Making Airdrops More Efficient with Proof of Humanity

August 9, 2024

Community

Airdrops have become increasingly problematic due to the rise of bots and airdrop farmers who exploit them. Instead of projects targeting genuine early adopters and contributors, most airdrops often end up in the hands of exploiters who create multiple fake wallets to maximize their allocation.

This not only dilutes the effectiveness of airdrop campaigns but also undermines the trust and engagement of real users in the community. As a result, the initial goal of creating loyal and active communities is compromised, and the market performance of these tokens frequently suffers a dip.

To address these issues, Privado ID lets projects integrate Proof of Humanity solutions that ensure rewards are not given to bots or sybil accounts. Users can now verify they are real humans in a private-preserving way ✅

Problems with Airdrops? Bots and Fake Users

One of the most painful problems with airdrops is they are flooded by bots and fake users. Many wallets participating in airdrops are newly created or clearly set up to exploit the system. In the past, there has been evidence of people farming airdrops with over 1,000 wallets –all owned by the same person. This issue of fake wallets and bot participation is becoming more serious, making it difficult to identify real users from Sybil attacks.

People are also increasingly frustrated and skeptical about airdrops. The uncertainty of whether they will actually receive the airdrop –or if bots will take over– has led to a decline in trust and enthusiasm. Airdrops often end up benefiting opportunists rather than real users, as there are gaps in identifying the true end party. Sybil attacks, where one person creates multiple accounts, have made airdrops become revenue farms rather than a real way to connect with their new community.

While bots can be beneficial in farming likes, generating initial buzz and early ecosystem growth, the ultimate goal is to find and reward real people. Serious projects aim for identifying unique users that can genuinely contribute to the community in the long-term. Genuine engagement is achieved by incentivizing users to prove their authenticity and help the project.

Although it is challenging to completely eliminate bots, there are ways to disincentivize them. Making it more difficult and less rewarding for bots to participate can help give better rewards to real users and create a stronger community. For a more in-depth discussion on these challenges, listen to this Twitter Space where we explore how projects can better ensure their airdrops reach real users.

Proof of Humanity: Verify Rewards Go To Real Users

The market is demanding more solutions to eliminate bots and sybil accounts. We're seeing a natural evolution of the original intent behind the idea of airdrops. Instead of just incentivizing airdrop farming, new proof of humanity solutions are arising focused on identifying real users into the ecosystems.

This paradigm shift is important for making things fair for airdrops and rewards distribution. By using proof of humanity, projects can make sure their rewards go to real people who are really contributing to the community. Users no longer have to compete with 1000s of accounts or bots owned by malicious actors. This makes the whole ecosystem more trustworthy and encourages more people to join in.

Proof of Uniqueness by Privado ID

One way to prove you are a real user is with our proof of uniqueness solution developed by Synaps, Privado ID, and Verax on Linea blockchain.

Our Proof of Uniqueness solution uses advanced computer vision algorithms to perform a 3D face scan, ensuring that the individual is a live person and not a video or deepfakes. By integrating zero-knowledge proofs and verifiable credentials, the system can verify a user's uniqueness without storing any biometric data, thereby preserving privacy.

Once users complete the initial verification, they receive a Level 1 uniqueness credential, which can later be upgraded to a more Level 2 credential through a second verification process. This phased approach adds an extra layer of security, ensuring that only genuine users can prove their uniqueness and it’s not exploited by malicious actors.

What’s Next for Airdrops?

With airdrops being exploited by farmers, it's important to tell apart real people from fake accounts or bots. We've started asking users to prove they are real, but that's just the first step. We should also create more complex systems to identify how relevant and valuable each user is to the project. These finer-grained reputation systems will make sure that rewards go to people who really contribute and are active in the community.

This section will talk about different ways to build strong reputation systems, using different identity verifications, and giving ongoing and non-financial rewards to keep the community healthy and growing.

Reputation Systems

Reputation systems measure if users are valuable and relevant to the communities they want to join. Although this can vary between projects –a highly active user on social platforms might be very different from a whale DeFi user– by collecting identity credentials and building a real reputation, projects can ensure they are rewarding the right type of users.

If a wallet address isn't verified to prove it's a real person, it might still get some rewards, but not as much as users who have put in the effort to prove they are real. Bots will join in anyway, but the key is how to reward those who are willing to prove their authenticity.

Composable Identity Systems

Integrating composable identity systems that combine various verification parameters can create multi-layered authentication processes around reputation, making it even harder for bots to bypass. For example:

Proving a wallet belongs to a human might earn one level of reward.
Adding more identity proofs and reputation levels (like holding on-chain assets or proving age) can lead to even more rewards

That’s what Privado ID’s Proof of Uniqueness does. To prove you are a human, you need to pass a two-level credentialing system that ensures only unique humans can attain Level 2, effectively distinguishing themselves from bots and preventing Sybil attacks.

Ongoing Rewards

We've also seen a paradigm shift from one-time drops to ongoing rewards, which helps projects grow in a sustainable way. Moving away from a single event to something that rewards continuous engagement better reflects the relationship between a community member and the project. This trend has evolved from single drops to phased approaches, identifying those who stay for the long run and setting more complex criteria to help projects grow sustainably.

Ongoing rewards not only keep users motivated but also help in building a stronger community. By rewarding users for their continued participation, projects can identify loyal members who are genuinely interested in the project. This creates a more vibrant and supportive community where users feel valued and are more likely to contribute positively.

Non-financial Incentives

On the other hand, airdrops are not the only incentive mechanism. Offering early rewards, swag, priority queues for events, and other non-financial incentives can matter more to genuinely invested community members, adding a subjective value that makes these incentives richer.

Recognizing and celebrating achievements within the community can drive engagement. Public acknowledgment, badges, or leaderboards that highlight top contributors motivate members to stay active and continue participating. By offering a variety of non-financial incentives, every member will find value in the community and feel inspired to support the project in the long-term.

Do you want to stay tuned with Privado ID?

Together, we can build an equitable future for all through the mass adoption of Privado ID.

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