Cryptocurrency Exchange Binance has released a new report detailing some inefficiencies regarding airdrops and lessons that could move forward.
According to the exchange, the affected airdrops fall into two categories. The first type is retroactive, and projects usually surprise existing users with rewards.
The second group is Engagement Airdrops. This is a pre-announced event designed to attract new users and fit emerging projects. Depending on the stage of the project, both airdrops focus on a variety of goals.
Exchange regarding lessons from existing inefficiencies Where does our airdrop go? We highlighted several challenges that affect this type of token distribution, including planning inefficiency, concerns about insider allocation, and technical issues.
Reducing quotas
The first issue cited in the March 2025 Binance Research Report was last-minute allocation reductions, of which Redstone Airdrop is an ideal example. Before the official distribution, the team reduced the first community portion from 9.5% to 5%.
The result was a massive backlash from community members, with concerns about unfair treatment of users. The report warned that such sudden changes would show poor plans to undermine community trust.
As a lesson, Binance recommended locking token allocation prior to token generation events (TGEs), avoiding unilateral decisions and involving key stakeholders, such as investors and community members, to promote transparency in communication.
Opaque Eligibility
Another identified mistake is an opaque eligibility criteria, which can lead to claims of favor and unmet expectations. Because of this pitfall, Binance pointed out Scroll’s October 2024 air stoppage of 70 million SCR tokens (7% of its supply).
Airdrop was intended to reward mainnet activities such as transaction volumes and DAPP engagement, but on October 19, 2024, the snapshot baffled users due to private rules and inconsistent reward distribution.
To address this, the report suggested that the project would draw on tools such as on-chain surveillance and proof of humanity to outline participation rules that allow individuals to utilize tools such as creating multiple fake accounts and misuse token distributions.
Distribution of many insiders and influencers
Another prolonged pain with airdrops is a distribution that is more common with insiders and influencers. Projects prioritize teams, investors and VCs over community.
The latest project facing such a backlash was Kite’s February 2025 Airdrop. Interestingly, the platform allocated 43.3% to teams and investors, and with large influencer payments, only 10% was allocated to the community. In this case, the influencer reportedly dumped the token and scrutinized the Kite’s insider’s focus.
While acknowledging the need to fund development, Binance noted that excessive allocation to insiders could destabilize token prices and alienate supporters. The report called for a vesting period and lock-up to curb immediate sales, and required all stakeholders to be tailored to the project’s long-term vision.
Technical barriers
Finally, technical barriers to the billing process, such as those experienced at Magic Eden’s December 2024 Airdrop, undermine user onboarding. Airdrop was intended to promote Magic Eden mobile wallets, but was plagued by glitches and unclear instructions, leading to widespread dissatisfaction among community members.
To address this issue, Binance highlighted the importance of a smooth and intuitive claims process, warning that technical issues can reduce payments and prevent users from further engagement with the project.
Future, the report recommends increased transparency, improves monitoring to further engage the community and improve future airdrop strategies.
