Cryptocurrency Exchange Binance Report on Airdrop Inefficiencies

Cryptocurrency exchange Binance has released a new report detailing several inefficiencies around airdrops and possible lessons to apply moving forward.

According to the exchange, the affected airdrops fall into two categories:

1. Retroactive Airdrops: Projects surprise existing users with rewards.
2. Engagement Airdrops: Pre-announced events designed to attract new users and fit emerging projects.

Both types of airdrops focus on different goals depending on the project stage.

Lessons from Existing Inefficiencies

The exchange’s Where Are Our Airdrops Going? highlighted challenges affecting this type of token distribution, such as planning inefficiencies, insider allocation concerns, and technical issues.

Reduced Allocations

The first problem cited in the Binance Research March 2025 report was last-minute allocation reduction, with the Redstone airdrop being an ideal example. Before the official distribution, the team lowered the initial community portion from 9.5% to 5%. This caused a massive backlash from community members, raising concerns about unfair treatment. Binance recommended locking in token allocations before the Token Generation Event (TGE) and promoting transparency in communication.

Opaque Eligibility

Another identified mistake is opaque eligibility criteria, which can lead to favoritism allegations. The report cited Scroll’s October 2024 airdrop, where unavailable rules left users confused. Binance suggested that projects use tools like on-chain monitoring to deter Sybil farming.

Insider & Influencer-Heavy Distributions

Insider and influencer distributions prioritize teams and investors over the community. For instance, KAITO’s February 2025 airdrop allocated 43.3% to insiders, leading to scrutiny. Binance noted that excessive insider allocations can destabilize token prices and recommended vesting periods to align interests.

Technical Barriers

Lastly, technical barriers in claim processes undermine onboarding. The Magic Eden December 2024 airdrop suffered from glitches and unclear instructions. Binance emphasized the need for a smooth claim process to encourage user engagement.

Conclusion

Looking ahead, the report recommended increasing transparency, involving the community more, and improving monitoring to refine airdrop strategies in the future.