vending machine that only distributes tokens to those who possess the correct “digital key.”

By combining the powerful verification capabilities of the Sign Protocol with the flexible distribution features of TokenTable, project parties can create airdrops that are safer, more efficient, and more attractive and equitable. This synergy encourages genuine community building and rewards true supporters, creating a more valuable and sustainable token ecosystem.

Imagine a scenario like this: a decentralized finance (DeFi) platform on the TON network wants to use an Airdrop to reward early adopters and guide community building. By utilizing the Sign Protocol and TokenTable, they can:

Verify user interactions with their smart contracts, community projects, and offline meetups in the past.

Use KYC/NFT/token admission mechanisms to filter witches and verify user authenticity or loyalty.

Allocate and distribute tokens on Telegram based on engagement or the age of the Telegram account, and set up a custom vesting plan.

The combination of Sign Protocol and TokenTable opens up a wealth of innovative strategies for effective Airdrop. The fine control over Airdrop eligibility criteria sets a new standard for projects on how to align token distribution with long-term ecosystem growth. Crucially, it maximizes the number of real token holders at the time of the token launch, transforming individuals from diverse backgrounds into active stakeholders in the community.

This large-scale Airdrop distribution method may become a powerful catalyst for the mass adoption of cryptocurrency. By maximizing token distribution to community users, project teams can quickly establish a diverse and highly engaged community, where each user has a vested interest in the project’s success. As more and more project teams adopt this forward-looking Airdrop strategy in the future, we anticipate the emergence of a new narrative characterized by mass participation, value-driven engagement, and community-centered development in the token economy.

Beyond Airdrop: New Application Scenarios

The applications of Sign Protocol and TokenTable are not limited to Airdrops. Looking towards a broader digital future, these two innovations are expected to unlock more vivid real-world use cases.

This “Web3 Magic” combination is expected to break down the walled gardens of the traditional Web2 market, paving the way for the free flow and universal reputation across digital ecosystems. By acquiring on-chain and off-chain information, the Sign Protocol aims to put as much data on-chain as possible, thereby democratizing access to user reputation and identity. Crypto projects can easily use this data to explore a variety of new use cases, such as:

Real World Asset (RWA) verification: Bridging the physical and digital worlds through verifiable labels.

Decentralized reputation system: personal crypto resume, including real-world and on-chain experiences and backgrounds.

Governance 2.0: Weighted governance voting rights based on verifiable on-chain credentials

Cross-chain interoperability: A universal crypto identity applicable everywhere you go.

Conversely, Web2 projects can also utilize the Sign Protocol to find specific tagged audiences and incentivize their offline participation, thereby building an organic online community. This allows traditional platforms to leverage blockchain-based tools to enhance user acquisition and retention strategies.

TokenTable is not just an Airdrop tool. It also achieves a balance of complex control and flexibility in token distribution, especially adept at handling large-scale distributions at the million-user level. Whether it’s strategic locking or programmatic release, TokenTable provides a one-stop solution for project parties, enabling them to automatically distribute crypto assets to eligible users in a user-friendly and cost-effective manner. Imagine a scenario where completing 10 coffee purchases (verified on-chain) automatically triggers a smart contract to distribute loyalty badge tokens to the user’s account. This is the innovative potential of Web3 magic, used to create frictionless, trustless reward systems that enhance user engagement and loyalty.

In short, the innovations embodied by the Sign Protocol and TokenTable may drive a paradigm shift far beyond cryptocurrency airdrops themselves. As these technologies mature and see broader applications beyond cryptocurrency, we may witness a paradigm shift in how digital reputation is established and maintained, and how it impacts on-chain and real-world activities.

Summary and Outlook

The evolution of airdrops is an important milestone in the maturation of the crypto ecosystem. However, as airdrops become increasingly popular and involve a broader audience, traditional airdrop models face severe challenges. Many issues, such as witch attacks and scalability problems, remain unresolved.

As Vitalik pointed out, the answers to these challenges may lie in authentication frameworks. As an emerging solution based on authentication frameworks, Sign Protocol and its ecosystem project TokenTable represent a powerful “web3 magic” combination that will redefine the existing Airdrop concept. Project parties can leverage the strong authentication capabilities of Sign Protocol and the flexible distribution mechanism of TokenTable to create secure, efficient, and truly community value-aligned Airdrop strategies from scratch.

Cryptocurrencies are expected to surpass traditional stocks in promoting community engagement. Token-based models enable more direct and seamless community participation, making them particularly effective in building and maintaining active user bases. As one of the simplest and most effective ways to distribute tokens, airdrops remain the preferred setup for most projects to establish large-scale, high-engagement communities at TGE. It is foreseeable that more airdrops will emerge in the future, aiming to convert millions of ordinary people into new token holders. In this new paradigm, Sign Protocol and TokenTable act as the Trojan horses of this round of transformation, aiming to accelerate the establishment of broader, fairer, and more attractive decentralized digital communities.

Looking to the future, the impact of emerging technologies like Sign Protocol and TokenTable far exceeds that of Airdrop activities themselves. They have the potential to break down the walled gardens of the Web2 world, creating a new universal digital identity and reputation paradigm across various ecosystems. From verifying real-world assets, implementing Governance 2.0 models, to creating cross-chain identity interoperability, these use cases are laying a solid foundation for a more interconnected and trusted Web3 vision.